Even Celebrities Need to Balance Income With Expenses

by James on August 3, 2010 · 2 comments

Hello All,

We’ve covered this before, but its worth repeating.   One of the core principles of building wealth is to be sure your expenses don’t exceed your income. This rule holds equally true regardless of your place in society.   As an example, I wanted to include this video of Pamela Anderson.

Miss Anderson is well known for her role in the Baywatch TV series as well as some of her other more controversial work in films such as “Barbed Wire” as well as for her issue advocacy for with People for the Ethical Treatment of Animals.

More recently however, California State public records indicate she owes back taxes to the tune of $500,000.   While its difficult to speculate as to what the ultimate cause of her fiscal woes is, celebrity blog reports indicate that she has recently decided to refurbish both a home in Canada as well as a house in Malibu.  In particular, the home in Canada appears to be part of an extensive development with over 9 cabins and a store front.  Thus, what is likely occurring is that Miss Anderson’s expenses have outstripped her ability to pay for them, thus resulting in the back tax bill.

The outcome of this remains to be seen.  Frankly, a tax bill of %500,000 is quite a lot of money and it may be difficult for Anderson to turn her situation around without incurring further debt.  However, what’s instructive about this situation is that is it shows that even if you are a famous celebrity that does not excuse you from the basic fiscal reality that wealth accumulation only occurs when your income exceeds your expenses.

For those of you who want to oggle at Pamela’s jiggly bits, here is a borderline exploitative clip covering the story:

Best,
James

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{ 2 comments… read them below or add one }

1 mark August 3, 2010 at 2:55 pm

Dude, thats the worse post I’ve ever read. If you want to look at Pamela’s boobs, why not just say so?

2 Kristina August 5, 2010 at 8:05 pm

This is a great issue to bring up for discussion. The issue of celebrities not paying their tax bill seems to be a current trend in Hollywood. Wesley Snipes and Chris Tucker have both also recently been hit with huge tax bills.

I am not sure the backlog is bec ause they don’t have the money to pay. In 2006 I owed the government money after filing my taxes. I didn’t pay them because I just assumed that they would deduct it from my refund the next year. If I owed again in 2007 I would pay the bill in full for the last 2 years.

However, the Canadian government didn’t see the situation the same way I did. They garnished my paycheque until the debt was paid in full. I guess they couldn’t wait until the next year.

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