Here's a pretty good article by John Horn and Nicole Loomis on how some big TV and movie stars get into financial trouble. It doesn't delve much into another aspect of the problem, which is bad investments…but the core problem is there either way. To be in Show Biz usually means having a highly unpredictable income and you can easily gear your spending to one level and then, suddenly and without warning, drop to a lower tier.
The examples in this article, like Ed McMahon and Lorenzo Lamas, may not be deserving of a lot of sympathy. I mean, maybe they should have seen that it could happen and bought smaller homes and used fewer limos. There are, however, people who don't spend lavishly — who acquire modest homes and cars and such — who find themselves in a similar financial pickle. I can think of a dozen cases just among my contacts where someone was on a series or in a successful movie…and while they made decent money, the sums were nowhere close to the astronomical numbers that everyone presumed.
I'm thinking of one guy who was a regular on a very popular TV show…but he'd made a bad deal going in, and he was earning a lot less money than you might have expected. He felt pressure to be a little lavish in his purchasing, not because he wanted to splurge but because he felt embarrassed to be seen flying Coach or driving an old car. He was getting a ton of fan mail and he felt he had to spend the money (and this was costlier than you'd imagine) to hire someone to answer it all and send out the requested autographed photos. And of course, acquaintances said and did things that made him feel he had to pick up checks, loan money, etc.
He lived on the financial edge, assured by agents that in his future would be some new series or movie role that would yield megabucks such that his means would catch up with him. But then his series was cancelled, no lucrative offers followed…and his spouse began having serious medical problems about the time his Screen Actors Guild insurance ran out.
Again, some may not have a lot of sympathy for the guy. After all, he did get to be a star there for a while, and a lot of people would gladly trade places, bankruptcy and all. Still, it's a side of the industry you don't read a lot about. Not everyone in TV lives in a huge mansion. Some live next door to a lady who waits tables at Chili's…and find out one day that they can't even afford that.