A Fool and His Money Are Easily Parted

* A Fool and His Money Are Easily Parted, by Bill Staton

Why is it that so many people who easily become wealthy also easily go broke? Entertainer Ed McMahon is a recent example. He made millions as Johnny Carson's sidekick on The Tonight Show. This is part of a recent interview on

Larry King Live:Larry King: What did happen, Ed?

Ed McMahon: It's a combination; it's like a perfect storm. Economy problems. Selling the house right now is a tremendous operation.... We've had this house on the market for two years. We've shown it, I don't know how many, 50 organizations or people. Nobody has made an offer. I mean, it's just a lovely home. I hate to leave it. I want to keep the home. I want this all to work out.King: And the payments, you can't make -- what's the problem?

Ed McMahon: Well, if you spend more money than you make, you know what happens. And it can happen. You know, a couple of divorces thrown in, a few things like that. And, you know, things happen. You want everything to be perfect, but that combination of the economy, I have a little injury, I have a situation. And it all came together.

King: Did you break your neck?

Ed McMahon: I broke my neck. I had a fall. ...

King: Has that stopped you from working?

Ed McMahon: Oh, sure. You know, you can't work with this [brace] around your neck. And I have to wear this.

King: But, Pam, the assumption is that the McMahons are multimillionaires and multimillionaires -- how much behind are you, $644,000, right? That's what's reported? ... If you're a millionaire, shouldn't you be able to pay $644,000?

McMahon: I think over the years, you know, it's just a kind of a combination of maybe Ed working so hard and not kind of looking at proper management, which happens a lot. ... Because you're a celebrity, people think you have a lot more than you have. And you always want to take great care of all of your friends and your family and everybody, and you do. And you don't, and I think, you know, we didn't keep our eye on the ball. We made mistakes.

King: And are they foreclosing?

Pam McMahon: Yes, they are.

...Billionaire sports entrepreneur Mark Cuban's brother, Brian Cuban, had this to say on a recent Cuban Revolution blog. Brian works with the Dallas Mavericks:"First, whether it is a lottery winner, an athlete or a star entertainer, if they are not equipped with the knowledge on how to make and save money they are in trouble."When they didn't earn it through disciplined business practices and they don't have those skills they usually go through it quickly."
Most lottery winners or athletes make a great deal of money in a short period of time. They start spending it on things that only go down in value (cars, jewelry, partying, entourage, etc.) and start to evaporate the money they do have. They can carry this off until they stop earning big money. This is when the trouble starts."It is hard to believe that MC Hammer, Mike Tyson, Evander Holyfield and now Ed McMahon are broke. These are people who earned hundreds of millions over time and it disappeared. Lavish spending and entourages were probably the downfall for the first three for sure.

HERE'S THE KEY TO FINANCIAL SECURITY -- "However, if athletes [or anyone else for that matter] educate themselves, learn money management skills and make smart, safe investments along the way, they are usually in very good shape.

"Most people die coming down from Mt. Everest, not going up. The goal is to get to their Mt. Everest AND to get down safely."*************

Bill Staton, MBA, CFA, America's Money Coach® Chairman, The Staton Institute Inc. & Staton Financial Advisors LLC bill@billstaton.com mary@statoninstitute.comNot sure if you need a Money Manager? Take this quick quiz and find out: http://www.billstaton.com/quiz.htm