English musician Gary Numan made it big early on.
By age 21, he had two No. 1 albums and two No. 1 singles, he tells online investing service Wealthsimple: "It was massive, absolutely massive. We were selling s--- tons of albums all over the world. My uncle once worked it out that in the first two years I earned £6 million."
Numan didn't hold onto his fortune for long. He put a chunk of his earnings back into touring, but since the tours were so lavish, though they were sold out, they actually lost him money.
The musician also "spent a fortune living the life" on houses, Ferraris and multiple planes, he tells Wealthsimple: "I had three aeroplanes at one point at the same time — that's pretty stupid. I mean, it was great, but it's ridiculous."
Between the extravagant tours and lifestyle, it was only a matter of time before Numan found himself in the red. At his lowest point, he was £650,000 in debt, which is nearly $1 million U.S. To make matters worse, his career was "at a standstill," and he had no money coming in.
That's when he and his wife Gemma buckled down. They did a "huge amount of belt tightening" and reduced their spending to £600 a month, Numan tells Wealthsimple: "No holidays, nothing. You live as minimally as you can and then you do as much as you can to try to make money come in."
Between cutting back and coming up with creative ways to generate more revenue, the couple climbed out of their million-dollar hole and even paid down their entire mortgage.
He's hardly the only celebrity to squander his wealth. Actor Nicolas Cage blew $150 million on a string of expensive, often eccentric purchases, while actor Johnny Depp's extravagant lifestyle costs him as much as $2 million a month.
Ultimately, a massive paycheck doesn't guarantee that your money will last. Budgeting and living beneath your means can help you out tremendously in the long run, as Numan is learning. When it comes to managing his money, "I'm still pretty rubbish," the 59-year-old admits. "But I'm trying to formulate one-year plans. I know what my fixed outgoings are now, so I know that as an absolute minimum I need to be generating X amount of money per month."
While Numan still may be "childlike," as he calls it, when it comes to handling his money, his system is working for now. As he puts it: "I'm able to generate enough money to allow for our slightly scatty way of going about things."
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