Decoding Michael Jackson’s Financial Legacy: 4 Key Lessons from the King’s Financial Struggles

Decoding Michael Jackson’s Financial Legacy: 4 Key Lessons from the King of Pop’s financial struggles

So… you finished college and landed yourself a job. Finally, you have a little money for yourself. You can buy and do the stuff you want. How does that feel? Relieving? Exciting? Liberating?

But then, are you going to recklessly spend on anything that comes your way? Can you get through the month doing that? And what about saving for the future? What are you going to do on that front?

Look at the King of Pop Michael Jackson. He was one of the most successful artists to have ever lived! He made tonnes and tonnes of money with his record sales and concerts. Sadly, he wasn’t clever with his money. He bought his home — the famous Neverland Ranch. The place was pretty much a fantasy park with trains and rides and a whole lot of other luxuries. He blew his money on cars and jewellery.

Soon he was spending almost $30 million a year. Unfortunately, he wasn’t earning as much. So he started borrowing to take care of his expenses and his debt started piling up. Now with several lawsuits and financial woes, his life became pretty miserable. To pull himself out of debt, at 50 years of age, he decided to tour. But before that, to the utter shock of the whole world, he died. He left behind a debt of over $400 million!

This is what you call a tragedy. MJ didn’t have a plan for his money. He did anything that came to his mind. Had he, like a lot of other celebrities, only planned his spending, he would probably never have got into such a hole. And who knows? The King of Pop might have still been around!

So, the first thing you need to do before you spend a single penny: work out a financial plan. Read on further for 5 terribly important reasons why you need a plan for your salary.

1. To play money like a pro

Handling money requires expertise. It’s an instrument that you need practice to master. Money is also a game. You can play it like a beginner and be stuck at that level. Or you can put in hard work, get good at it and hopefully become a world champion.

This is what a financial plan helps you do.

When you sit down to plan your money, you’ll be forced to think and ask questions about matters that you’d never think of otherwise. “What’s money? What’s my attitude towards money? How did I come to think of money in this way? How much do I know about the financial system?” All these and more, you’ll be compelled to think about.

This activity will help you see what you want to do with your money, how much you have, how much you need to spend on monthly expenses and debts, how much you need to save for the future, how much you give to charity and how much you can afford to blow.

A financial plan will help you monitor your spending and keep you on track with your budget. And, in case you need more, you’ll be able to identify it easily. You’ll have more clarity, less fear and anxiety, and surely better chilling out.

A plan puts you in control. It makes you a pro.

2. To blow your money and not go broke

What’s the point in earning money if you can’t enjoy it? But then, you can’t blow your entire salary in a single day. At the same time, you can’t also not spend and bore yourself to death. You need a balance.

This is where a plan comes in handy. Every month, set apart an amount that you can use to buy the things you want. If you can’t afford it with the money you currently earn, you can always save and invest. A plan will tell you exactly how much you need to save and where you need to cut down so that you can perhaps go on your dream vacation!

This is what MJ didn’t do. He didn’t stick to a plan and ended up being miserable. Great lesson for college graduates there. Slow down. Work out a plan before you plan your big trip.

3. To keep off bloodsuckers

Money is a magnet. It attracts great things. But it also attracts some very bad things. One of them is people who want your money.

It’s important to help people in need. There are a lot of poor people who deserve a helping hand. However, there are also some who’d like to latch on to you to extract from you as much as they can. How do you deal with this?

More importantly, how do you keep the wrong people from approaching you? 
A plan for your salary.

In your plan, you would’ve already worked out how much you plan to give away. So, when you reach the allotted sum, you’ll know you need to stop. And when you stop, the manipulative ones will naturally walk away.

4. To not have nightmares when you’re 40 years old

Saving for your future. Clearly, the King of Pop at the height of his success didn’t think that he needed to set apart a little for his future. He probably thought his success was permanent. He didn’t think that he too would one day be side-lined for other artists.

All of a sudden there were other musicians with new music. His albums didn’t make as much money as his earlier ones. His income dwindled and he had no portfolio of assets that were paying him a steady income.

You need to think about your future too. Long-term and short-term.

Imagine this. You wake up at 40 and you realise that you’ve not saved anything for your future. You took the money you were earning and spent it all without investing at all. Now you’re older. You have more expenses, retirement is fast approaching, but you don’t have any additional income.

Don’t get to this bad place. Explore ways to wisely invest your money. Look at traditional assets and alternative investments.

Be smart. Work out a plan. Read up a lot about financial planning. Talk to experts in the field. And once you’ve drawn up a plan, stick to it. You can avoid a lot of worries in life.