Johnny Depp and his (mis)fortune – a case study

EDWARD SCISSORHANDS WILL BE CUTTING DOWN ON EXPENSES SOON

Johnny Depp is perhaps one of the most popular Hollywood celebrity on the planet. He gains the spotlight a new with respect to his (mis)fortune.

Whatever may be truth behind what happened to his wealth, the following are some that may be learned from it.

Key takeaways:

1. Document transactions

  • No documentation, no proof.
  • Contracts make clear the terms and conditions of a transaction.
  • Documentation generates necessary evidence in case of dispute later on.

2. Manage your wealth.

  • Wealth management is a personal responsibility.
  • Managers are there only to assist and facilitate.
  • Provide clear writteb instructions when making purchases.

3. Moderate spending.

  • Basic math will tell you that your expenses should not be more than your income, if you want to be on the black.
  • Double-down on thinking twice before spending.
  • If you have to spend, do it on investments like real estate, stocks, bonds, and analogous financial instruments, or in businesses.

4. Set boundaries.

  • When his family claimed that he gave them the Kentucky farm where they live in and promised to regularly provide them money, he denied it.
  • Setting clear boundaries fron the start is crucial to avoiding sensitive family disputes.
  • Documentation is again vital.

5. Sign a prenuptial agreement.

  • No matter how wealthy a perso is, every divorce/annulment of marriage reduces his/her wealth by half.
  • Imagine if there are two or more marriages and they go south.
  • In the Philippines, prenuptial does not rule out the spouse from being a compulsory heir in case of deathy by the other; validity of prenuptial agreement is only during the lifetime.

6. Pay your taxes.

  • Sometimes, due to non-payment of taxes, penalties and surcharges are higher than the prinicipal tax payment due.
  • Creating the necessary fund for tax payment is thus important.
  • Ensure documentation for tax payments made.