Stop making fun of 50 Cent’s bankruptcy, you monsters

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It’s easy to make jokes about 50 Cent filing for bankruptcy — and some of them are even funny.

But it’s worth a moment to consider the path of 50 Cent and remember that celebrities and sports stars frequently struggle with bankruptcy (or get near it), from MC Hammer and Rihanna to Mike Tyson and Lenny Dykstra.

50 Cent’s particular situation isn’t yet clear — how the money-obsessed rapper got to bankruptcy is still a mystery, even with his renown as a savvy businessman. Just last week, a jury ordered him to pay millions in damages after losing his defense against a woman who said he shared her sex tape without her permission. As others have noted, a bankruptcy filing is a good way to avoid paying someone $5 million since a bankruptcy filing erases most legal judgments. 50 Cent also last year had a $17.2 million judgment against him, which caused a judge to freeze his bank accounts.

Lawsuits are a good way to reverse wealth. There’s also the chance 50 Cent struggled with balancing his income and his lifestyle. That says something about all of us — and not just those who live lives of models and bottles and bling. There are three major, relatable reasons that celebrities end up this way, which also apply to most middle-class Americans: a lack of financial literacy, the lure of high debt to support a life beyond their means and the prevalence of bad advice.

50 Cent, in other words, is all of us.

Put another way, as Biggie once famously said, “the mo’ money we come across, the mo’ problems we see.” That’s true for everyone. Everyone thinks more money will solve their problems, whether they make $35,000 or $4 million yearly. The truth is that more money usually just invites new pitfalls — new temptations, more stupid investment schemes, more opportunities to spend.

A Goldman Sachs partner who earned $71.5 million in a single year and had $500 million in net worth still reportedly required a personal bailout from the firm. Having millions doesn’t make you smarter. Having a few thousand more doesn’t either. As John Gapper wrote about spendthrift bankers, “even the rich can be repossessed.” Lottery winners blow their fortunes so regularly that it has become a cliche. Middle-class homeowners borrow or refinance too much to buy or improve homes beyond their means, and end up in foreclosure. Eighteen-year-olds eager to get a start in life sign up for private colleges with student loans of $200,000 or more, which is more than they could ever hope to pay off even over decades.

The theme is the same: No one is immune. Money reveals us. It is a mirror that shows us how unrealistic we are about are lives. And what it reveals isn’t always pretty.

Part of the reason that money gets at the crazy in all of us is that we aren’t trained in it. This is true even of 50 Cent, who managed to get in on deals involving Vitaminwater, or Rihanna, who started the year with $11 million but lost nearly all of it between her tour and expensive house.

NFL player Derrick Brooks never grew up with a bank account or a credit card — “financial literacy wasn’t discussed in my household. I just grew up not exposed to it,” he said last year — and now gives speeches to kids about how to think about money.

Brooks starts by telling them they should starting talking about money, something many families avoid. The New York Times‘ Ron Lieber recently tackled this in a book, The Opposite of Spoiled, designed to teach parents how to talk to their kids about money. It’s good advice for adults, too.

Students take classes on chemistry and math and English, classes on civics and voting, but nothing in our schools in the United States advise how to be a financial citizen — how to think about money, maintain a bank account, invest for the future, or pay for college. To learn these skills, people often have no option than to turn to financial companies — a Schwab, a Fidelity or a Chase — that has an obvious interest in where that money goes, and the fees that pay for it.

Some commentators say financial literacy doesn’t even matter, that the financial system is so rigged against the poor and middle-class that learning the language of money won’t stop anyone being fleeced. They’re not completely wrong: becoming good at money is an uphill battle. As we saw in the aftermath of the financial crisis, when consumers fought against often baffling foreclosures, homeowner relief lagged far behind bank bailouts.

Still, there is a benefit for basic competency. Budgeting resources like the Mint and LearnVest apps encourage people to actually talk about and think about their money — to open those envelopes of bills.

Rappers like 50 Cent or sports stars like Brooks, on the other hand, often go from poor to rich nearly overnight, and are then surrounded by advisers who seem like experts. Some of those people, looking to their own fees, give bad advice.

The No. 1 myth in America is that having money makes you smart about money. This is completely untrue.

Our financial system perpetuated this myth of “money means financial intelligence” for years with the idea that anyone with more than $1 million in assets is a “sophisticated investor.” The idea is that anyone with money can afford good advice.

Unfortunately, advice is not priced at the market rate: plenty (not all) high-priced, well-connected accountants, advisers and money managers are paid by fees, which means they’ll mostly favor getting more fees than giving good advice, just like financial companies have an obvious interest in where your money goes.

The Securities and Exchange Commission has been fighting this battle against bad advice for years. It’s hard when most people — even those with plenty of money in the bank — can’t tell the difference between an accountant, broker and investment advisor, much less a money manager, trader and investment banker. Finance is so mystifying that all of these professions are just money workers.

Celebrities are particularly vulnerable. Stars including Leonardo DiCaprio, Ben Stiller and Matt Damon fell for A-list stockbroker Dana Giachetto, who partied hard, allegedly spent $10 million of their money, and eventually pled guilty to securities fraud.

Even if a star can’t prove she received bad advice, she can still be disatisfied with her financial managers. Rihanna alleged her accountant didn’t stop her from spending beyond her means. (Her song “Bitch Better Have My Money” is reportedly is about that lawsuit, which has now been dropped.)

50 Cent seemed like an exception. He was particularly admired because of his work as a savvy businessman, which drew approval even from Goldman Sachs CEO Lloyd Blankfein, who told New York magazine that he discussed “businessy things” with the rapper and gave him a high grade. “He’s an impressive kid,” Blankfein said. “And by the way, it’s Fitty Cent. Fitty.”

But even savvy businessmen fall into trouble.

For anyone who with a cent of discretionary income, the way you spend your money speaks volumes about your priorities. Before anyone sneers at 50 Cent for rapping about his money, consider how frequently middle-class people brag about their nice house, fast cars or expensive educations. (If you’ve ever met anyone who graduated from Harvard and didn’t mention it in the first five minutes of the conversation, consider yourself lucky.) If you talk about those things, even if you don’t put it on an album and call it bling, you’re still bragging about your money.

People are even more likely to brag if they came from no money and no connections. In some cases, it’s a classic American rags-to-riches story; in others, it’s a cautionary tale. The transition from the lowest rung on the economic ladder to the highest is not an easy one. It’s easy to make fun of rappers for their bling and bragging about money. Wealth is a rapper’s currency, even for the ones who grew up comfortably middle-class like Sean Combs or Kanye West.

Fitty was a repeat offender, with lyrics that questioned if women only loved him for his money or naked financial ambition in “Get Rich or Die Tryin’.”

But there’s a simple reason that 50 Cent, Kanye and your obnoxious neighbor continue to brag about their nice houses and expensive vacations: money is power.

The need to assert money is even greater in the case of someone whose power or status has been questioned. In inner-city neighborhoods, “fresh” clothes show a claim to a higher economic class.

The late, great Notorious B.I.G. created modern poetry from his economic hustle. His song “Juicy” is dedicated to his financial rise from hungry kid to drug-dealing father to crossover musical star: “Born sinner, the opposite of a winner/ Remember when I used to eat sardines for dinner… I made the change from a common thief/ To up close and personal with Robin Leach.”

Rappers, like kings, like to brag about their money because it shows influence and status. Versailles, the vomitously elaborate gilded palace outside Paris, was nothing if not Louis XIV’s attempt to overcome doubters about his throne with an intimidating show of power and wealth. Meanwhile, he was driving himself and his aristocrats to near-bankruptcy — not to mention France itself, which suffered lost wars and financial hardship. This is why there are so many parallels between Renaissance bling and the rappers of today: Gold always speaks loudly, and frequently moreso than the truth.

So reserve your judgment about 50 Cent’s bankruptcy. Maybe he was reckless. Maybe he was stupid about money. Maybe he did blow it. But all of us know someone who has, and there’s no use standing in judgment and pretending we have it all figured out.

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