You MUST Control Your Spending

Here's another example of the fact that no matter how much you make, you have to spend less than that or you're going backwards financially. Today's piece is about ex-boxing champ Evander Holyfield who made hundreds of millions of dollars during his career:

Holyfield has likely made hundreds of millions of dollars during his 24-year boxing career, including a reported $34 million for his second bout with Tyson in 1997, the infamous “Bite Fight” that ended with Tyson being disqualified for gnawing off a chunk of Holyfield’s ear.

But somehow it wasn't enough. He spent more than he earned (which is hard to believe) and is now in deep financial trouble:

His $10 million estate in suburban Atlanta is under foreclosure, the mother of one of his children is suing for unpaid child support, and a Utah consulting company has gone to court claiming the boxer failed to pay back more than a half million dollars for landscaping.

He seems to be yet another example of boxers who simply can't control their spending:

Joe Louis kept fighting well past his prime trying to pay off a crushing tax debt. Sugar Ray Robinson admitted he was broke by the time his long career ended. Mike Tyson has squandered most of the vast fortune he accumulated during a career that included two memorable fights with Holyfield.

Not much to say here other than to reiterate the obvious -- no matter how much money you make, you must spend less than you earn. Otherwise, you're losing financial ground. This is why I list "spend less than you earn" as my best piece of financial advice.

And just so you don't think Holyfield and his boxing buddies are the only ones who can spend well above a decent income, check out these posts:

• It's Still Not What You Make, It's What You Spend

• It's Hard to Save Money On Only $250,000 Income

• How to Go Broke on $200,000 a Year

• Michael Jackson and More: It's Not What You Make, It's What You Spend

• How a Billionaire Can Go Broke

And to end this subject for today, The Spending Smart Philosophy: Controlling Spending is the Key to Building Wealth is a worthwhile read as well.

Comments

[Curt]

Some people are good at making money, but if they can't continue to make money, than they need to learn how to 'spend less than they make'. Many people are lucky to find a large sum of money in their prime of their career, but holding on to it is another skill. Most people (like me) have not found my pot of gold yet, but I'm working on my 'spend less than you make' skill everyday.

[Eric]

This is similar to those who win the lottery or obtain a windfall through other means. Sometimes it's really hard to control your spending but I can not fathom (probably because I'm millions of dollars off) spending millions of dollars. If I were to spend millions I would be buying business, franchises. Rappers are another example outside of sports. Many rappers suddenly become millionaires and they spend the money on junk. Other rappers turn around and start record labels and become multi millionaires. Yet still, I can not fathom spending millions of dollars on anything other than stocks or buying business.

[Katy McKenna]

Another sad part of this equation is that often people (and that includes regular folks like us!) can't imagine a day when they won't be earning this amount of money or MORE. Really, everyone needs to have the attitude that their ability to earn an income could be taken from them at any time, and behave accordingly.

I noticed that Donald Trump is speaking up on behalf of Ed McMahon. I can't imagine why, but he's said, "We can't let this happen to Ed McMahon."

But bad stuff happens to people who don't plan well every day. Why should Ed be different? Am I missing something?

[Ken]

Apparently his talent for waste far exceeded his impressive boxing skills. I hear you can get a "Real Deal" on his 54,000 sq ft mansion with 17 bathrooms.