A Man is Responsible for his Money
This week I was taken aback to read about actor Johnny Depp’s financial maelstrom centering on his business managers and their alleged mishandling of his extensive assets. In short, Depp has filed a lawsuit against the principals of an L.A.-based firm called the Management Group, headed by brothers Joel and Rob Mandel. He claims they caused him to lose tens of millions of dollars, made personal loans with his money, and forced him to unnecessarily liquidate property assets because they claimed he was in the red.
Depp, who is reputed to have made more than $650 million through the course of his 30-year career in Hollywood—and is still a sizable box office draw—is seeking $25 million in damages.
Obviously the courts will decide where the faults lie and mandate whatever actions are necessary to amend the situation, if any. But what I find so interesting about this story is what appears to be Depp’s complete failure to maintain a focused picture of his personal assets and investments.
I don’t walk in his shoes, so I can’t claim to understand everything on his plate. Yet I think it’s a reasonable responsibility of every individual to maintain tabs on what’s happening with their money.
Believe it or not, the lawsuit states that Depp never even had a contract agreement with the Mandel brothers stating how much they were supposed to be paid. The suit claims that, since starting with him in 1999, the firm received more than $28 million up through last year, which seems a considerable amount given the circumstances and may or may not have been earned.
At least to some extent, I understand that Depp is an artist and money management may not be his milieu. That is, of course, why it’s in his best interest to hire intelligent, responsible and—one would hope—honest people to take care of his business to begin with. But there has to be some degree of balance in how you turn your business affairs over to a professional.
Sad to say, there have been some notorious cases of wealthy celebrities being duped into having their hard-earned money absconded. Music legends Elton John, Billy Joel and Sting lost a collective $130 million, allegedly to business managers and financial advisers. Once again, it’s a harsh lesson in how a hands-off method of minding your money may not be a practical choice.
More times than not it would probably serve in your best interest to yield to a professional’s decisions in terms of investment choices, but that doesn’t mean one doesn’t stay in the loop. I suspect a good business manager is going to make it part of his duties to keep regular transparent communication flowing between himself and his clients.
To whatever degree a client might want to forego decision-making, it’s still in everyone’s best interests—the business manager’s included—to keep all parties up to date and operating on the same page.
Depp is an amazing actor and artist, but business is business. Going forward I hope he invests a little more time learning the lines of his financial framework.