We’re gonna take a break from our regularly scheduled programming today.
This post will be a bit brief. But I think it’s important. And it really complements (and reinforces) the concepts I laid out in the article I recently put together on celebrity suicides and discrediting the notion that money buys happiness.
There’s yet another cautionary celebrity tale that I think must be shared.
Rolling Stone put out this amazing piece on just what in the world has become of Johnny Depp’s finances. Indeed, what’s become of Johnny Depp.
Please take the time to read it. I’ll wait.
It’s insightful. It’s engaging. It’s maddening. It’s surprising. But it’s also cringe-inducing and gut-wrenching.
Unfortunately, it’s, perhaps most of all, sad.
Johnny Depp has earned an estimated $650 million throughout his career.
Let me repeat that.
650 million dollars.
And a few other estimates have pegged it considerably higher.
He’s approaching the point where describing the amount of money goes from an “M” to a “B”.
In fact, his movies have all combined to net $3.6 billion. So there’s the “B” right there.
Johnny Depp is practically a business unto himself. Actually, he’s almost a country. His lifetime earnings lap the annual GDP of the Cook Islands more than twice over.
That would make sense since he owns an island.
Wait. What?
This is where the wheels come off.
And this is where the cautionary tale begins… and ends.
Johnny Depp has earned millions upon millions of dollars over the course of his (still relatively short) life.
But. He. Is. Broke.
He is, as Rolling Stone puts it, bankrupt.
What happened here is a tale as old as time.
He very simply spent more than he made. He outspent his earnings.
It is not what you earn that matters; it’s what you keep, save, and invest that will ultimately determine your finances, flexibility, freedom, and opportunities in life.
Being a great earner means almost nothing. Being a great saver means almost everything.
Johnny Depp is a very famous movie star. Johnny Depp made hundreds of millions of dollars.
He is not financially independent.
I worked at a car dealership. I made, at my absolute peak, $60,000 per year.
Yet, I am financially independent.
Plus, I’m almost 20 years younger than he is.
The difference here is that I lived (and still live) below my means, while Johnny lived above his.
It’s basic math.
I made sure to lock down the scarcity mindset before moving over into the abundance mindset. It appears that Johnny Depp has not been familiar with scarcity for a very long time.
I’m not ripping on Johnny Depp here, nor am I tooting my own horn.
But I am discussing this today because it’s pertinent that we understand five very important concepts:
- Money does not buy happiness. I want to repeat this. Money does not buy happiness.
- Earning a lot of money does not even come close to guaranteeing financial security. In fact, it may end up accomplishing the opposite.
- You can make a lot of money and still be broke. What you save and invest matters way, way more than what you make.
- It absolutely does not require a high income to become financially independent quickly and/or young.
- High earners, even (or especially) celebrities, are not necessarily free to do whatever they want in life.
Johnny Depp is apparently not financially independent. He’s the opposite of this. He’s instead very much dependent on his continued ability to sell movies and make money, for better or worse.
It’s very likely that for the foreseeable future he’ll basically be forced to do roles/work, regardless of whether or not there is the internal desire or motivation present to do so. It’s a very simple proposition: make movies to earn money. At 55 years old, with his earnings history, he should be set to do whatever he very well pleases for the rest of his life (and 10 lifetimes after that). But he is, unfortunately, not in that kind of position.
His lack of freedom means he is chained to his massive pile of stuff, debt, and numerous obligations that he may or (more likely) may not want to live up to.
The Johnny Depp of yesterday wrote a lot of checks that the Johnny Depp of today can’t cover. I mean that in the financial sense and the non-financial sense. One has to believe Johnny doesn’t want to trot around as Jack Sparrow when he’s 80 (as much as Penélope Cruz might like to see that). What a depressing idea that would be.
In my opinion, the biggest mistake Johnny Depp made was committed many years ago. He came to LA to chase his dream in music. He instead went into acting for the money. And the rest, as they say, is history.
Don’t put that future version of yourself in peril. Think about that future version of yourself, because that person one day will be you. Visualize that future you and the life you want that person to live. Then will it into reality through proper execution.
Don’t put a price on your dreams.
Don’t chase the buck. I assure you, you cannot catch it.
The Rolling Stone story goes down a dark rabbit hole for a bit, where Johnny discusses bottoming out and contemplating suicide. Even by the end of the article, it’s not entirely clear that Johnny Depp is even okay. It seems to me that he is still in a really bad place right now.
This is very, very sad. It’s extremely troubling to me.
Rich people, celebrities, beautiful people, whomever you can think of – nobody “has it all”. Nobody. Certainly not me.
As I recently shared, life is a constant challenge. Happiness is a moving target. And it’s a target only you can see and aim for.
You have to be constantly vigilant and self-aware, cognizant of what you’re doing, who you’re doing it with, why you’re doing it, and whether or not you should continue to do it (the fact that you’ve been doing it is not by itself a good reason to continue doing it).
But much of that requires some measure of control and freedom in your life. You have to have options and flexibility.
Being financially independent is so wonderful because you can pick and choose your spots in life.
When you have to get out of Dodge, you can do so. When the right opportunity presents itself, you can jump on it. When you’re truly passionate about something, you can take the time (because you can make the time) to pursue that.
If you don’t have options, you end up backed up in a corner. And that’s a miserable feeling right down to your core.
Neither fame nor fortune can do anything for you when that’s where you’re at. Only freedom can. And that’s why freedom is far better than fame and/or fortune.
The good news, though, is that it takes neither a high income nor even a lot of wealth/passive income to become financially free – or at least free enough to have a good measure of flexibility in your life.
Just think about what having $20,000 in the bank (or stock market, better yet) does for your psyche. Just think about how much better you feel if you know that you could walk away from whatever you’re doing and be just fine for quite a while.
That’s an amazing feeling!
Yet it doesn’t even cost that much.
Now crank that flexibility up a few levels. That’s financial freedom.
Financial freedom feels that much more amazing, yet it still doesn’t cost that much.
I say that because you can’t put a price tag on your freedom. You can’t put a dollar sign on your life. Your dreams shouldn’t be for sale.
It becomes a choice early on: your life or your money. And if you choose the latter, you’re going down a dark road.
As Charlie Munger put it:
I did not intend to get rich, I wanted to get independent. I just overshot.
Aiming for financial freedom is such a thing where most of the benefits are conferred quite early into the journey. The money actually comes later.
And by then, you’ll already have (or should have) figured out that it’s not money that produces happiness. It’s everything else in your life that makes you happy, but everything else will require the resources available to fully enjoy it. The money just allows for that process to play out. Money is a facilitator. That is all.
The problem is, people continue to chase after the short-term highs by circumventing that entire process and instead exchanging their money for stuff, consuming and spending more than they should/can. They continue running on the hedonic treadmill at faster and faster speeds, wondering why they can’t stop running and get happy.
I spent a lot of money. Now where’s my damn happiness?
Well, it doesn’t work like that.
Pitbull figured this out.
I genuinely hope Johnny Depp also figures this out before it’s too late for him.
What do you think? Did you read the story on Johnny Depp? Any thoughts on all of this?
Thanks for reading.
Image courtesy of: imgflip at imgflip.com/memegenerator/Be-Like-Bill.
P.S. If you’d like to become financially independent and enjoy some of the benefits I just laid out, please check out some great resources that I’ve personally used on my way to achieving financial freedom at just 33 years old – all on a middle-class income!
Hey Jason,
I heard about the story recently.
In my opinion, getting rich and staying rich can be totally two different things.
If you don’t know how to manage money, then whatever amount of money you have in your bank your are still broke. This is what I learned from Johnny Depp and also from many lotto winners 🙂
Best Regards,
FJ,
I’m not sure I’d totally equate lottery winner-losers with Depp, but they definitely have something in common: poor financial decisions. It’s a real shame!
Cheers.
If he put just 1% of that away in to index funds/stock market, or even bonds..he’d earn enough passive income in a year to support him changing to a music career. Maybe not in LA, but he could pursue his dream without having to worry about how to pay for his shelter and basic needs. Basic needs being whatever $260,000/year can be. I wish the best of luck to Johnny. <3 I hope he finds what he is looking for.
Jamie,
There are probably a lot of ways out of this (although I don’t have any idea of all the ins and outs of his finances), but it appears that it will just continue to spiral out of control. At least he still has some star power – for now.
Many of us would be perfectly happy with a fraction of a fraction of his resources. But his expectations have obviously become out of control. When you don’t manage expenses and expectations, lifestyle inflation means you can cancel out any amount of income. The scarcity mindset is way more powerful than the abundance mindset, as a result.
Best regards!
It’s really too bad about Johnny Depp. I think the main problem is that he made too much easy money when he was young. Most young people would make the same mistake. He’d probably handle the money much better if it was more difficult journey. For you and me, it took a lot of work and planning to become financial independent. We sacrificed a lot for this and we value it a lot more.
I hope his finance improves, but it doesn’t look good. The spending is out of control and he doesn’t listen to people who could help. He’ll have to decide to improve his finance before it can get better. That’s true for everyone.
Joe,
Maybe it was just too much, too soon. But it’s also a thing where there was just no personal responsibility at all. Even when he was told that things were out of control and he couldn’t continue spending like that, he just continued on with it – thinking he’d always be able to make more money. Instead of spending less, the answer was always to make more. That eventually catches up to you, as it has with him.
Thanks for dropping by!
Best wishes.
I honestly hope Johnny reads your new book, Jason.
I agree with all your points about how this is a very sad case, but at the same time that is what also makes the world interesting (not about his suffering and the tragedy of the situation but the fact that any scenario can exist)- we all have something to learn and work on while we are alive here and finances is one small piece of that. For some it has more importance and leads to more suffering, and for others finances are less important but there are other life lessons to be experienced and learned.
Stay well out there in CM!
-Mike
Mike,
Definitely. There’s always a lesson to be learned. Always an opportunity to grow, expand your perspective, and become better and wiser. I guess the key is to not rely too heavily on one’s own mistakes to grow, but instead to look at other people’s mistakes. I’m still working on that! 🙂
Cheers.
Jason,
Funny you mention this story. A friend of mine (who is also frugal – does the index thing vs our dgi approach, same coin different sides) brought this situation to my attention. We got a kick out of it because of how sad it is. How he could have easily not bought the luxury touring yacht, the island, the residences, etc. It is kind of a bang your head against the wall story, showered of course with some humor.
– Gremlin
DG,
I highly recommend the RS story, if you haven’t already given it a read through. I read some other pieces before this, but this was by far the most comprehensive (because they had access to Depp and his inner circle, as small as it now is). It’d be funny if it weren’t so sad. My takeaway is that the guy is in a really bad place. Even if he comes out financially okay, he definitely doesn’t seem to be even close to living a happy/nice life. A shame, really.
Cheers!
Not to play pop psychologist, but it doesn’t sound like he really wants to change, deep down. He wants to keep all the islands and houses, just like he wants to keep drinking $30,000 a month of wine. The lawsuit just seems like a way to keep doing what he’s been doing. “If I win a bunch of money in this lawsuit, I can keep this lifestyle going.” That sort of thinking.
I do feel sorry for him, in that it sounds like he had an awful childhood and he never really got over it. I used to know a guy that grew up really poor and had a bad childhood, and he spent constantly, maybe as I way to try and make up for what he didn’t have as a child.
There also could be a certain amount of self destructiveness to it. I used to play a lot of poker, and one of the things you learn is that some people are actually happier when they are losing. They have horrible self esteem and don’t feel like they deserve to win, so when they lose they are actually relieved and feel more comfortable. Their financial situation now matches what they believe to be true of them. There could be some of that going on with him.
One other thing: Most people just don’t understand money, and the concept of saving. That sounds very basic, but I know I didn’t until I was about 35 years old. I never went into debt (fortunately), but I thought whatever was leftover I should just spend. The concept of saving and investing was just foreign to me. I would imagine it is foreign to him, too. This is no surprise as our culture teaches us to consume, consume, consume.
I do hope he gets it all figured out, but as I said, it doesn’t sound like he wants to. Anymore than he wants to stop smoking cigs or drinking wine.
Tim,
I agree. I don’t think he wants to change, nor do I believe he knows how to change. He needs some real help with some of these issues. To say he sounds miserable would be an understatement.
I wouldn’t say I feel sorry for him, though. I also had a tough childhood – way tougher than him (from what I’ve read). But I never let that take over the rest of my life. You have to grow up and move on, make “big boy” decisions.
Definitely, definitely agree with this: “Most people just don’t understand money, and the concept of saving.”
I now go into any conversation, article, or coaching session with the assumption that the person I’m talking to has limited, to no, understanding of money. If you assume someone has gotten to the point to where they greatly understand money, you will very often be disappointed. This goes for poor and rich alike, even people you might think really have it all figured out.
Thanks for sharing!
Best regards.
Johnny’s hero, for whatever reason, was Keith Richards. He wanted to look like him, sound like him, play the guitar like him & dress like him, and even brought him into his movies. Maybe if he had listened to The Rolling Stone’s song ” You can’t always get what you want”, he might be better off today
Brian,
Indeed. If what you want is “more”, you’ll never get what you want.
Best regards!
This is where a fee-based financial advisor really becomes something beneficial to have. Most people think that they are there to share boiling hot investment tips with you and make you rich off one investment (as slimy brokers used to–and sometimes still–falsely claim to do). In actuality, they are supposed to provide guidance and planning for people with lots of wealth and/or income but limited financial knowledge.
If Depp had a financial advisor who laid out a financial plan, he probably would be in a much better place financially. Of course it would require Depp to actually listen and stick to the plan, but even getting told by a financial professional that XYZ will so far more harm than good might have made Depp a bit more cautious when it came time to make those big unnecessary purchases (like an island).
Sincerely,
ARB–Angry Retail Banker
ARB,
Hmm, it’s an interesting thought. We’ll never know what would have happened. Kind of a “coulda, shoulda, woulda” situation here.
But the article does go into how his advisors repeatedly warned him about his spending. Depp’s answer was always to make more money (by making more movies). He was 100% abundance mindset and 0% scarcity mindset. Something to be said for balance.
Depp even pondered via email whether or not he was broke. But he never changed anything about his lifestyle.
Cheers!
I think this is a great topic. I call many people like this “fake rich” its actually very common 🙁 we have lots of fake rich here in the USA they earn much but spend more. My wife works part time at a very successful doctors offce, just recently the PA at the office was very very stressed and told a few folks that he was just short of 2 million in debt ! Sounds huge … It is ! He make well into 6 figures a year but unless he makes changes will never make FI.
Bob,
Absolutely.
I loved reading through The Millionaire Next Door. Really opens your eyes as to how the truly wealthy people out there build wealth… and keep it.
Best regards!
I dont usually tell my life “stuff” but you share a lot so here goes… My wife (#2) was a VP of a large bank in Chicago she lost her job in the financial crisis of 08 09 ( surprise ) before we met. She made close to 6 figures but had 5 credit cards a car payment and a mortgage typical American. She had zero savings and no clue. I joke with her that she is an example of how we got into that 08 mess, she truly has no idea what the 08 09 crisis was !!!! I walked her through how to pay off ALL her debts and made it in less than 4.5 years. Fast forward a few years and poof what happened ? She bought a new car 🙁 now she has a car payment ( again ) and higjer car insurance ect. I was a bit beside myself when I aksed why would you do that ??? Her response…. I deserve it. Hmmmm well sometimes you do get what you deserve. Thankfully we keep our finances separate ! Some people never ever learn 🙁
Bob,
“I deserve it.”
That’s an interesting phrase:
https://www.mrfreeat33.com/i-deserve-it/
Cheers.
Thank you for that link 🙂 very very good reading Im going to try to get my wife to read it and perhaps learn as well.
All the best Jason
I did read the story about Johnny Depp and I thought it was really sad. I like him and I hope he bounces back. It’s a quintessential story of a guy who is the victim of his own success, but thankfully, his life story isn’t over yet and there’s still a chance for a happy ending. The same is true for the rest of us.
I myself am chasing that elusive status of financial independence. I still have a job and am dependent on the paycheck. But I also created a dividend portfolio, coincidentally valued at about $20000. My goal is to build that portfolio where the passive income will AT LEAST supplement my existing income, and hopefully replace it.
Lots of people win the lottery but don’t know how to manage it and lose it all. You’re right in that it’s not about how much money you make, but what you’re able to save and invest that counts.
DP,
Yeah, the spending can become (and usually is) a problem for anyone. Those with high incomes are not immune to this. I remember you mentioning the problems you’ve had with your own spending lately. Now just greatly magnify that. Veering off course, even for a little bit, is a much greater problem when the numbers are also greater. Depp’s problem is that the numbers were huge, and the amount of time he spent veered off course was also very long.
He still has some earnings power (although the article hints at even that being significantly threatened now), so it’s not like he’ll be destitute. But he’ll have to adjust his lifestyle and expectations in a major way going forward – and he clearly doesn’t seem ready for or interested in that.
Cheers!
It doesn’t sound like JD is broke just that he bought too much stuff, islands, houses, cars etc. Reads as if he has no cash flow. I bet if he sold everything he would would have positive worth. His problem seems to be he needs to purchase some income producing assets. Start renting out all those houses and islands he owns for some income.
Anyways wish him the best, one of my favorite actors, always seems to keep his sense of humor.
Frank,
I disagree. Multiple sources are indicating he’s bankrupt. Assets don’t mean much if you have matching debt (or more) against them. And because of his poor cash flow (as you allude to), he’s had to heavily leverage himself. Plus, he apparently owes quite a bit to the IRS, which will require selling off equity he might have in his assets. The bankrupt label that gets thrown around seems to be apt, but he could pull himself out of his hole by continuing to make movies/money. However, that just further reinforces the point I’m making here.
Cheers!