Black Man Black Woman

Tag: IRS

  • Fighter Pat Barry Wins Big Purse Right Before Being Homeless

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    UFC fighter Pat Barry was thanking his lucky stars for his big win against Antoni Hardonk. The fighter won a $120,000 purse for his accomplishment, which was right on time given that he was literally six days away from being evicted from his apartment. Barry’s win was emotional for obvious reasons and nearly everyone in his camp was in shock to hear about his financial situation. What is saddest is that his challenges are not uncommon among fighters in general.

    Although Pat Barry hasn’t had the chance to earn millions, many major fighters end up going broke even after their gravy trains have stopped flowing. The outcomes don’t make any sense, given that a bit of financial discipline could have made all the difference in the world. When you earn as much as $10 – $20 million dollars in a payday, you can live a pretty wild financial life and still have money to save. Instead, some athletes seem to want to push the limits and it’s actually uncommon to hear of any boxer who DOESN’T end up in the poor house.

    Here are a list of financial demons that plague fighters when they finally hit the big time:

    1) The bling: For some reason, athletes and entertainers are expected to live an incredibly extravagant lifestyle. Mike Tyson employed over 200 people and spent millions on items too ridiculous to mention. What’s worse is that Mike Tyson actually owed as much as $38 million dollars at one point. Evander Holyfield’s $10 million dollar, 54,000 square foot mansion was put on the auction block last year after foreclosure. Many athletes go into debt because they are banking on their next payday to get them out of the new financial holes they keep digging for themselves.

    2) Bad relationships: Divorce is a great way to go broke. Before Muhammad Ali married his third wife, Lonnie, his previous wife divorced him and took his last $2 million dollars right before Muhammad’s career ended with Parkinson’s disease. It was at that point when he found himself broke and unable to earn additional income. Fortunately, a good woman came into his life and used her MBA from UCLA to liquidate the massive financial value from his brand name. So, as much as black male athletes can be ruined by women, they can also be saved by them. However, a long string of baby’s mamas, bad marriages, draining relatives and expensive arm candy can cost an athlete dearly.

    3) The IRS: The IRS is sneaky and has led to the financial demise of many celebs. Even honest, hard working Americans can fall prey to the demon of back taxes. Joe Louis was one great example of a man who made a great deal of money, but found out years later that he owed tax money to the IRS. For the rest of his career, he would wander from one fight to another, with IRS agents waiting in the back room to take the entire purse after the fight. While his career was a great one, he was not a happy man in old age.

    4) A lack of education: A lack of money management ability and inadequate financial literacy plagues many wealthy entertainers and athletes. Growing up in poverty doesn’t exactly endow you with an extensive understanding of trust funds, estate planning, stocks and bonds. One of the great tragedies for NFL and NBA athletes is that many of them attend universities that simply hand the athlete a degree without forcing the athlete to get an education. But there is an old saying that “a fool and his money will soon part ways.” Even if you are incredibly wealthy, you have simply made yourself into a sucker for those who are smart enough to take that money from you.

    5) The leaches: The easiest way to get a pack of new friends is to have a lot of money. In addition to the friends who suddenly find you to be a fascinating human being, you’ve got managers, lawyers, agents, homeboys and baby’s mamas who want their cut. It is not uncommon for a celebrity to have to give away as much as $700,000 out of every million dollars he/she earns. Everybody wants a piece of your pie until you are down and out; at that point, you become yesterday’s news.

    I don’t think that any athlete should live like a miser, that’s no fun. Instead, why not simply save 20% of your income and party with the rest? That would give you a nest egg for retirement and allow you to pay the bills after you’ve fought your last fight. What’s saddest is that every boxer says they are going to retire young and none of them ever do. It’s time to stop living the same story over and over again.

    Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of the book, “Black American Money.” To have Dr. Boyce commentary delivered to your email, please click here.

     

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  • Method Man, Wesley Snipes Arrested for Taxes, but Not Nicolas Cage?

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    I’ve met Method Man only one time, and I’ve never met Wesley Snipes or Nicolas Cage. In spite of his mixed public image, Method Man actually comes across as an intelligent, attentive and down-to-earth human being. At the time I met him, I’d only been on national TV a couple of times, but he talked to me as if he’d known me his entire life. He even recited the lyrics to Ice Cube songs that I brought up and told me stories about Tupac. I was quite impressed.

    The closest I’ve ever come to Nicolas Cage is when his movie came out about the 911 attacks and they forgot to include the black guy’s character. It was incredibly tacky, but effectively, there was an African American named Jason Thomas who played a huge role in 911 – large enough for them to include his character in the film. But somehow, in all their exhaustive research for this multi-million dollar blockbuster movie, they simply forgot that his character was black. Instead, he was cast as a white man. How the producers could have overlooked something so obvious was beyond me. In fact, I find it hard to believe that this was an accidental oversight.

    I don’t have much to say about Wesley Snipes, except for the fact that he should watch what he says about black women. Oh yeah. He needs to also pay attention to his tax bill.

    Where Nicolas Cage, Wesley Snipes and Method Man cross paths in my psyche is on the touchy issue of tax evasion. I listened to Method Man (in this interview) take full responsibility for the fact that he was arrested for owing $33,000 in back taxes. He even jokes about it, which is better than I’d be able to do.

    Nicolas Cage owes far too much money to joke about anything. In various media reports, Cage owes over $6 million dollars to the IRS. Now, I have no idea why Method Man is in handcuffs, Wesley got a prison sentence and Nicolas Cage just has to put his castle and mansion on the auction block (yes, the dude really owns a castle – that’s what my friends might call “Intergallactic ballin” – I came up with term that myself). I am also unsure how a man who’s made so much money could be so far behind on his taxes. At the same time, tax problems are human, and there are tons of Americans in all income brackets who have tax trouble every year.

    As you know, I enjoy finding true teachable moments in everyday life. Given that an IRS audit increases your chances of getting you into tax trouble, I thought I’d bring the classroom to the web and share a few facts with you about taxes, audits and finance.

    Here are 4 things that can increase your likelihood of being audited by the IRS:

    1) Having an income that is greater than $50,000 per year – When you make the cheese, you become a big fish and worth the time to audit. The IRS doesn’t have time to go after little wallets.

    2) You are self-employed – Statistics show that self-employed people tend to do the most wiggling and fudging on their taxes, so having your own business flags you as an audit risk.

    3) Making a mistake on prior tax returns – if you’ve made mistakes in the past, you are likely to make another one…at least more likely than everyone else. This will flag your return for a possible audit.

    4) An excessive number of tax write-offs – if the dollar value of your deductions exceeds a certain percentage of your income, then the IRS may come after you. Make sure that any write-offs you have are well documented and legal. You don’t want to cheat on your taxes or get too greedy when filing.

    Remember that tax problems can happen to anyone, so if you are subjected to an audit, don’t panic. Go buy a book on dealing with audits, “fess up,” pay your fine and go on with your life. You’re not in the same boat as Method Man.

    If you want to hear this right out of my mouth, feel free to click on the video below. I’m going to hang out in Chicago:

    Dr. Boyce Watkins is a Finance Professor at Syracuse University, a leading African American Speaker and author of the forthcoming book, “Black American Money.” To have Dr. Boyce commentary delivered to your email, please click here.

     

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