Legendary singer Dionne Warwick has mismanaged her fortune and is now left with just $1,000 in the bank. Don’t make her mistakes.
Financial Mismanagement Forces Dionne Warwick Into Bankruptcy
In a sad and shocking turn of events, legendary singer Dionne Warwick has been forced to file for bankruptcy protection. Despite an illustrious singing career that spans five decades, Warwick is down to her last $1,000. This pales in comparison to her debts which surpass $10 million to the IRS alone in back taxes, interest and penalties. Despite being in her seventies and well past her career peak, Warwick still manages to earn over $20,000 per month in royalties and other income, yet mismanagement leaves her with a paltry $10 per month after expenses.
Unfortunately its not surprising to hear about young athletes and entertainers going broke, but a talented singer and businesswoman with a 50-year career being in dire straights is sobering. How did she get there and what can business owners learn from her example?
1. Don’t outsource all of your financial decision-making. Much of Warwick’s financial problems stem from shoddy accounting and poor internal controls during several decades of her career. This mismanagement (and likely misappropriation of funds) by untrustworthy people left her vulnerable. She may be a singer, but earning millions of dollars per month at her peak made her a business and she should have played an active role in overseeing her fortune.
2. Never play fast and loose with the IRS. If you owe money to the IRS, this won’t go away. You have to address the problem head on.
