Athletes and entertainers face unique wealth management opportunities, considerations and challenges. The athletes and entertainers we interviewed shared their personal stories and perspectives to highlight the need for more financial education in the sports and entertainment world. We thank them for being strong advocates of financial literacy.
Michelle’s advice
Michelle’s advice
“You should understand exactly what you’re investing in, the risks involved, how much you can lose and how you can access your money. Don’t rely on someone else to make financial decisions for you. You need to stay involved.”
Independent women
Michelle joined Destiny’s Child, one of the best-selling female recording groups of all time, when she was 21 and rocketed to fame with the hit single “Independent Women.” The song was featured on the soundtrack for the movie Charlie’s Angels and topped the Billboard Hot 100 chart for 11 weeks. The whirlwind success took her far from her hometown of Rockford, IL, where she grew up with a strong role model for an independent woman: her mom, Anita.
An all-star mom
Anita raised four children with her husband, Dennis, while working full-time in the medical field. “My mom invested for her retirement through her job. I would see the envelopes with the account statements all the time. She had a nice nest egg when she retired.” Her mom set a good example and taught Michelle the importance of setting financial goals.
Music contracts and royalties
Michelle recalls how she felt when she signed her first contract as a member of Destiny’s Child. “You look at your record label contract and it’s worth literally what most people will make in a lifetime.” Record companies give artists an advance on the contract and recoup that money through music sales, tours and endorsements. Artists don’t receive royalties on their music until the full value of the advance has been recovered.
You look at your record label contract and it’s worth literally what most people will make in a lifetime.
Although Destiny’s Child released their last studio album, Destiny Fulfilled, in 2005, their music remains popular. Michelle reunited with her bandmates, Beyoncé Knowles and Kelly Rowland, for the 2013 Super Bowl XLVII Halftime Show and the 2018 Coachella music festival, engaging a new base of fans. “I’m blessed. Every time one of our songs is used in a commercial or sung by an American Idol contestant, we receive a nice-sized royalty check.” Digital downloads of the group’s music also add to the royalty stream.
Money mentors
Mentors in the music business like “Big Jim” Wright, a producer who worked with Janet Jackson, Patti LaBelle and other renowned artists, offered Michelle frank advice about money. “Big Jim said, ‘Always live below your means. You shouldn’t buy a multimillion-dollar house just because you can.’” Keeping this in mind, Michelle purchased real estate in her hometown area, where the cost of living is lower. “I’m a homebody. My home is my retreat. It’s just me. Why would I need to live in a 7,000-square-foot house?”
She also learned about finances from her uncle, a successful doctor. “He’s not flashy. He can afford a Bentley but drives a modest car. His kids got used cars when they started driving.” Instead, her uncle chooses to spend his money on experiences that bring his family together and create lasting memories. He treats his extended family to annual vacations, such as a recent trip to Hawaii.
Knowledge is powerful. Ask questions. It’s your money—you have a right to know what’s being done with it.
Hard lessons learned
Michelle’s first solo album, Heart to Yours, rose to number two on the Billboard® Gospel Albums chart. She also starred in Elton John’s Broadway musical Aida and Oprah Winfrey’s stage production of The Color Purple. In 2008, she released a new album, Unexpected, collaborating with music producer Rico Love on her first foray into contemporary pop music as a solo artist.
Busy with her career, she entrusted her financial advisor to make investments that she didn’t fully understand, a mistake that she wants other entertainers to avoid. She assumed her financial advisor would automatically adjust her investment portfolio to protect her from significant losses, especially given the 2008—2009 financial crisis and looming recession. In hindsight, Michelle and her financial advisor should have agreed upon her risk tolerance, time horizon, the types of investments she was comfortable with and the need to diversify her assets. The lack of communication and misunderstanding resulted in a substantial investment loss.
“Knowledge is powerful. Ask questions. It’s your money—you have a right to know what’s being done with it.” It’s important for investors to be able to describe what they’re investing in and understand how the investment will generate a return. They should be aware of the associated investment risks and the potential maximum loss. Michelle is financially conservative by nature, so in retrospect, a high-risk investment that could lose all of its value was not well-matched with her risk tolerance. Her investments were also not well-diversified, so it was akin to putting all her eggs in one basket.
You have an opportunity to help your family. I would hate to see someone else have their money mismanaged.
Entertainers are especially vulnerable
“A lot of entertainers have grown up in less than desirable situations, sometimes without parents, let alone seeing examples of sound money decisions being made. You get people who prey on you.” Michelle feels strongly about helping other entertainers learn from her experiences. She knows firsthand how life-changing a music contract can be. “You have an opportunity to help your family. I would hate to see someone else have their money mismanaged.”
Unlike professionals who earn a steady salary over several decades, entertainers have highly variable incomes. Michelle has a broad library of music that generates royalty streams, but she notes that this isn’t always the case for others. “Entertainers don’t get a check every two weeks. You may never receive another contract. You’ve got to stretch your earnings to last a lifetime.”
Setting boundaries for providing financial support to family and friends is something Michelle has learned to do. “I bought my mom and dad a house, but they’re the only people that I’m financially responsible for.” She sympathizes when entertainers feel obligated to take care of everyone given their good fortune, but she advises limits. “Some people might think you’re being selfish, but you have to save your nest egg. Someone else’s emergency is not your responsibility.”
Your name is part of your wealth
For celebrities, reputation is currency. “I was talking to Kelly (Rowland) the other day about being in the business for 20 years. I still get invited to amazing A-list events. If you keep your name clean, you can be depended on. People will call on you.” In the past few years, Michelle starred in a television series on the Oprah Winfrey Network and appeared on the hit television show The Masked Singer in 2018.
Giving back
“I made an investment in the Chicago Sky, a WNBA team, because I wanted to help my community. I wanted at-risk inner-city youth to have a chance to see women’s basketball. I haven’t seen a dime from it, but it’s one of my best investments.” Michelle also supports mental health organizations and has shared her personal experiences with depression. She uses her celebrity to shine a light on the need for more education and awareness of mental health issues. Her hope is that her story encourages others to reach out for help.
Community and causes
Community and causes
- The Chicago Sky, a WNBA team
- Inner-city youth
- Mental health education and awareness
Start here
Start here
Together, we can build your legacy.
Start here
Start here
Together, we can help establish the legacy you want to leave.
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