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Business News/ Money / Personal Finance/  Nicolas Cage’s multi-million dollar debt trap: Nine money lessons to learn
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Nicolas Cage’s multi-million dollar debt trap: Nine money lessons to learn

Nicolas Cage, the Oscar-winning actor, has cited a real estate crash for his multi-million dollar debt

US actor Nicolas Cage has cited a real estate crash for his multi-million dollar debt. (AFP)Premium
US actor Nicolas Cage has cited a real estate crash for his multi-million dollar debt. (AFP)

Nicolas Cage’s multi-million dollar debt trap: If you are rich and famous, it does not mean that you cannot go wrong with your money. Even rich people do make major mistakes with their money, landing them in a debt trap. Nicolas Cage, the Oscar-winning actor, has cited a real estate crash for his multi-million dollar debt. “I overinvested in real estate. The real estate market crashed and I couldn’t get out in time," Cage said in an interview with “60 Minutes."

“I paid them all back, but it was about $6 million. I never filed for bankruptcy," he said.

Here are major money blunders and lessons for all investors to learn from Nicola Cages' multi-million dollar debt trap

1)Financial literacy

One important lesson that can be derived from Nicolas Cage's experience is the importance of financial literacy and responsibility. Within the financial industry, investments and opportunities can be quite volatile, and it is essential to be aware of the risks involved, as well as the best practices for managing assets and debts properly.

“It is also important to understand how economic shifts and global events can impact our finances and to plan for the unexpected. By being financially informed and prudent, individuals can mitigate the risks of financial hardship and better enjoy the benefits of financial freedom," said Suren Goyal, Partner, RPS Group.

2) Risks of investing in the real estate market

We can learn from Nicolas Cage's crises about the risks of investing in the real estate market and how sudden shifts in the economy can affect our financial stability.

“The real estate market is a volatile one and can crash at any moment, leaving investors in debt," said Anurag Goel, Director, Goel Ganga Developments

According to Vinit Khandare, CEO and Founder, MyFundBazaar, Nick Cage was struck with a one-two punch of a cash flow problem and a sharp decrease in home values. He let unpaid property taxes accumulate and made late mortgage payments.

“Be cautious while putting your realtor on the spot. Real estate agents are reporting increased business as property prices are now climbing once more," said Vinit Khandare

However, Cage got into difficulty because of overly pushy real estate salesmen (along with his own poor judgment) and you may easily experience the same thing, added Khandare.

3) Diversification

The key takeaway from his crises should be the importance of diversification.

Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management said that it is essential to diversify our investments, monitor the market trends and have a financial plan in place to avoid possible financial troubles.

Nicolas Cage owned multiple homes, all of which were affected by the crash. Had he diversified his investments, such as investing in stocks or mutual funds, he may have been able to offset his losses, explained Anurag Goel.

4) Pay your mortgage

Always pay your mortgage even if you have to put off paying some obligations due to financial issues. That ought to be done first, said Vinit Khandare

5) Avoid purchasing expensive residences

Vinit Khandare said that one should avoid purchasing real estate, particularly expensive residences, during a housing boom.

6)  Don't buy if you can't afford EMIs

Don't acquire property if you don't have the resources to endure a potential market slump. In both good and bad times, make sure you can afford the monthly payments, said Vinit Khandare.

7) House on sale

 Vinit Khandare advised investors to put the house up for sale if you can no longer afford it. Avoid waiting for the foreclosure courts to pursue you.

Get in touch with your bank(s) right away if you're having trouble making your mortgage payments. Don't let the thing get out of hand to the point where you end yourself in court, as Cage did.

8) Solid financial plan

It is essential to diversify our investments, monitor the market trends and have a financial plan in place to avoid possible financial troubles.

It is important to have a solid financial plan in place and to live within your means. Overspending and accumulating debt can lead to devastating financial consequences, as seen in Cage’s situation, said Anurag Goel

9) Financial advice

It is also crucial to seek financial advice and regularly assess and adjust your investment strategy to avoid being caught off guard by market changes.

Additionally, it is crucial to seek professional guidance to make informed decisions about our financial investments, suggested Siddharth Maurya

Nicolas Cage was once a top earner in Hollywood. He is best known for his performances in “National Treasure" and “Leaving Las Vegas" movies.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
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Published: 27 Apr 2023, 11:21 AM IST
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