Ed McMahon, notable sidekick to Johnny Carson for what, 25 years or so, host of Star Search for 12 years, and pitchman for Publishers Clearinghouse Sweepstakes for who knows how many years, is making headlines for hitting the skids. At 85 years old, he is late on roughly $650,000 in payments on his $4.8 million mortgage with Countrywide.
So what’s the problem? For a guy who’s been working forever, in the entertainment industry, where we are taught that employment is very lucrative, this seems pretty odd.
Apparently at 83 years old, Ed broke his neck, and has been unable to work. And the housing market coupled with the his injury is forcing him to fail making his payments. He put the home on the market 2 years ago, and has been unable to sell it.
Are we really supposed to believe that a guy who was forced to stop working at 83 due to injury, and worked in a lucrative business all his life is supposed to go broke 2 years later? Are we supposed to feel sorry for this? In the article, McMahon cites “the economy, health problems, and poor planning” as reasons this happened. I think we can strike the first two excuses from the list.
He isn’t exactly shirking responsibility, but this is an “aw, shucks” way of avoiding the significance of POOR PLANNING. First of all, the guy should have socked away a boatload of cash in his line of work. Second, he should have planned for retirement, differently, and should not have been living in a house with 4.8MM in debt unless he had significant liquid assets on the other side of his balance sheet. I love that he was still working at age 83, but sadly this seems now to have been out of necessity rather than a passion for his work. 
The market has been turbulent, this much is obvious. But when high profile, high income-earning people like this get caught up in the mess, you have to take a hard look at why. Is the economy so bad that even rich guys like Ed McMahon, Jose Canseco, and Evander Holyfield are getting wiped out? Or is it a fact that people with more money that most of us can fathom can get ruined with poor planning, while modest income-earning blue collar workers, and others can take a slow steady path to safety and wealth if they plan wisely? The answer is very clearly the latter.
Look at this headline for Holyfield’s case. “Not Broke, Just Not Liquid”. You must learn how to plan, and learn not to compartmentalize your financial decisions. For those who’s mortgage is their biggest bank account, this is where it begins. Work with a Mortgage Planner to learn how to position yourself for the right balance of cost, safety, and return on your investment.