Ed McMahon is in Trouble, Is There Hope for the Rest of Us?
The AP offered a sour bit of news yesterday. Ed McMahon is facing foreclosure on his $4.8 million mortgage.
While I am not old enough to remember the Johnny Carson days, I have fond memories of his spots for American Family Publishing and of course the legendary Star Search.
At the ripe age of 85, Ed is behind on his mortgage by around $644,000. The question that is racking me is why, at age 85, after several decades of being a paid TV celebrity, does someone like Ed McMahon have a mortgage to begin with? Why doesn’t he just have the $644,000 lying around for a rainy day.
The AP states that after an accident 18 months ago, Ed could no longer work. That means even at age 84, Ed still needed to work in order to sustain his lifestyle. He began his TV career in 1957. After such a long and successful career, it makes me just a little sad to know that a TV icon like him is on financially shaky ground.
Why is this happening?
Didn’t Ed know that you should save for a retirement along the way, investing some of your hard earned dollars so that past the age of 67 at the latest, you should be able to pursue whatever it is your heart desired and not have to worry about foreclosure of your primary residence?
Didn’t Ed know that it taking out home equity lines of credit was not a sustainable way to get money?
We should all take this as a lesson on financial management. As hard as it is to learn from the mistakes of the apparently wealthy. Had the AP news article not pasted my RSS, I would never have even dreamed that someone like Ed McMahon could ever be in financial trouble at his age.
You need to save for retirement and save smartly, targeting your the lifestyle you expect to live. You need to leave the equity in your house alone. Tapping house equity is a bad idea and is counter to conventional wisdom of paying your mortgage off. No house payments means more money for other things, like travel, and expensive hobbies, and not getting foreclosed on.