Last week the Sunday Herald Sun broke the story that Mark Philippoussis was broke.pparently he served a few faults on his mortgage, and now a finance company is chasing him for about $1.3 million, costs, and possession of his home.
Had some sneaky ball boy trousered his estimated $10 million fortune?
As I read, I was expecting just another cliched story of the playboy without too much play left in him.
But I soon saw that Philippoussis' comments served as an excellent overview of what not to do with your money.
Let's take a look at how The Poo told of losing the money game.
15-LOVE: "IT'S like that show Entourage – I did all that and more," Philippoussis said.
When he wasn't chasing around a ball, he was living the classic playboy lifestyle – buying mansions and driving Ferraris, Lamborghinis, and Paris Hilton.
Which probably attracted a lot of hangers-on to help him flush his dough down the dunny in little more than a decade.
Yet the really wealthy people that I know, whose wealth is in the tens of millions and more, go out of their way to avoid people who are attracted to them because of their wealth.
And if we go out to dinner together, we generally split the bill and they always read it. Twice.
I've found that it's the big spender who splashes around the bucks that has the least amount of money, especially if they're trying to uphold a reputation of being wealthy.
30-LOVE: "MONEY came in left, right and centre: you just thought that's how it is for everyone, and that's how it will always be."
Err, no. It's always dangerous to get this far away from reality.
Perhaps winning a few tournaments helped develop this delusion (although with Scud's career, there were perhaps more misses than hits).
In any event, the fact that he didn't see an end to his career when everyone in the stands did shows that he was a man living on borrowed tennis time.
Smart money managers understand that nothing is constant, and that having all your eggs in one basket is a recipe for disaster.
As the years wore on, Philippoussis was racked with injury, which dried up his sole source of income.
Philippoussis has admitted that he hasn't worked for three years (and people who watched his reality dating television show The Age of Love (Kittens and Cougars) will not be surprised to hear that).
The people who make, and keep great fortunes, work hard at diversifying their incomes away from their original cash cow, so that when things inevitably dry up they have something to fall back on.
This is as relevant for a playboy sports star as it is for a salary-earning suburbanite.
Owning investments such as shares and property that produce steady, growing income is a sound strategy; turning your passion into profits via a part-time position is even better.
40-LOVE: "I didn't understand that maybe I should ask questions about this or that or check things."
Maybe it was that he trusted the people around him, or perhaps it was that he didn't want to appear silly, but failing to do background research is the undoing of us all.
There are no stupid questions (except the ones you don't ask). Contrast this approach to that of a wealthy guy I know, who has a strategy that he calls dumb smart.
In any form of financial negotiation, he doesn't try to impress the other party with how much he knows (which is generally always a lot more than the person he's talking to).
Instead he'll say things like: "Sorry, I just don't understand, can you explain this to me really simply?", "How does that work?", or "That's the worst that you could see happening?".
Doing this takes the pressure off him and puts it straight back on the other person. The more they talk, the greater the chance they'll say something stupid, and reveal the ace that they're trying to keep up their sleeve.
GAME: "I bought this house when I was 18, primarily for my mum. But at the moment I'm paying 3 1/2 times as much as I'd pay on a normal loan."
A finance company is seeking $1.3 million, costs and possession of Philippoussis' home for failing to pay his mortgage. He apparently didn't understand what he was getting into – and therefore he didn't see the serve that was coming full throttle his way.
I just signed on the dotted line and didn't read the fine print, said Scud.
Swing and a miss.
One of the key criteria that I have is by all means back yourself – go in, go hard – but never put at risk your family home. Especially if your mother lives there.
All this goes to show that a high income doesn't equal wealth.
While we marvel at how much celebrities like the Scud earn, we downplay our own earning capacity.
Statistics show that the average Aussie will earn about $4 million throughout their working life, so there's no excuse for ending up like The Poo, who now has to start again at the still young age of 32, having had "game, set and match" called on his estimated $10 million fortune.
Tread your own path!
