Back in the ’80s and ’90s, some of Hollywood’s biggest stars seemed to have it all: beauty, big money and the adoration of millions.
But thanks to a string of bad investments, drug addiction and extravagant spending, many once-wealthy actors and entertainers — including, most recently, 1988 Olympic bronze-medal-winning figure skater Debi Thomas — now find themselves virtually homeless and penniless.
“At the very peak I was making about $1.6 million a year,” former “Eight Is Enough” and “Charles In Charge” star Willie Aames told TheWrap. But after his accountant suggested investing his money in a bad coalmine deal, Aames found himself owing a whopping $400,000 to the IRS. “When my house went into foreclosure, that’s when it was really devastating for me because I lost everything.”
The teen heartthrob, who once had an entourage that included an agent, manager, publicist and accountant at his beck and call, was all of a sudden living on the streets.
“When I was at my lowest, I had no phone, no computer, no car, and $5 in my pocket,” Aames said. “I remember laying underneath the bushes thinking, ‘Is this how my life turns out?'”
Stories like Aames’ are not that uncommon. In fact, Hollywood Boulevard is littered with former stars down on their luck.
After starring in “The Cosby Show” spinoff, “A Different World” alongside Lisa Bonet in the late 80s, comedian David Adkins — known by his stage name Sinbad — ended up filing for bankruptcy not once but twice.
“Baywatch” bombshell Pamela Anderson owed so much money to the IRS she was forced sell her Malibu home and declare bankruptcy.
After a long struggle with drug addiction, ’80s star Leif Garrett also filed for bankruptcy and famously relied on a $1,000 a month allowance from his mother.
More recently Nicole Eggert, another “Baywatch” star, was forced to sell her Los Angeles home for $1.15 million to cover mounting bills. In June, the IRS accused “Little House on the Prairie” star Melissa Gilbert of failing to pay more than $360,000 in federal income taxes.
And Thomas, the Olympic skater who went on to become an orthopedic surgeon, filed for bankruptcy in 2014 after a costly second divorce. On Saturday, she revealed to Iyanla Vanzant on OWN’s “Fix My Life” that she lives in a bed-bug-infested trailer home with her fiancé, James Looney.
“It definitely seems like an epidemic,” said Samuel Rad, a Beverly Hills-based financial adviser to the stars. “They don’t know how to manage their money. All they’re thinking about is their present situation.”
Formerly cash-flush actors who suddenly in financial straits is a story as old as Hollywood itself. But experts say there are a number of factors that make it particularly prevalent among stars of the ’80s and ’90s.
“The ’80s and ’90s were the glorious era of Bill Clinton: no deficits, world peace, low interest rates, oil prices were down, entertainment was actually becoming more prevalent thanks to new media formats like CDs and DVDs,” Rad said. “The economy was so dynamic and positive, it seemed like whatever money you spent you’d just remake it.”
Another reason, according to experts, is the lack of financial awareness among rising stars at the time. While today’s actors are typically advised to hire professionals as soon as they come into large sums of cash, that wasn’t always the case decades ago.
“When you get [a big contract] everybody comes out of the woodwork saying, ‘Oh we can do this, we can do that,'” said Roger Paul, a veteran talent agent whose clients include “Diff’rent Stokes” star Todd Bridges and “Saved By the Bell” alum Dustin Diamond. “They’re promised the world and when you’re first new to it you believe it.”
Bridges, who played the lovable Willis Jackson during eight seasons of “Diff’rent Strokes,” made a reported $15,000 – $30,000 a week for being on the receiving end of Gary Coleman’s, “Whatchu talkin’ bout, Willis?” But he lost nearly all of his earnings after battling drug addiction.
When Bridges filed for divorce from longtime wife Dori in 2013, documents revealed he was barely making $22,500 a year. Bridges has since managed to bounce back, according to his agent, signing a contract with a Las Vegas game show and working on the film adaptation of his autobiography, “Killing Willis.”
Bridges’ co-stars also experienced similar problems.
Coleman, who died of a traumatic brain injury in 2010 after falling down the stairs at his home, was once the highest-paid actor on television but declared bankruptcy in 1999.
Dana Plato, who played his adoptive sister Kimberly Drummond, died of an overdose at age 34 after years of struggling with poverty and substance abuse.
The list goes on and on.
Despite his enormous success playing George Jefferson in “All in the Family” and its spin-off “The Jeffersons,” the late Sherman Hemsley filed for Chapter 13 in June 1999; and ’80s teen heartthrob Corey Haim died from an apparent accidental drug overdose in 2010. Haim had filed for Chapter 11 bankruptcy protection in 1997, listing debts and more than $200,000 in state and federal taxes. His long-time friend, Corey Feldman, told Larry King at the time that Haim was so poor, he didn’t even own a car.
While drugs and lavish spending accounts for some of these bankruptcy issues, in others, like Aames’, it was a matter of simply not knowing how to manage finances.
“There are so many things you just don’t count on,” Aames said. “You can be on a hit show and suddenly you have a writers’ strike and you’re out of work. But your bills are the same.”
Aames’ story has a happyish ending. After struggling to get back on his feet, he decided to become a financial adviser. Aames said he made it his life’s mission to make sure “others don’t have to go through what I went through.”
“You need to understand how interest compounds because, hey, it darn near killed me,” Aames said. “You need to understand about gross and net, you need understand how to create a budget. There’s only one way to get past this nightmare and that is to learn something that you can pass on and learn what it was that killed you.”