It’s tax time here in the United States, and I have money (or at least taxable income) on my mind. So I thought I’d do a post about something that comes up in K-Pop and elsewhere: Why do celebrities get all upset over amounts of money that the average person would be delighted to come across?
The answer that most people come up with is that celebrities are greedy entitled douchebags. While that can certainly be true, there are also very good reasons why celebrities want what sounds like a whole lot of money–and why the very same people calling them greedy would do the exact same thing in their shoes, no matter how generous and good-natured they might in fact be.
It basically boils down to two issues.
Issue #1: The pie can be really fucking big–you’re just not seeing it.
If you remember the thought exercise I did recently, I made a $2 million pie shrink down to $33,000–just like magic!
Yeah, this kind of magic happens all the time in the arts.
And not just the arts. When Marvin Miller was elected to take over the U.S. baseball player’s union in 1966, a third of the players were making less than $10,000 a year. A few decades later, the average salary is $4 million, and $100 million contracts are not unheard of.
Where did all that money come from? It was always there.
I mean, yeah, owners now have to squeeze baseball fans more because it’s not like that $4 million per player is going to come out of their pockets, but 1. they can–fans will pay, and 2. the owners certainly weren’t making no shitty $10,000 a year back in 1966.
So why do regular people wax rhapsodic about the good old days–you know, back before greed ruined the game of baseball (and players were basically serfs)?
For one thing, Americans don’t like to acknowledge how much we spend on amusing ourselves. The fact that a team can afford to pay lots of people seriously large chunks of change means that . . . you are making that possible, instead of living the simple life and donating any excess income to charity like any decent saint would. Hedonist!
But the bigger thing in my mind is that regular people have a general sense of how much money individuals have, and it’s not gazillions of dollars. Corporations have gazillions of dollars, but that’s to be expected, because they are these abstract faceless enterprises that employ many people, plus it’s not like a regular person owns one and says, “Hey, yours is bigger than mine!”
So people read that Stephanie Meyer made $21 million from May 2010 to May 2011, and they think that’s obscene (especially if they didn’t like Twilight much) because they can envision that that’s a shit-load of money for one person to have. But when her publisher reports that falling sales of her books led the company to make $160 million less in 2011 than in 2010, unless people are total finance weenies, they don’t think about how small a piece of the pie (probably less than 10%) Meyers got.
And then they don’t ask: Is it fair that she got pennies for every dollar that Twilight made?
Issue #2: Careers can be really fucking short.
Do you know who’s a millionaire in the United States? The average high-school dropout who works full-time.
Oh, I don’t mean they get a million dollars all at once–but over their lifetime, if they work full-time, the average high-school dropout can expect to earn $1 million. Finish college, and it’s $2 million!
Of course, we’re talking about estimates that rely on a person being in the workforce for 40 years.
The average professional baseball player has a career that spans 5.6 years–and that’s actually pretty long for a professional athlete. It’s also a little shorter than the life-span of the average ’90s boy band, but not by much.
Let’s say that you are a somewhat popular pop singer with a five-year career, and in your brief but relatively successful time in the spotlight you make–dundunduuuuunnnhhhh!!—a million dollars.
You started when you were 18, so now you’re 23. You’d rather not work a normal job (boooooring), but no one’s going to pay to see you on stage any more.
But you’re a millionaire!!! How hard can it be to live off your nest egg?
Your first plan is to spend it through! You’re 23, you’re thinking you’ll last until you’re 73, so that’s 50 years.
$1,000,000/50 = $20,000 a year
$20,000 a year!?!?! That’s fucking $10 an hour–you make that at Wal-Mart these days! This is not the glamorous existence you were expecting. Plus, what if you live until you’re 83? 93? What then?
OK, back to the drawing board–you’re going to invest. You’re going to sock that $1 million away into some solid, reliable blue-chip stocks that pay a dividend of 2-3% every year!
What’s 2-3% of $1,000,000? $20,000-$30,000 a year.
We can play this game forever, but the fact is that a million dollars is really not a lot of money for an entire lifetime. (Half a million, like what Luhan was supposedly making? No wonder he bailed.) And we’re assuming that when you were 18-23 years old–an age when most people are not exactly prone to making wise decisions–you didn’t spend your money. You didn’t buy your parents a house. You didn’t discover cocaine. You didn’t say, “I’m worth it.” You didn’t indulge at all.
Do you know how many NBA players file for bankruptcy within five years of retirement?