Credit Cards Make Top Models in Debt Until Bankrupt

Jakarta, Armfalcon.com – This story is actually not a new story, but it happened in 2019. It is Erin Heatherton, a top supermodel and ex-girlfriend of Leonardo DiCaprio. Heatherton fell into poverty due to credit card debt.

Now, Heatherton is engaged to a man named Karol Kocemba, and it seems her finances are starting to recover.

Many financial lessons can be drawn from the story of Heatherton’s bankruptcy. The point is that bankruptcy knows no profession and financial status, anyone can experience this.

The Victoria’s Secret supermodel is Leonardo DiCaprio’s ex-girlfriend in 2012. It is said that when she made love with a top actor of Leonardo’s caliber, Erin had a habit of being frugal.

However, their nature changes to be consumptive and often a waste of money.

The following are interesting facts about Erin Heatherton’s financial problems in 2019 taken from various sources.

1. Expenses exceed income

Australian news site News.com.au reported that Leonardo DiCaprio’s ex-girlfriend had debts of more than US$500,000 which in 2019 was equivalent to Rp.7.1 billion.

At that time, Heatherton only earned less than US$ 3,000 or Rp. 42 million a year.

It could be, the debt is caused by a glamorous lifestyle and makes him dark. In 2017, Erin had pocketed US$ 226 thousand or Rp. 3.2 billion (at that time) through her profession.

When his income rose, he became more consumptive. Instead of saving and investing, this beautiful model buys things she can’t afford.

Expenses that exceed income will result in negative net cash flow. Indirectly, this situation will reduce the value of your savings, and gradually your savings can be drained.

2. Have three credit cards

Just one credit card bill might make you dizzy, especially if there are three. Usually, one uses three credit cards to get a promo, but Heatheron seems to have other reasons.

In 2019, Leonardo DiCaprio’s ex-girlfriend was noted to have sizable debt at City National Bank. On his first credit card he had a bill in arrears of US$ 11,514 or Rp. 164 million (at that time), while on his second credit card he was charged US$ 194,602 or the equivalent of Rp. 2.7 billion (at that time)!

Meanwhile, the latest credit card bills amounted to US$ 215,601, aka Rp. 3 billion. Not to mention that there is additional debt from the same bank with a nominal value of US$ 201 thousand or Rp. 2.8 billion.

In financial planning, the ideal limit for a debt must be based on the total assets owned.

When the debt value exceeds 50% of the total asset value, then it is a sign that the debt has exceeded reasonable limits.

3. Claims for compensation from former business partners and tax debts

In 2019, apart from credit card debt, Heatherton also had to deal with claims for compensation from former business partners, which amounted to US$ 100 thousand or Rp. 1.4 billion (in 2019).

And unfortunately, he also has a tax debt of US$ 41 thousand or Rp. 584 million (in 2019).

Forced to sell assets

Selling assets is one way to pay off all the debt you have. Reportedly, all of his assets were sold out, one of which was Jennifer Meyer’s necklace for US$ 945 or Rp. 13 million.

Over time, this catwalk model has experienced a decline in terms of income. In 2017, he was indeed rich in twisting. But in 2018 to 2019, his income has decreased.

When it was still on the rise, money might not have been an issue for Erin Heatherton. But Heatherton is often reported to have held lavish and glamorous parties at her condo in New York, she has also been sued by her neighbors for disturbing the comfort.

Learning from Erin Heatherton, it’s actually not wrong to have a luxurious lifestyle as long as you can afford it, and be careful if you have a freelance profession, especially in the entertainment world.

Unstable income will require us to have a larger amount of emergency fund than other people, because one person can’t stay famous forever.

[Gambas:Video CNBC]

(aak/aak)