Red Tail

KANDAHAR, Afghanistan (AP) — Sitting on a dirty straw mat on the parched ground of southern Afghanistan, Masooma sank deeper inside a giant black shawl. Hidden from view, her words burst forth as she told her side of what happened to her family sometime before dawn on March 11, 2012.

Lindsay Lohan, Nicolas Cage, Pamela Anderson, Kim Basinger and Dionne Warwick have more in common than just a star on the Hollywood walk of fame. They're all part of the riches to rags club—celebrities that have managed to go from millions in the bank to flat broke—and OKMagazine.com has the rundown on what's behind stars' falls from financial grace. Lindsay Lohan's many legal woes, stints in rehab and outstanding IRS debts have left her financially in the hole It seems hard to believe that one day you can have a fortune, and the next day nothing, but it's happened to a multitude of actors, actresses, singers and athletes Media finance expert, Mandy Calder, weighs in on the subject, explaining how it's possible to go from big bank to bankrupt.. literally overnight. OK! News: Find Out What the Real Housewives Get Paid "It's a combination of several factors," Calder tells OKMagazine.com. "Mismanagement plays a huge role, along with overspending, poor financial planning and an inability to believe one day you may no longer be commanding the huge salary you currently are, that you'll no longer be a star. "A lot of celebrities believe their own hype—believe they are more talented than anyone else and that they will be top of their game and in demand for the rest of their lives. Both Pamela Anderson and Nicolas Cage have managed to blow through fortunes, forcing them to file for bankruptcy "Big mistake! For probably ninety-five percent of celebs that just isn't the case. You're going to shine bright and earn the big bucks for a relatively short period then you're likely to have a career, and demand lull, and your earnings are going to suffer accordingly. "A lot of celebrities believe they're never not going to be a star, they start living the lifestyle—private jets, huge homes, entourages, crazy shopping sprees, champagne, parties, the A-list life—and in a way, they kind of have to live that lifestyle to be seen as being a star.  RIHANNA AND CHRIS BROWN SPOTTED TOGETHER AT JAY-Z CONCERT "I mean, if you're just shopping in Walmart no-one's really going to be interested, you've got to be seen to be buying the right things and going to the right places because that increases your star value…which in theory means you will earn you more money in the future. "But, when the big paydays dry up and you're still living that life, you're in major trouble. Stephen Baldwin filed for bankruptcy in 2009, his ex-sister-in-law, Kim Basinger, filed in 1993 "What happens quite often, particularly I think with music stars, is they're often a big huge success then it tails off very quickly, because the industry is very fashion orientated—they're like one hit wonders or something— then, they don't have any income coming in anymore. "So, having committed themselves to living the A-list lifestyle they no longer have any money to support it. A lot of stars just don't realize they have a very limited shelf life." Watch: One Hit Wonder Girl Songs from the 2000s Another major financial pitfall is the dreaded tax bill. "The classic way stars go broke is from tax demands," Calder says. "They don't put any money aside for their tax bill and that's what the majority of them end up being bankrupt by….they haven't put aside for their taxes and when the time comes around they've spent all their money and they have nothing else coming in and they have no money to pay up. "With musicians as well, they often get a record advance—a large lump sum. They sign up for record deal, get a lump sum in advance, but again what they don't appreciate is that not only do they have to pay tax on that, but there's no more income until that advance has been recouped. Teen idol Corey Haim was 'broke and destitute' when he died at age 38 in 2010 "So, say they get half a million dollars in advance, there's no more income until they've sold probably 3 - 4 million dollars worth of records because, obviously, off that comes management fees, marketing, advertising, expenses and they have to recoup the advance sum, so chances are they're not going to see any more income for two or three years after their initial advance, and they're limited in what they can do to earn money elsewhere as they are signed to a contract.  "Some of them, that's their only hit anyway.. so they don't earn any more income period." Kelly Rutherford Files For Bankruptcy After Bitter Custody Battle Leaves Her Broke Another issue is that many stars just have no interest in the whole financial side of their business, and although they enjoy earning and spending the money, they have no interest in keeping track of their finances—often placing blind trust in their management team to do so on their behalf—leaving them open to opportunists taking advantage of them. "Elton John is a prime example of a star being taken advantage of," Calder explains. "He actually took his former manager of 23 years, who was also his ex-boyfriend, to court to try and recoup the millions of dollars he claims were mismanaged by him. Anna Nicole Smith was forced to declare bankruptcy in 1996, Dionne Warwick filed earlier this year "Elton John discovered he had a $20m hole in his finances and had no idea what his money was being spent on! During court proceedings there was a shocking run down on Elton's overspending and mismanagement of his finances—he was actually paying more than $75,000 a month in interest payments to the bank, despite him having a net worth in the mega-millions. "Elton famously wouldn't look at his accounts himself, and when his accountant handed them to him he would just rip them up..he just wasn't interested in the accounting side at all.  OK! GALLERY: NEIL PATRICK HARRIS, DAVID BURTKA, ELTON JOHN & DAVID FURNISH HIT UP ST. TROPEZ WITH THEIR KIDS "In court, the defense said to Elton, 'well you must of known what was being spent on what' but he didn't, he didn't have a clue!  "For instance it came out that he had blown through $60 million in a 20 month period—$455,000 in one year on flowers alone—and Elton had no clue! "Luckily for Elton John his fortune is so great, and he continues to earn the big bucks, so it didn't ruin him, but a lot of smaller range stars aren't so lucky." When Elton John took his ex-manager to court for mishandling his finances it was discovered he had blown through $60 million in 20 months! For amazing tales of riches to rags, with breakdowns of where the money went check back with OKMagazine.com over the next week as we breakdown how individual stars went from bank to broke….  Who blew a fortune on shrunken heads? Had nine Rolls Royces in his collection? Owned several castles around the world, and a menagerie of exotic animals? Find out Friday on OKMagaine.com! Do you have any sympathy for stars who go broke? Sound off in comments below and tweet us @OKMagazine   Photo credit:  Splash News