I read that when Michael Jackson died, he was $500 million in debt. How does someone get into that kind of debt?

Question

I read that when Michael Jackson died, he was $500 million in debt. How does someone get into that kind of debt?

In: Economics

Answer 1

Generally not by buying things, but by borrowing money for services or taking on obligations with recurring costs.

Example: You have a super yacht. It can easily cost $2-3m annually for staff/maintenance/etc.

Now add in a private plane. Now several mansions. All of these things have a staff, and huge ongoing expenses.

Now take care of Friends and Family.

It adds up quickly