How Rebecca Black Can Stay Rich

BOSTON (TheStreet) -- Hollywood legend claims that aspiring actress Lana Turner was discovered at a drugstore soda fountain. Today, stars -- even if we use the term loosely -- are born, and implode, with a flurry of global mouse clicks.

Andy Warhol was right with his quip about everyone getting their crack at 15 minutes of fame. Fame may ultimately be fleeting on the Internet, but with Facebook and YouTube, "stars" can be made in record time. That rapid rise to fame, and the extra cash that goes along with it, can produce financial disasters.

Tila Tequila and Perez Hilton are nearly household names. The "Tron Guy" was a semi-regular on the Jimmy Kimmel Show. We all know that guy at work who imitates the "Leave Britney Alone" guy and the "double rainbow" dude" or hums "Chocolate Rain" while standing at the water cooler. Our relatives forward arguing twins and "Charlie Bit My Finger". Charlie Sheen, an actual celebrity, is now reinventing himself as a walking, talking Internet meme.

With celebrity status, no matter how instant or ironic it may be, there are financial opportunities -- paid endorsements and appearances, cashing in on Web traffic, selling songs and videos.

Antoine Dodson was an unknown hairdresser until an attempted home invasion and his over-the-top declarations to a TV news crew were auto-tuned into a surreal yet catchy hip-hop hit. Today, he is paid for appearances, is a regular on TV and sells catch-phrase-emblazoned merchandise on his Web site.

Two months ago, did the name Rebecca Black mean anything to you? What about now, after her mom paid $2,000 (plus another $2,000 to own the master recording, though rights to the song are amid a legal dispute) to a company called Ark Music Factory to write and produce a song and video. That tune, "Friday", lampooned for its banal lyrics and auto-tuned aural assault, is a viral phenomenon.

Black's video has reached nearly 102 million hits on YouTube as of this writing. She's appeared on the Tonight Show and is rumored to be in talks for a recording contract (perhaps not as big a deal as it sounds -- after all, even American Idol's William Hung had one). Yes, there has been some vicious online mockery and bullying (even death threats, her mom claims). But if the Blacks play their cards right, the young songbird will have some extra cash tucked aside for college.

Forbes magazine estimated that Black may have already become a millionaire off her infamy. Its guesstimate is based on Google's ( GOOG) Partner Program, which gives artists a percentage of advertising proceeds from traffic they generate, and the share that every sale made off Apple's ( AAPL) iTunes nets (up to 69 cents for the "label," which in this case would be the Blacks).

There is a hazard, however, for insta-phenoms. Even well-established celebrities -- think Wesley Snipes, Willie Nelson and Nic Cage -- can find themselves in financial hot water, taken advantage of by family and alleged friends, steered toward bad investments and discovering to their shock that the books are cooked, investments tanked, cash was skimmed and taxes went unpaid.

Wealth advisor Rob Russell, president of Ohio-based >Russell & Co., compares sudden fame to a winning lottery ticket or inheritance. Recently, he took on a client who inherited $30 million. A colleague faced a similar situation when a client discovered an oil reserve beneath his property.

"The first thought is, 'What am I going to buy?'" Russell says. "They are already picking out the purple Lamborghini. I can appreciate that when they're coming into that kind of money, but it can lead you down the wrong path. Look at how many 'millionaires' who won the lottery ended up poor, their life destroyed."

His warning to shooting-star celebs is that their newfound cash can be easy come, easy go. Steps need to be made to protect and preserve a windfall.

"The first step is to find the right wealth advisor, somebody who has experience dealing with these issues, because all of a sudden your estate goes from simple to complex overnight," he says. "What a wealth advisor can do is tie you into the right attorney, legal team, tax team and CPAs to make sure there is a coordinated effort. Things are going to get real complex overnight, from every perspective you can think of."

Russell says it is important for the newly wealthy to think both about how they plan to spend and save their money.

He suggests setting aside money "for when, all of a sudden, you are unpopular tomorrow or the wealth disappears."

"You have that investment lock box you can get into later to give you retirement income, a rainy day fund and that sort of thing," he says. "You want something that is going to be principal-protected and more guaranteed."

As wealth increases, the complexity of managing money does as well. Russell says mainstream investors, typically focused on stocks and bonds, need to be prepared for more diversified strategies, like private equity and private debt.

When choosing a wealth advisor, he advises against "using all your ammo at once" by giving them your total assets. Invest a small amount with them at first and increase the amount as you grow more confident and comfortable with their efforts.

If you got rick quick, you run the risk of being attracted to get-rich-quick schemes and there will be no shortage of unscrupulous solicitations to fend off. Hardest of all, he says, will be learning to critically assess the advice of those closest to you.

"Even friends and family members with good intentions can offer bad advice," he says. "People often make all the wrong choices based on the right reasons, trusting their high school coach or their classmate or somebody in their family. But they are simply not trained. They may have all the right intentions, but they start heading down the wrong road in terms of investment product or strategy. They are trusting a family member, but it can be the wrong thing to do."

--Written by Joe Mont in Boston.

>To contact the writer of this article, click here: Joe Mont.

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