Rihanna-performing-live

 

After a long battle against a former financial advisor, the courts have reached a favorable decision in Rihanna’s $35 million lawsuit.

 

Rihanna was awarded a judgement of $10 million, which both parties agreed upon. She originally sued Peter Gounis, of Berdon LLP, for millions she’d loss in failed ventures suggested by the accountant. Remember, in 2009, the pop singer announced that she was “effectively broke”. She also fired Mr. Gounis.

 

Rihanna claimed that in January 2009 she had $11 million. By December 2009, she had only $2 million left. Mr. Gounis, during that year, OK’d several large purchases such as the $7.5 million mansion in Beverly Hills, which later turned out to be a dud. The home was ridden with water leakage problems. Rihanna spent over $1 million in home repairs until finally deciding to sell it, which caused her a $2 million loss.

 

The court documents read: “Mr. Gounis was fully appraised of Ms. Fenty’s financial condition, yet, nonetheless, failed to advise her that the purchase would be unwise.” (Source: LatinaPost.com)

 

Rih Rih’s legal squad added that Berdon LLP also advised her (via email) to make the purchase(s) knowing that she was experiencing financial difficulties. The accounting firm also failed to warn her about a worldwide tour that was failing. The ticket sales were not turning over as forecast and the firm failed to warn her before the tour ended. She lost millions because of this as well.

 

Peter Gounis’s argument was that Rihanna’s frivilous spending on designer clothing and jewelry was the real reason why her millions faded away.

 

Although Rihanna won this case, this should be a lesson to anyone who hire someone to manage their finances.

 

When soliciting and securing financial services from a firm or individual, always be willing to take a second look at your money at all times. Most firms and advisors are scheduled to give you a full financial report once a month or each quarter (or as often as you specify). This gives you the opportunity to review your assets against your liabilities, determine if there’s money available for major purchases or investments, etc. Mr. Gounis, in this instance, should not have approved the purchase of that $7.5 million mansion. Rihanna only had $11 million in the account. So, why would anyone tell their client to spend over half of their entire savings?  This should have been a red flag for Rihanna.

 

But like a lot of celebrities and athletes, many do not know how to manage a large amount of money. From once being poor to one day becoming a multi-millionaire, this can be very scary and mentally overwhelming. And when you are not educated on how to properly manage your finances, you will be more prone to throwing it away.

 

In her case, Rihanna trusted the wrong people. This brings us to another point: don’t be afraid to fire people when they are not doing their job!  There’s nothing wrong with that. Just because a colleague referred their services, you don’t have to put up with their poor job. So, fire them quickly and look for a reputable accountant. Try several accountants if you have to. And in some cases, hold them accountable for any significant losses (i.e. insurance, earned value milestones, etc).

 

The key is to be proactive, not reactive. If you can prevent a loss from happening by just being prepared and aware, then stay on your sh*t at all times, make sure your accountant is doing their job, and keep your eyes on your money.

 

 

Photo Source: UrbanIslandz.com