Chuck Jaffe: Justin Bieber is no financial role model
BY CHARLES JAFFE Market Watch
Wednesday, January 16, 2013
1/16/13 at 3:15 AM
First, Justin Bieber was named "Best Celebrity Financial Strategist" of 2012.
Then came the announcement that Bieber was promoting a prepaid debit card in partnership with BillMyParents.com, which claims to advocate responsible teen spending habits, and that he would use his social-media power of 48 million Facebook fans and 30 million Twitter followers to advertise it.
Baby, baby, baby oooh.
It's not the first or worst case of a celebrity endorsing a financial product, but it illustrates the disconnect between fame and financial acumen as well as any. And although these deals are increasingly common, the hope is that the public recognizes that celebrities are not financial role models.
Sure, Justin Bieber has a net worth of more than $110 million, according to most sources, having grossed about that much in the past two years alone, and GoBankingRates.com gave him its "best strategist" prize on the basis of shallow analysis of his published comments and visible habits. But the truth is that though Bieber is known for being in touch with his fan base, he could not be more removed financially from the world of the kids the card is targeting.
This is not some celebrity hyping fashion or their latest haircut. Pre-paid debit cards are about spending and saving money, and for teenagers they can teach valuable lessons about developing good money habits.
But the young crooner isn't your typical teen on that front. In fact, Bieber needs a pre-paid debit card like a moose needs a hat rack. The sponsor of the card, after all, is BillMyParents.com - something Bieber probably hasn't done since puberty.
To borrow from F. Scott Fitzgerald: "Let me tell you about the very rich. They are different from you and me."
In spite of all of his efforts to interact with his fan base, here's how different Bieber is from his Facebook and Twitter followers:
At more than $50 million a year in income, a $250,000 house would make less impact on his finances than the cost of two tickets to one of his concerts would to the median American, whose income is just over $26,000.
According to a variety of helpful sites that calculate the feels-like effect, dropping a quarter-mil would feel to Bieber like the median American feels when spending about $130.
Make Bieber a bit more like the teenager he is, and consider that to him, buying a $425 smartphone would feel like spending two bits, and a top-of-the-line laptop would seem to him like, maybe, 50 cents.
That, by itself, doesn't make his debit card a bad deal. In fact, compared to others - and especially bad deals like the short-lived Kardashian Kard - terms on the Bieber pre-paid debt card aren't too bad.
There's the very real potential for Bieber's card to be gone soon, which would be good for the world but not great for anyone who plunks down cash to get involved. Bieber's buddy Usher had a prepaid MasterCard deal and some gift-card promotions with Visa that have all vaporized; the Kardashian Kard was killed off once those publicity hogs realized they were aiding and abetting a consumer rip-off; and cards from Russell Simmons, Magic Johnson and others have all fizzled.
The real problem is that these cards send the wrong message. The celebrity tie-in encourages kids to pull out the card and use it as much as possible so that they can show it off.
Consumers need to see through celebrity for what's happening behind it. With prepaid cards, banks feeling the financial pinch elsewhere know they can squeeze out healthy margins in a business expected to surpass $100 billion this year.
Plain and simple, if you allow celebrity to influence your personal financial decisions, you're being a patsy for the banks and institutions. That knowledge should have you singing Bieber's tune, without ever falling for his card.
Baby, baby, baby nooo.
Original Print Headline: Justin Bieber is no financial role model
Chuck Jaffe, senior columnist for MarketWatch, can be reached at cjaffe@marketwatch.com or at Box 70, Cohasset, MA 02025-0070.
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