When you read about Hollywood, where red carpets and big movie premieres are always in the news, it's easy to think that every actor is as rich as Scrooge McDuck. The 2018 reshoot scandal for All the Money in the World is well known.

Mark Wahlberg got $1.5 million for ten days of work, while Michelle Williams, who played his co-star, only got $1,000 for the same amount of work. People care about and get mad about how much celebrities make because of stories like this. But there are a lot of lies behind the shocking numbers that make it hard to understand how stars really make money. This article looks at the most common myths about Tinseltown's economy and uses information from the industry and recent data to do so.

Myth 1: Every star in Hollywood is a millionaire

Many people believe that people with a SAG-AFTRA card can drink champagne on private yachts and never have to work again. What is the truth? Most actors don't have a lot of money. They are working-class professionals who are making ends meet in a gig economy that isn't very stable.

The U.S. Bureau of Labor Statistics says that actors in California, where Hollywood is, made an average of $27.73 an hour in 2022. But that's not the whole story: Actors don't always get paid or get paid all year. About 12.7% of the 160,000 members of SAG-AFTRA make enough money to get the union's health insurance, which costs at least $26,470 a year. For instance, working on a TV show for a week might pay at least $3,756 before taxes, which isn't enough to buy a mansion or a Maserati.

According to CNN, during the 2023 actors' strike, SAG-AFTRA president Fran Drescher said it clearly: "Most members are working people just trying to make a living." Dwayne "The Rock" Johnson made $270 million in 2022, but not many other people did. A lot of the others work part-time jobs, like driving for Uber or waiting tables. This shows that being famous doesn't always mean having a lot of money.

Myth 2: The stars you read about are very rich.

Headlines scream "20 million dollars per movie!" but that's not usually what an actor gets paid. As per CNN, the Hollywood math is the fees, deductions, and taxes that can cut a paycheck in half. Agents usually get 10%, managers get 15%, and lawyers get 5%. This means that stars only get about 70% of their money before the government takes its share.

If you make more than $1 million, you have to pay up to 37% in federal taxes and 13.3% in California state taxes. If you work on TV for $3,756 a week, you might only get about $2,000 after taxes and fees. In Los Angeles, that's not enough to pay rent.

Also, the payment isn't always made right away. Vanity Fair noted that a lot of deals have "frontend" quotes (the base salary) and "backend" points (a share of profits) that only pay out if the project goes well. What are residuals from streaming? A lot of the time, pennies.

One actor said that Netflix and other sites like it only paid them 13 cents for each time they played a movie. The picture looks more expensive than it is because the myth doesn't include these layers.

Myth 3: It's not true that online estimates of net worth are accurate.

Have you ever checked the net worth of a famous person and found that they were worth a cool $100 million? In these results, CelebrityNetWorth.com (CNW) and other sites like it come up first, but their numbers are often just guesses or outright lies.

According to New York Times, CNW says it uses a "proprietary algorithm" to process information from headlines, real estate deals, and auctions, but investigations show that this technology doesn't exist; it's mostly guesswork by founder Brian Warner.

When people saw actor Geoffrey Owens bagging groceries in 2018, CNW cut his value from $500,000 to $300,000 overnight. This shows how subjective the changes were. Cynthia Nixon said in a political debate that the $60 million she was said to have was "not true... You can't trust Google."

Because the media spreads these estimates without checking them, people think they are more accurate than they really are.

Lindsay Lohan's career is at its lowest point, but she's still worth $800,000? At best, it's not clear. The big secret is that only a few people who are close to a star really know how much money they have, so these numbers are more like stories than facts.

Myth 4: Actors only get a set amount of money, so what you see is what they get.

Don't just think about getting a paycheck. Hollywood pay is made up of a lot of different things, like "quotes," "points," "bumps," and "perks." These things can make or break someone's pay, depending on how well they negotiate.

A "quote" is the base pay for an actor, and agents try to get their clients more money based on how well they did in the past.

Stars like Will Smith can make an extra $5 million at the box office by adding "points" to the backend, which are percentages of the film's profit pool. When benefits like private jets and assistants are taken away, "bumps" happen, which can add $200,000 to the quote. Using perks like four-star hotels and $2 million in extras can help you get a better deal.

In the past, stars like Marilyn Monroe made a set amount of money each week ($1,500). Now, anyone can make money by working in the studio. Is this the wrong thing to do? It doesn't take into account how these extras are affected by demand and power. That's why A-list stars like Tom Cruise get $100 million deals while others only get the union minimum.

Myth 5: There is no pay gap between men and women in Hollywood; everyone is the same now.

Even though things are getting better, the idea that pay equity has been reached is not true. Women often get lower quotes at first because of past biases, which keeps the gaps going.
For American Hustle, Amy Adams and Jennifer Lawrence each got 7% of the backend points. Nine percent of the money went to men:

Bradley Cooper, Christian Bale, and Jeremy Renner. The Wahlberg-Williams reshoot gap showed how past earnings affect quotes, which hurts women who have been underpaid in the past.

Emma Stone said that some of the men she works with have lowered their pay to match hers. This raises her quote: "That changes my quote for the future and my life."

In California, it is against the law to ask someone about their salary history. This law went into effect in 2018. This is meant to break the cycle, but there are still holes in the #MeToo movement. The myth doesn't take into account systemic problems, like how women don't get as many leading roles or how negotiations aren't fair.

Myth 6: Actors don't have to save money or plan for retirement like other people do.

Actors have money problems because they don't always get paid. They think that normal rules about money don't apply to them or that they will fail.

The myth is false: Cash flow systems are better than strict budgets because strict budgets don't work for people who are creative. They pay bills automatically and make up for months when they don't make much money by making up for months when they do. What will happen when you retire? Not just for people who work from 9 to 5.

According to Casting Networks, actors can put money into IRAs or solo 401(k)s at different times. Even $20 a month can add up over time. And what about the bank's fees? You can avoid this by switching to online banks that don't charge fees and pay interest.

A financial expert tells actors, "You're not bad with money just because you can't make a budget work." That just means you don't know how to manage your money well. A lot of stars, like Sydney Sweeney and others who are having money problems, show that planning is important in this business that goes from feast to famine.

The Real Star Power: Value in a Market That Is Hard

In the end, Hollywood salaries are a good example of how the market works: The biggest stars make a lot of money because they bring in a lot of people, which makes billions of dollars. But there are thousands of people who work hard but don't get noticed, just like Cruise or Johnson.

People can feel more empathy than jealousy if they know these myths. This is especially true now that streaming and strikes are problems in the industry. When you see a headline that says "mega-payday," keep in mind that it might not be as easy or as fun as it sounds.

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Hollywood Celebrities