19 Former Millionaires Reveal Shocking Mistakes That Cost Them Everything
Making payroll during a pandemic has put a dent in my net worth. Haven’t laid off a single employee or cut benefits.
Friend of mine is a direct decedent of a super rich Spanish noble from Madrid. Essentially, this guy made so much money, nobody in the family needed to work for over a century. But because nobody worked, there was no money added to the family fortune, and it slowly dwindled away. His dad got the last of it and used it to get a degree from a good university and is doing really well for himself.
Not me, my mom.
My grandfather died and left everything to my mom.
My father died and left everything to my mom.
Mom always thought she was a smart gambler that would win – and as proof she won something like $25,000 in the lottery once and went out and bought a car. That just got her hooked… good.
When dad was alive, he didn’t let her gamble – he kept it under control.
After dad died, mom found a boyfriend. A former bookie who was a professional gambler. They used to like going to the Indian casinos where they subsequently squandered every single penny and more as my sister told me that mom, after selling the big house for another half million bucks and buying a small little condo – has now taken out a home improvement loan against the condo for $50,000.00 – no improvements were ever made.
Casinos and lottery tickets. A cool million or two gone.
My dad, not me. He made some really shrewd stock market investments after he retired. They were options on an oil refiner at a time when the USA had a real shortage of them. My dad had done a lot of research on this and studied the situation carefully. He got rich to the tune of maybe $2 million. He could have been set for life. My dad was already a really smart guy. He has a PhD in mathematics and was a highly respected big-brain professional all the way back into the 1960s. However, he thought this took him to the next level. He bought a lot of newer options in the same company. I suggested to him that he diversify, put a bunch of money into something closer to an annuity or another conservative investment that would give him plenty of income forever. I told him if he did that, he would always be rich. Well, he is pretty far from that now. I haven’t said a thing about that to him since he lost everything. I did what I could, at the time, to save him from himself. But who was I? It pains me to see how it played out for him. He did a lot of things right in life. He deserved better, but there’s no “deserve” in securities investing. Morals of this story:
1. You aren’t an investment genius after your first blockbuster win. You need a track record.
2. Diversify.
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