I’d add:
*putting family and friends on the payroll
*not diversifying your investments
*assuming your present income level will last indefinitely
But on a happier note, the dog invested wisely in real estate and security funds and died wealthy at the old age of sixteen.
Jesse Livermore was worth $3 million after the market crash of 1907 and lost it all. He regained his fortune and was worth $100 million dollars following the crash of 1929. He proceeded to lose 95% of that and killed himself in 1940.
Overspending, you say? Like the jet he bought but really never used, or all those jewelry and cars he bought more or less randomly to people he liked or just met; as when when he thought it was a good idea to buy a dozen Cadillacs and Lincons to his “friends” in the Denver Police Department. Back in Graceland his father Vernon – who handled his finances – was devastated and said to Elvis that he is going bankrupt, he must stop spending money like this. Elvis was sorry that daddy was sad, so he – true story – went to the Memphis car dealer and bought him a Cadillac to cheer him up.
And just the other night a friend told me that I was being extravagant by ordering the lemon bread pudding after dinner…
IIRC he bought a Cadillac for his mother with his first big check even though she couldn’t drive. (I don’t know if she learned or if he just threw in a driver.)
An interesting counterpoint to Elvis is Liberace, who per legend taught him about bling and flashy costumes. Liberace loved to give the impression he was living like Elvis in the 'Devil may care" reckless spending but in fact he always had an eye towards the business end. The costumes of course were bought because they drew crowds, the cars and other flashy items he used were all tax deductible as business expenses [he covered one Rolls in Rhinestone so it couldn’t be driven on the street and therefore was tax deductible] and while it’s true he owned mansions he rarely visited they were in fact an important part of his income: he bought mansions in LA, Palm Springs, Las Vegas and other places as short term rental property, leasing them to celebrities or rich business people who were only going to be in the area a few weeks and wanted to live in style while they did. He died extremely solvent.
Wasn’t Michael Jackson in dire financial straits just prior to his death?
This is just a wild guess, but I’d say that some figures like Michael Jackson left very complicated estates that will probably take years before it’s possible to figure out; Jackson’s estate is probably many times richer and more solvent now than when he was alive.
Both William Randolph Hearst and George Washington Vanderbilt II trapped their heirs in a similar way: Hearst built Hearst Castle (in addition to his many other monstrosities as mentioned above), which was the most expensive private home in the world, and Vanderbilt built Biltmore (perhaps the only sentence that can use the sound ‘bilt’ three times in succession without violating grammar rules), which was the largest private house in the world. Both required more upkeep than most college campuses and were total white elephants to the people who inherited them: the number of people with the capital to buy them would have been maybe 1% of 1% of 1% of the world and those who had it didn’t want to live in San Luis Obispo or Asheville, NC. In both cases the heirs ultimately turned the white elephant into a working beast by opening them to the public and making enough to not only support the places but turn a profit.
Brando left a similar white elephant to his heirs- a small chain of islands near Tahiti. He bought it specifically to keep it from development but sadly he left such a mess financially (due in large part to the millions he spent on his children’s legal problems) that it’s been leased by his heirs to developers. Elvis’s Graceland was a mansion but nowhere near the most lavish in existence or even in Memphis; its popularity as a tourist attraction came from the fame of its owner. I expect the Jackson estate to ultimately open Neverland, which in addition to being one of the most famous houses in entertainment is situated on thousands of acres that can be used to build hotels, restaurants, and other things catering to tourists.
Aw Sampiro, you missed my joke.
Why can’t I ever have a friend who does that when he’s miserable instead of drunk dialing me to share his lamentations?
No way in the world that they will get the permits to do this sort of thing in Santa Barbara County.
Saddam Hussein?
What’s even more WTF is he was moderatly well to do before he won the lottery. Makes me really never EVER want to play the lottery!
He is almost unknown today-he was the man who built GM…then lost it to his bankers. He bounced back, and founded a new car company (Durant Motors)-which crashed.At his peak, he was worth north of $2 billion (real money in the 1920’s).
At the time of his death, he was living in a room above a Flint, MI bowling alley-he was in his 80’s, but planning a nationwide chain of bowling alleys.
You have to admire a man like that-he didn’t care much about the trappings of riches-all he cared about was the chase.
I recall reading an essay by John Waters (I believe) regarding the auction of Liberace’s estate after his death; he was surprised at how chintzy most of the stuff was. Cheap low-end electronics, particleboard furniture, etc. It makes more sense now that I’ve read your take on it.
“Military service” really under-describes the extent of the service Sir Henry got. He was given the biggest funeral Toronto had ever seen thanks to his enduring popularity with the men of the Queen’s Own Rifles (Pellatt’s regiment). Thousands of people lined the streets for the procession and he was buried with full military honors and a whole lot of pageantry. (Pic.)
His power generation empire and his aircraft manufacturing company had been transferred to the government for the war effort without any compensation to Pellatt or his business partners at all. To make up for the enormous losses, he tried to go into real estate, but his deals ended up being crap.
He ended up living with one of his chauffeurs.
But he was extremely popular with the QOR, understandably, since for the regiments 50tha anniversary, he paid to ship the entire 600-man regiment and all their horses from Canada to England for training. So them men are the ones who collected enough dough to pay for the funeral.
From what I gathered, he was in the “sell back his assets” phase–not really broke.
http://www.fool.com/news/foth/2002/foth020909.htm Here is a list of entertainers who thought it would never end. From Billy Joel to MCHammer.
Part of the problem is they don’t know finances. They trust someone who rips them off.That is what an adviser would tell you to do , but some are not wise enough to track their assets until it is too late.