Formerly Wealthy People Are Revealing The Ways They Lost Millions, And Some Of Them Genuinely Shocked Me
Redditor u/HypnoticMushrooms asked, "Ex-Millionaires of Reddit, what made you lose all your money?" Here are 17 tales of how it all went down:
Submissions have also been sourced from this similar thread.
1."My ex had a friend who inherited a million dollars in cash and near-cash assets when his only parent died and he was 20 years old. Now, you aren't just going to retire at 20 on a million bucks, but it's a great way to pay for college, maybe buy a car and a down payment on a house, and save/invest the rest. Basically, it's a really good way to start your adult life and nearly ensure you'll be quite wealthy in your later years. Did he do any of that? Nope. Bought himself a ridiculous luxury car, bought cars for his friends, bought wardrobes of designer clothes, threw huge parties repeatedly, etc. He ended up broke in two or three years and went back to waiting tables to make rent. Sad to see."
2."A friend of mine is a direct descendent 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."
NBC
3."My dad is an ex-millionaire. He's a fucking wizard at starting successful businesses, but his problem is he can't let them go. He's the boss/owner who never hires a manager that's not family, because he just doesn't trust anyone else to run it. He drove three, million-dollar companies into the ground because he couldn't keep up with his own success, and refused to hire people to do it for him."
"He started with a pizza place. He acquired, like, three locations before it swamped on him and he had to sell to cover his debts. From there he owned some rental properties. They took off, but as he expanded, he wasn't able to keep up with maintenance because he was trying to do most of it himself. The buildings fell into disrepair and eventually, he had to sell them because he couldn't afford the repairs that were necessary.
Finally, he started arguably his most successful business — a driving school. He got to five locations, and to this day basically, anyone in my state over the age of 40 was taught to drive by him or at one of his schools. He hired my mom to help him run things because his books were a mess. They had an affair (this is where I come in!). When my parents broke up, my mom left the business and my dad never hired anyone to fill her spot. Fast forward five years and he had to sell yet again just to cover his losses. He ended up getting hired at a local company as a manager and worked there until he retired."
4."My wife's aunt used to be rich. She was married to a brain surgeon who was also on the board of directors for all the local hospitals, so he was pulling down two checks. She was a platinum member of a local casino and would send us and other family members coupons for all-inclusive weekend visits. You literally did not need to bring any money for anything — all food, drink, gratuity, etc. were all taken care of. Anyway, her husband had his medical license revoked for writing too many scripts for pain killers to her and other people, and they both now live in Mexico somewhere."
5."My parents had built up a multi-million dollar company over a couple decades before and during my early childhood. Around 2006, they separated and ran each other dry in court. Then, the financial crash came and bankrupted both of them. They lost everything they put years into. However, after my mother’s parents passed away, she was able to take a portion of an investment account that built millions from her father's stock from working in the railroad industry. My father rebuilt his business from scratch, repaired his credit, and his business is bigger than it ever was before. By the age of 21, I'd witnessed my life go from rich to broke to wealthy again. I am in a great position in life now for my age, but I've learned to work, plan, and live like everything could be again gone in the blink of an eye."
6."My dad 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. He had done a lot of research on this and studied the situation carefully. He got rich to the tune of maybe $2 million. My dad was already a really smart guy — he had 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 that he diversify, maybe 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 'deserved' in securities investing. Morals of this story: 1) You aren't an investment genius after your first blockbuster win. You need a track record. And 2) Always diversify."
7."My first husband was making a million dollars a year. He was enjoying life. He spent frivolously but brought in enough money that it didn’t matter. We divorced, but amicably — no alimony, no ‘child support,' he just paid for whatever the kids needed. Then, he got leukemia. He fought like hell for three years. The last two years were very expensive but was worth it. Money won’t make you happy, but the lack of it can destroy you. The kids and I can take comfort in knowing that truly, there was nothing else possible. His millions bought his kids two more years of dad, and I’m glad that he enjoyed his life while he could."
CBS
8."I have a relative who is a self-made millionaire many times over. He was the hardest working person I've ever known. As soon as he graduated from high school, he got his real estate license and became a successful realtor. Within 30 years, he opened a successful construction company, a store that sold kitchen cabinets, and owned over 20 rental properties. This wasn't enough for him though, and he started renting out his properties to people who would pay him extra so they could grow pot in them. His granite company was used to ship the weed across state lines using USPS, and now he's sitting in jail facing a minimum of 10 years. He shipped weed to nine different states — seven of which were states where it's still illegal."
9."My grandfather died and left everything to my mom. Then, my father died and left everything to her, too. Mom always thought she was a smart gambler that would win. As proof, she won something like $25,000 in the lottery once and went out and bought a car. That just got her hooked. When dad was alive, he kept her gambling under control. But after he died, mom got a new boyfriend — he was a former bookie who was a professional gambler. They subsequently squandered every single penny and more at the local casino. My sister told me that mom — after selling their big house for another half-million and buying a small little condo — had then taken out a home improvement loan against the condo for $50,000.00. No improvements were ever made, just money spent on casinos and lottery tickets. A cool million or two was gone."
10."My ex-girlfriend's dad was a war artifact/art collector and salesman. It was the kind of job where one sale made $5,000 to $100,000. That kind of quick money made him believe he could live rich. So, he lived in a big house, bought another big house in a different state, had a timeshare on an island, and would swap out for the newest Cadillac Escalade every two years. He managed to run life like this, getting into a habit of really bad spending choices, for 20 or so years until it was revealed to everyone he was subsidizing all of it with credit and wasn’t making nearly as much money as he used to or claimed. That was when the IRS and the banks came knocking. He had held onto some artifacts and art and was able to sell those piece by piece to lessen the blow, but it was an undeniable downward spiral. He ended up declaring bankruptcy."
"Private artifact collectors and art collections just aren’t as hot as they used to be, so he had to settle on low prices for all the sales. Now, he frequently moves around in a different state to keep the IRS and banks off his tail. My ex is just about the only person who has stuck by him through this, but there’s only so much she can do."
11."My parents are both smart people. They went to the best universities, and graduated with BAs and Masters in Architecture. They went on to design very high-end apartments and homes all over Queensland, Australia and saved up enough to open a Michelin-style restaurant on the water. It was a hit, they became incredibly wealthy, and that is when money started to take a toll on them."
"They went all out. Bought two penthouses in the same building and combined them into one. Owned and managed multiple high-end apartments all over the city. Bought multiple sports cars and even a yacht. Took my sister and I traveling all around the world. My life growing up was literally a model's Instagram page.
But then one day, a flood came. The restaurant went completely underwater and destroyed close to a million dollars worth of wine, not to mention the write-off on the kitchen. They were ruined. They had to sell everything just to cover the cost of the restaurant. They now live in a small apartment and are both still working over 70 to pay off all the loans they still owe."
12."My grandparents from both sides were extremely wealthy. They lost all their wealth during partition. My paternal grandpa told me how they buried KGs of gold in Pakistan to get it back one day. His father was a landowner and moneylender. Basically, really wealthy. But, they never returned post-partition. All their wealth was lost in a day. Many people have similar stories of burying gold, moving, and never going to get it back."
13."My great grandfather started a candy company that serviced most of the Wyoming Valley in PA. My grandfather (his son) sold the company for upwards of 100 million. He used the money to buy some land down in Florida, franchised a few radio shacks, and bought a lot of cars. During this time, he divorced my grandmother and married another woman with kids. Towards the end of his life, he reconnected with my mother and met me, but soon developed brain cancer. He decided to cut his wife out of his will and give all of his money (still around 10 million) to my mother and her brother. Because he was bedridden, he had to have his lawyer email and print out the new will, which he would sign and mail out to the lawyer. He asked his wife (whom he was screwing over) to mail the new will, and for whatever reason, it got 'lost.' He died a few days later with my mother unaware the will change hadn’t gone through."
"She paid for the funeral only to learn afterward from her lawyer that the will was never changed. She went to confront her stepmother only to find out that she and her sons had already flown to Florida, taken the money, and moved. She tried for a few years to sue, but due to state laws and lack of written evidence, she couldn’t get the suit off the ground. And that’s how my mother lost a multi-million dollar inheritance and got stuck with a $50,000 funeral bill."
Syco Entertainment / ITV
14."My grandfather was a thrifty man. He was always a DIY guy, hated hiring contract workers (except for my father, whom he introduced to my mother), and worked for nearly 40 years at our local GM plant. His savings, myriad cash deposits, and investments over the years netted him a net worth of about two or three million. After walking off the job at GM following a scuffle with the plant management, he went into business for himself and became a landscaper and evergreen farmer at 64 years old, earning government contracts with county and local agencies, which netted him another sizable chunk of money. His sister's husband did the same thing essentially, and this is where my aunt comes in. We'll call her Karen."
"Karen wormed her way into my great aunt's life. As my great aunt approached her 80s and started becoming more frail, Karen 'took care of her,' which meant she had my great aunt sign over power of attorney and immediately signed everything over to herself. Brand new house, all three cars, RV, everything. She cosigned my great aunt to a convalescent home where she died, the will having been officially amended to award everything not already taken by Karen to Karen.
My other great aunt died suddenly and left my mother as the executor of her modest will, which was basically the stuff in her house, as she was in the process of selling it. I was very young, but I remember my mom loading me and my two brothers into the car and flying down the highway to beat Karen to the house before 'anything turned up missing.' We were successful and Mom got to inventory and disperse everything properly. We ended up with, of all things, her turn-of-the-century pasta crank and her big box of recipes.
By this point, my grandpa had developed cancer and slowed down his business. Now 75 years old, he had a nice, modest house on a nice chunk of extremely valuable land thanks to the explosive development there. Mom took time off work to help Grandma care for him until he, too, passed away, leaving everything to Grandma. At this point, we moved into Grandma's to help her around the house and to help her close and liquidate the business assets. After about a year, Karen wormed her way in like a tick and things started disappearing. Like...farm equipment, and other things. Her daughter's husband also had gone into the storage barn and 'trashed out' a lot of family heirlooms (which also was where we kept a lot of our furniture from our home), all of which ended up in a fire pit behind the barn. It wasn't long after this that Karen convinced Grandma to let her 'handle' her finances, too.
Karen evicted us. Within two years, they sold the family home and land, liquidated all of Grandpa's stocks and bonds, and fled to Florida. Karen had once again gained power of attorney and legally stole all of Grandma's remaining assets. Grandma died ignominiously when she was given an insulin shot 20 times her supposed dose. She went into DKA and died slowly and horribly in brain death.
Out of an estimated $4 million inheritance, Mom and her two sisters were given an 'equal' inheritance of $12,000. Karen kept the house, the cars, and ended up burning through everything. Obviously, this ended up shattering the family, and now none of us speak to the other."
E!
15."My family was well above average when I was a kid. My father was a mechanic, and in 1981 he bought a car repair shop that made us money pretty well. Then in 1992, the Bosnian war started and our hometown of Sarajevo was put under a siege that lasted until 1996. In 1994, we were able to escape the city and move into a refugee camp. When the war ended, we returned to Sarajevo and my father's car repair shop, as well as our home, were in total ruins after all the artillery and mortar fire. We were able to get a new home fairly quickly with the help of some of our relatives, but we never got the car repair shop fixed. It was in such bad condition that we just demolished it after we had sold all found scrap metal and usable tools."
16."Not me alone, but my family. Both of my parents got serious illnesses. About $2 million gone in five years. I went from really never thinking much about money to everything being gone, wondering how to run up all of my parent's debts as far as possible to keep a roof over their head before having them declare bankruptcy. American health care is borderline criminal."
17."This happened to my grandma. For a little backstory: my great grandparents owned a luxury fur coat business and made an absolute shitload of money. When my grandma and her brother, my great uncle, moved out from their parents' house, they were given a sizable amount of money to fund their adulthood. Not millions, but far more than the average person might get in such a situation. My great uncle ended up opening two businesses using this money — a gas station and a used car lot. He made pretty good money running them. Grandma, however, took this money and blew a lot of it on fancy clothes, vacations, etc. She then got married to my grandpa, had three kids, and then he ended up cheating on her and took a bunch of her remaining money in the divorce. Meanwhile, great uncle was furthering his business ventures, opening a payphone business, helicopter tours, and all kinds of other shit. He was rolling in money at this point."
"Sometime later, my great grandparents died within months of each other. They then split their inheritance two ways —1/3 of it going to my great uncle, and 2/3 going to my grandma. The argument was that he was a wealthy bachelor with no kids, and she was struggling to get by with a secretary job while raising three kids by herself. This ticked off my great uncle quite a bit since he knew what she had done with her previous huge handout. He was mad about the inheritance not being 50/50, but not something that he'd quit talking to my grandma over.
So, what do you think my grandma did with her huge windfall of money? Did she open a business? No. Did she invest it in some way? Nah. Did she do absolutely anything productive whatsoever? Of fucking course not. The first thing she did was buy a great big house in a nice neighborhood. Actually, no wait, that was the second thing she did. The first thing she did was quit her job. Then, she bought a luxury car. Then came luxury clothes for my mom, aunt, and uncle. Then she hired a full-time live-in maid. Then came the vacations to all the hottest vacation spots of the day. Gourmet meals every day. All the toys and gadgets that they could possibly want. You name it, she bought it. So it should come as no surprise that she burned through the entire inheritance in less than a year.
Two-thirds of the money that her parents had worked their whole lives for, more money than anyone should reasonably ever be able to spend, she blew through in under 12 months. But she kept spending, driving herself into debt. They lost the house, lost the luxury car, and even had to sell all their fancy clothes and toys, just to pay the enormous debt she had gained.
And then she came to my great uncle's office and asked him for money.
She was promptly thrown out by security and was told that he would never speak with her again. And he never did. Imagine my surprise when I grew up in what was basically the borderline of total poverty, and my family tells me that they used to be filthy stinkin' rich. Because of what my grandma did, my great uncle more-or-less cut off contact with her side of the family for YEARS. It wasn't until I was a teenager that I ever met the man. I think later on in his life, he felt bad about punishing the rest of the family when all of the fault lay on my grandma, and he started to talk with us every so often... but we knew to never ask him for anything, even though we were all struggling.
When my grandma was on her death bed, she begged for us to have my great uncle come to the hospital so she could apologize to him. When told about this, his response was basically, 'I don't give a fuck.'
And then, in an almost ironic twist, he married an obvious gold digger, 30-ish years his junior, who had already survived two other dead old rich guys. When he died, she got everything, disconnected their phone line, and disappeared like a fucking bandit. His actual family got nothing."
