Bitte bedenken Sie bei allem, was Sie auf meiner Homepage über Geld und Finanzen finden, daß Geld und Vermögen keine Sicherheiten darstellen, auf denen Sie Ihr Leben aufbauen sollten.
Geld und Vermögen sind nicht einmal dann Sicherheiten wenn man der reichste Mann der Welt ist.
Hier einige Beispiele von Männern und Frauen, die einige Zeit ihres Lebens sehr reich waren und alles verloren haben. Keinen davon sollte man dafür verurteilen, weil dasselbe Schicksal wirklich jeden treffen kann.
Anna Nicole Smith was perceived as a gold digger when she married her 90-year old husband. After a year of marriage, her husband died and left her a fortune. However, his second marriage to oil Mogul J. Howard Marshall gave her more troubles. When Marshall died, the end result of her marriage was a case in the court. She claimed that Marshall deliberately intended to leave her nothing. The case wasn’t even close to reaching a verdict when another sexual harassment lawsuit was filed against her. The cases led her to file for bankruptcy but she continued to fight to get her shares from her dead husband’s estate. It was as if her battles will never end. When she died, more press coverage were directed at her family specifically her two children.
Walt Disney wasn’t able to use his “magic” in preventing the company in the brink of bankruptcy. When Walt Disney built his Magic Kingdom Empire, it was regarded as the biggest movie production in the world. His popular animation production studio was Laugh-O-Gram. And through the years, the company led local theaters in showing animated fairy tales. When Laugh-O-Gram became famous, Walt Disney saw the need to look for a financial backer for more projects. But, the backing firm was busted and the end result was for Walt Disney to eventually file bankruptcy.
Jerry Lee Lewis can offer you one of the most interesting biographies when it comes to life’s ups and downs. He always asserts his own way especially when he plays the piano and this was the main reason why he was kicked out of the Bible College. In spite of this not so good record, Jerry Lee Lewis was able to become a part of the Sun Records Sam Phillips. His two singles became a sensation under Sun Records and his talents and skills contributed in the success of the rock n’ roll mainstream. When he married his 13-year old second cousin, the collapse of his career followed suit. Though he still made records he eventually filed for bankruptcy. Luckily, the rock n’ roll icon was able to recover from his ups and downs. His old age did not stop him from pursuing more music projects.
Lawrence Taylor became notable for two reasons: his fearless way of playing football as a linebacker and his being crazy, wild, and reckless both in the field and in real life situations. He was twice tested for cocaine use, how is that for a real wild lifestyle? Later on, he admitted about his fondness in taking drugs. He saw business as a way to earn more but his $10 million was invested in vain. Almost two decades after he pled guilty for not filing his tax return in 1990, Lawrence Taylor filed for bankruptcy so his home will not be foreclosed.
und noch einmal 10 Millionäre, gesehen hier
We live in a society filled with dreams and aspirations of wealth, a society that likes to believe that money will bring with it happiness and success. The will to succeed is overpowering for some, and the pressure can be all-consuming. Mental pressure can take many forms; stress can enter our lives at any time, regardless of timing or situation. The following men were all successful businessmen who committed suicide. The millions in their bank accounts did nothing to ease their suffering…
Thirty-five-year-old Jonathan Wraith — a young British millionaire by virtue of selling his and his father’s portable cabin business for £30 million ($46 million) — was by all accounts a happy and well-adjusted young man. However, in 2009 he picked up his shotgun and shot himself, leaving no suicide note. No clear reason could be found for Wraith’s action, but there has been some speculation that he was extremely worried about his father David’s recent stroke. It seems that this may have proven too much for the young man to take.
Eli M. Black, whose death was immortalized on screen in the Coen Brothers comedy The Hudsucker Proxy, was a Jewish-American businessman and millionaire controller of the United Brands Company. An astute and forward thinking capitalist, Black’s career included stints with Lehman Brothers and then the American Seal-Kap Company, which he renamed AMK. The early ’70s saw AMK merge with United Fruit Company. With that, Black’s fate was sealed. His downfall was rooted in the discovery of his $2.5 million bribe offered to the President of Honduras, to reduce export taxes on bananas. Taking matters into his own hands before the scandal broke, Black climbed the 44 floors of his office building and leapt out onto crowded Park Avenue to the horror of onlookers below.
At 49, father-of-two Huibert Boumeester took his own life after becoming seriously depressed in the fallout of the £50 billion ($77 billion) takeover of ABN Amro by the Royal Bank of Scotland. The Dutch millionaire banker’s body was discovered in a woodland area several miles away from his home in London. A suicide note to his wife Frederique that was found on his body read that he could not “go on.” The coroner confirmed that Mr. Boumeester had ended his life while depressed, explaining: “He drove to a very isolated location in woodland, sat down and used the shotgun to end his own life.”
In August 2008, Christopher Foster, a 50-year-old British businessman, murdered his wife and daughter before burning down his house and killing himself. The businessman shot his wife Jillian and daughter Kirstie, prior to succumbing to smoke inhalation. Foster, wealthy by virtue of his company’s work creating oil rig insulation technology, was nevertheless beset by financial concerns. Despite being a millionaire residing in a five-bedroom country mansion, he was living beyond his means, with debts of £4 million ($6.2 million). It seems that, tragically, these financial worries may well have pushed him over the edge.
John Lawrenson was a successful businessman who lived in a £1.2 million ($1.8 million) mansion (the Old Rectory, above). He was healthy and seemingly happy, and had earned the right to enjoy the profits from a lucrative life in the publishing world. This all would have been fine, except for one thing: his beloved wife Caroline was dying of cancer. The devoted couple, married for 47 years, poisoned themselves with a substance bought via mail order from Mexico. A suicide note found near their bodies confirms the truth: Mr. Lawrenson could not bear the thought of living alone and decided to take the matter into his own hands.
Wayne Pai was a successful Taiwanese businessman, and founder and chairman of the securities broker the Polaris Group. In the wake of rumors of insider trading, the nevertheless well respected Pai was found dead in July 2008. His wife and members of Polaris’ staff flew to the outlying island of Penghu to assist police with their inquiries. Pai’s suicide came at a time when allegations were being made that a former president of National Chiao Tung University had been receiving regular payments from Polaris. Pai’s body was found floating in waters surrounding the outlying island.
Paul Castle — a self-styled businessman and property tycoon who had met the Queen of England and played polo with Prince Charles — killed himself in 2010. The 54-year-old threw himself in front of a London Underground train, leaving no chance of survival. The businessman, described as a “workaholic,” had seen several property deals go awry over the last year of his life and had also lost capital in a gas and oil surveying company. Castle, who suffered from chronic heart problems and tumors, had been married three times and was due to be wedded for a fourth time, to his girlfriend Natalie Theo.
Peter Smedley was an enormously successful millionaire hotelier and businessman with a tinned food empire that provided him with a sizable income. He and his wife Christine — who had been married for 33 years — enjoyed a luxurious lifestyle befitting of their riches. However, Mr. Smedley was also an extremely ill man, suffering from motor neurone disease. He ended his life by his own volition, at an assisted dying organization, the Dignitas clinic, in Switzerland. In a further twist to the story, Mr. Smedley’s death was filmed by the BBC, with segments televised as part of documentary about assisted suicides.
In an alarming case of destructive emotion, self-proclaimed “lord of the manor” millionaire Howard Worthington shot himself with one of his prized shotguns just moments after shooting his lover Julie Rees. The 52-year-old English former businessman, who made his fortune in the steel industry, had been ordered to stay away from his £1.3 million ($2 million) country home after threatening her with a gun a few weeks prior. While Rees recovered, Worthington did not. Verdict: suicide.
Long Island resident and computer software high flyer ReiJane Huai killed himself with a single shot in September 2011. The former president and CEO of FalconStor, a data storage company, had resigned suddenly in 2010 following a lawsuit filed against him. The millionaire committed suicide on the front lawn of the $2.5 million home he shared with his wife, ShuWen. The Taiwanese-born Huai — who had traveled to the USA to study in 1984 — had several adult children living in the US and was described as a “visionary and leader” by a FalconStor spokesman.
Charles Hopper — 63 years old and facing mounting financial troubles – hanged himself in the garage of his Connecticut home last month. But five years earlier, before desperation drove him to that point, he’d been an executive at Lehman Brothers earning seven figures a year.
Hopper’s fall from grace — as revealed in a detailed New York Post feature this week – is just one in a long series of tragic outcomes that can be traced back to the financial crisis.
Hopper had been a hedge fund advisory executive at Lehman, but he lost his job in 2007, about a year before that firm filed for bankruptcy and triggered the bank panic of 2008. Hopper struggled to find work for two years, eventually landing a job at Appomattox Advisory that paid $150,000. He was underwater on his mortgage and had borrowed and spent a little too freely during the good years — for himself, pricey watches and a Porsche; for his wife, whatever she wanted, it seems, including cameras, sculling lessons and graduate school courses.
His suicide, sadly, is far from the only recent example of a Wall Street worker driven to extreme measures after experiencing financial troubles.
In 2008, Rene-Thierry Magon de la Villehuchet, a French investment advisor, took his own life after losing both investors’ money and his own life savings in Bernard Madoff’s Ponzi scheme. De la Villehuchet reportedly felt consumed by guilt for his role in the loss.
Barry Fox, a research supervisor at Bear Stearns, jumped from his 29th-story apartment in 2008 after learning he wouldn’t be hired on by JPMorgan Chase, which was buying up the company.
A few months later, Eric Von der Porten, who founded the California investment fund Leeward Investments, took his own life after suffering major losses in the market downturn of late 2008. Von der Porten, who had been struggling with depression, had a reputation for integrity and community-mindedness.
Similar tragedies have been dotting the landscape in Europe, as a stark financial climate has left many investors and small business owners grappling with overwhelming levels of debt. So many suicides have occurred on the Continent in recent years that some European papers are referring to the trend as “suicide by economic crisis,” according to The New York Times.
Horatio Gates Spafford (October 20, 1828, Troy, New York – October 16, 1888, Jerusalem) was a prominent American lawyer who was heavily invested into real estate in Chicago.
The great Chicago Fire of October 1871 ruined him financially.
Shortly after, while crossing the Atlantic, all four of Spafford’s daughters died in a collision with another ship. Spafford’s wife Anna survived and sent him the now famous telegram, “Saved alone.”
Several weeks later, as Spafford’s own ship passed near the spot where his daughters died, the Holy Spirit inspired him to write one of the most famous Christian hymns. The hymn speaks to the eternal hope that all believers have, no matter what pain and grief befall them on earth.
Die Geschichte von Xiong Kai aus Singapore muß ich noch weiter zusammentragen. Xiong Kai war ein schwerreicher Mann, der vor der Asienkrise 1997 in Immobilien in Singapore investierte.
Die Asienkrise und was danach folgte, machte ihm finanziell den Garaus.
Seine Frau ließ sich von ihm scheiden, er sagt heute: “zurecht”
Heute ist Xiong Kai immer noch nicht von den Konkursbeschränkungen in Singapore befreit.
Er hätte gar nichts mehr, wenn nicht seine Tochter ihm ab und zu helfen würde.
Gott hat ihm oft konkret geholfen, wie er zu berichten weiß.
Xiong Kai arbeitet heute in Indonesien als Missionar und Pfleger für leprakranke Arme.
Jesse Binga was once one of the richest men of his time, but when the depression hit he lost everything and died as a poor man in June 1950.
Jesse Binga was born in Detroit, Michigan in 1865.
Binga was an honorary member of Alpha Phi Alpha fraternity.
He moved to Chicago to start a bank in 1908.
The bank was made primarily for African-Americans, since during that time many banks would not allow African-Americans in. The Great Migration came, and Binga State Bank grew more popular.
Jesse Binga grew to be a rich man and eventually he and his wife bought a house at 5922 South Park Avenue, which is now known as King Drive, which was a strictly white neighborhood, and his house was bombed five different times by racist neighbors.
In 1929 the Great Depression hit, and Binga Bank was forced to close. Then bank examiners said that Binga State Bank was run illegally and Jesse Binga was sent to jail on a ten-year sentence. After a few years Binga was released thanks to many protests and petitions. Binga was given a $15 a week job as a janitor at St. Anselm’s Church. He died at age 85.
When the money goes, so does the toxic wife
As the recession worsens, a lot of rich men are finding their gold-digging wives are taking to their heels
‘You loser!” screamed Katie, aiming a vase at her husband. “You’ve destroyed my life,” she continued, hurling it. “Just look at my hair, look at my nails! You loser, you jerk, you nobody.”
Some women are like businessmen – utterly ruthless, and seeing a rich man as their career path
Some women are like businessmen – utterly ruthless, and seeing a rich man as their career path
Katie’s husband, Jack, whose property portfolio disintegrated in the financial crash, had just told his wife that she would have to cut back on her thrice-weekly visits to Nicky Clarke, the nail salon in Harvey Nichols, and the oxygen facials, chemical peels and seaweed wraps at Space NK.
Not only that, but they no longer had the money to pay for an army of bullied Eastern Europeans to wait on her hand and foot.
Worse was to come – the brow-lift would have to be cancelled; her black Amex card would have to be snipped in half; and there was no way, he told her, that he could carry on spending £28,000 a year on Henry’s school fees at Eton.
Chloe, too, would have to leave the marginally cheaper (only £25,000 pa) Wycombe Abbey immediately.
How to spot a toxic wife on the prowl 26 Nov 2008
On the dole in Henley-on-Thames 12 Nov 2008
Such was the aggression and verbal and physical abuse that followed that Jack was left with cut lips and blood streaming from a broken nose.
Their eight-year-old child, not yet at boarding school, sat cowering in a corner and dialling 999. When they arrived, they had to restrain Katie forcibly from attacking her husband.
An extreme and isolated example of the global economic meltdown hitting the £1 million home? Sadly no. When the super-rich feel the pinch, inevitably, the Toxic Wife heads off.
The Toxic Wife, first identified in these pages almost two years ago, is a particular and terrifying species.
Not to be confused with the stay-at-home mother who selflessly devotes herself to the upbringing of her children, with all the housework and domestic chores that entails, the Toxic Wife is the woman who gives up work as soon as she marries, ostensibly to create a stable home environment for any offspring that might come along, but who then employs large numbers of staff to do all the domestic work she promised to undertake, leaving her with little to do all day except shop, lunch and luxuriate.
Having married her wealthy husband with his considerable salary uppermost in her mind, the Toxic Wife simply does not do “for richer, for poorer”. Little Dorrit, she ain’t.
Indeed, lawyers and financial advisers have reported a 50 per cent increase in the number of divorce inquiries since the financial markets collapsed in September.
A recent survey conducted by community website makefriendsonline revealed that a third of 10,000 respondents believe that financial hardship will cause a relationship to fail, while matrimonial law specialists Mishcon de Reya have reported up to 300 per cent more inquiries.
Numbers have risen significantly as couples seek to reach an agreement before the recession tightens its grip. But for the Toxic Wife, “agreement” is the last thing on her mind.
There are countless stories of them acting in the most bizarre and inhumane ways. For gold-diggers are materialistic to such an extent that they are emotionally detached from other people.
There’s an inability to empathise with another human being. They certainly don’t ”do” conscience. Money, on the other hand, they both love and understand.
”I told my wife to stop this organic food malarkey,” said Jeremy, a beleaguered hedge-fund manager, another man who fell for an extremely beautiful yet extravagant woman.
“She went ballistic. Organic Hass avocados cost £1.75 each and she wanted me to buy six of them! In the end, I just peeled off the labels that said they were certified organic and put them on ordinary avocados – she didn’t notice the difference. I did the same with bananas…”
”So why did she walk out on you?” I asked.
”She has a very high standard of living,” he said. ”She’s never taken the Tube or a bus; it’s always taxis. And she likes to eat out a lot, at the best restaurants, and she likes to buy expensive gifts for people she wants to impress.
“As soon as the financial wobbles started, she must have joined some upmarket dating agency because somehow she’s found another very rich man pretty damn fast.”
Another case is Sasha who, for the past few months, had been gloating about the £3.4 million chalet in Verbier her husband was about to exchange on, how she’d managed to hire a high-society interior decorator to do it up for a song (”more an anthem, actually”, she’d giggled) and how much she was looking forward to a white, snowy Christmas there.
At the last minute, Husband pulled out of the deal. Never mind that he had lost his lucrative job in the City, she felt he had deliberately traumatised her and is suing him for divorce on the grounds of mental cruelty. ‘
‘She’s got the personality of an overindulged infant,” he sighed, ”a spoilt brat who starts screaming the moment a toy is taken away.”
In the grown-up world that toy is money and what it can buy: status, power, glamour and arrogance. It also has a way of making these particular women precious. ”Because I’m worth it” has become the catch-all legitimiser for any personal indulgence.
According to Susie Ambrose, a marital psychotherapist and CEO of Seventy-Thirty, an upmarket introduction company that takes its name from the work versus free time balance, there has been an unprecedented demand from married women recently.
”We are being targeted by women on the fence between leaving their husbands who are on the brink of losing their wealth, and wanting to meet someone extremely rich straight away,” she says.
Like a frog, the Toxic Wife needs to hop safely on to another lily pad, and a rich one, before leaving her husband. She won’t stand on her own two feet. And finding a job is quite beneath her.
Yet Susie Ambrose thinks such women ”are like businessmen – utterly ruthless”. The rich man is the career path, the meal ticket, and it doesn’t matter how fat, old, balding or unattractive he is – it’s solely about money.
”These particular women know how to fake love,” adds Ambrose. ”They’re actually very good at it.”
She now has a waiting-list for her life-coaching sessions – a course costs between £10,000-£60,000 – on how to distinguish a gold-digger from a genuine woman.
Men, it seems, have got wise to the potential Toxic Wife and don’t want to end up with someone who is going to bolt the moment they experience some financial bad luck.
For men, divorce is one of the most expensive trials in life – emotionally and financially. As the joke doing the rounds among City men goes: “This credit crunch is worse than a divorce. I’ve lost half my net worth and I still have a wife.”
But this is no joke. I’ve seen at first hand how, as soon as money disappears, so does love.
Olivia and Richard had a set of beautiful and expensively conceived twins (we’re talking around £30,000 worth of IVF treatments for the right gender – she joked how she would send them back if they were girls), a fabulous house, great holidays several times a year, two nannies and a lifestyle of which most of us lesser mortals could only fantasise.
How we laughed when Richard, with admiration in his voice, mentioned at a drinks party last year that he’d turned to his wife in the middle of the night and asked her if she’d still love him if he lost all his money.
”F— no!” had been her answer. Such a feisty, amusing (and obviously joky) response delighted him. But today he is scratching his head with abject dejection. She had meant it.
She left him the moment he lost his senior post at an investment bank and immediately hooked up with another rich man.
Worse, she took their boys with her and he rarely sees them because she has since moved to America to start afresh with her new, unsuspecting milch-cow.
As most of us are battening down the hatches and finding inventive ways to cope with the new austerity, some unfortunate men have not only lost their jobs, they are also having the scales ripped from their eyes.
The horrible truth has dawned: they married a woman who wanted them solely for their money.
GEORGE FOREMAN — bald, smiling and gigantic — is propped atop a stool in Gleason’s Gym, the venerable boxing haunt in Brooklyn, watching a videotape of his heavyweight championship bout in 1994 with Michael Moorer.
Mr. Foreman once devastated opponents with brutal, staccato punches short on artistry and long on force. He disposed of formidable pile drivers like Joe Frazier, traded blows with dangerous magicians like Muhammad Ali, and dropped the undefeated 26-year-old Mr. Moorer in the 10th round with a right to the jaw.
Mr. Foreman was 45 at the time of the Moorer fight, a roly-poly 250-pounder who had just reclaimed the heavyweight mantle that Mr. Ali had snatched from him 20 years earlier. By knocking out Mr. Moorer, Mr. Foreman became the oldest heavyweight champion in history and he hailed his victory at the time as one “for all my buddies in the nursing home and all the guys in the jail.”
As Mr. Foreman watches the tape of Mr. Moorer crumpling to the mat, part of a boxing retrospective that ESPN is shooting at Gleason’s, he beams. “Play that again,” he says to no one in particular, softly chuckling to himself. The knockout was the culmination of an unlikely return to the ring that Mr. Foreman staged in his later years, well after he had retired. He has often said that he ended his retirement to prove that nobody is too old for a comeback.
But Mr. Foreman confides in an interview that something else actually drove him back into boxing in the late 1980’s, and it had nothing to do with proving the meaninglessness of an AARP card. Having blown about $5 million, made mostly, he says, during his salad days as a young champion, he desperately needed the money he could earn by fighting again. A former street thug from Houston, accustomed to dispassionately cutting down the most ferocious of men, Mr. Foreman was on the verge of bankruptcy in the 1980’s — and it terrified him.
“It was frightening, the most horrible thing that can happen to a man, as far as I am concerned,” he says. “Scary. Frightening. Nervous. I had a family, people to take care of — my wife, my children, my mother. I haven’t gotten over that yet.”
Pondering his glimpse into the abyss a moment longer, Mr. Foreman’s eyes tighten: “It was that scary because you hear about people being homeless and I was only fractions, fractions from being homeless.”
UNLIKE many others with lush bankrolls who somehow manage to lose it all, Big George rebounded handsomely from his flirtation with bankruptcy. He earned multimillion-dollar purses boxing in the 1990’s and made tens of millions more by reinventing himself as a gentle entrepreneur, astutely peddling the best-selling hamburger grills that bear his name.
Even so, the trajectory of Mr. Foreman’s finances once had him headed into a gilded pantheon of big buckaroos who have squandered often-unimaginable sums of money, come perilously close to personal bankruptcy or completely lost their shirts. The ranks of well-heeled debtors include Thomas Jefferson, Buffalo Bill Cody, Mark Twain, Ulysses S. Grant, Debbie Reynolds, Michael Jackson, Dorothy Hamill, Robert Maxwell, Mike Tyson, Jack Abramoff and a long and pitiful cast of lottery winners.
Each of these grandees had distinct encounters with errant money management. Some of them were undone by rampant spending, others by injudicious deal-making, still others by various shades of greed, fraud or spectacularly poor investments. All of which gives rise to the same old set of questions: Why can’t those who are already wealthy restrain themselves from spending more than they have? Why do rich people, those who would seem to have all the financial padding one needs, wind up deeply in debt? Even worse, why do some of them end up broke?
Mr. Foreman, street-smart and now mindful of his wallet, has his own perceptive answers to those questions. For the man who came back from the brink, it’s all a matter of discipline and proper boundaries.
“A lot of people just don’t grow up,” he says. “I mean, 65-year-old men. They just don’t grow up. They don’t understand that money does not grow on a tree and that you’ve got to respect every dollar. Like Rip Van Winkle — the guy who slept — they party, party, party, then they wake up. ‘Oh my God!’ And they do something desperate trying to recapture what they had. And it doesn’t work like that. You must stay awake.”
David W. Latko, a money manager and radio host who recently published “Everybody Wants Your Money” (HarperCollins), a personal finance primer, reduces the mechanics of squandered wealth to handy categories. He says there are five basic ways people become rich: they inherit, marry, steal, win or earn their fortunes. Only those who earn fortunes, says Mr. Latko, tend to preserve their wealth. Inhabitants of the other four categories are more prone to be wastrels.
“The first thing you’ve got to look at, always, is where is the money coming from,” he says. “People who’ve made money themselves protect it. People who’ve inherited it spend it.”
Profiles of wealthy debtors may not be quite as tidy as Mr. Latko’s list suggests; self-made gazillionaires can wind up insolvent, too, particularly if they earn their money in celebrity circuses like Hollywood. But by and large, Mr. Latko’s list rings true and reinforces one of Mr. Foreman’s points: America’s rich, it would seem, sometimes do believe that money grows on trees.
In some of the darker scenes in Frank Capra’s 1946 cinematic parable about family, community and money, “It’s a Wonderful Life,” Uncle Billy, a kindly, pastoral fogy whose bank office is routinely visited by crows and squirrels, misplaces a hefty deposit that threatens to upend the Bailey family’s little savings-and-loan. Billy’s nephew, George Bailey, played by that symbol of middle-American rectitude, James Stewart, warns his uncle of the consequences of a bank collapse that also promises to force the Bailey family into debt.
“Where’s that money?” George screams at his uncle, growing more frantic by the second. “Do you realize what this means? It means bankruptcy and scandal and prison!” Later rescued from suicide and shame by a bumbling angel and generous townsfolk who kick in hatfuls of cash around the Bailey family’s Christmas tree, George gets smooches from his lovely wife and a new lease on life.
In our more modern financial era, fueled by credit card debt, home equity loans and myriad other forms of handy spending money, George Bailey’s predicament strikes us as, perhaps, quaint. When people like the former baseball commissioner Bowie Kuhn — who earned a handsome salary overseeing the national pastime before his law firm collapsed in bankruptcy in 1990 — decamp to manses in Florida to take advantage of state laws that prevent creditors attaching expensive homes, George Bailey’s fear of ostracism rings old-fashioned.
Over the last three decades, personal bankruptcy rates in America have soared. But in a nod to the notion that going belly-up still carries a whiff of disrepute, Congress tightened bankruptcy laws last year to circumvent what Senator Orrin G. Hatch, Republican of Utah, decried as “a way to avoid personal responsibility.”
It may be, however, that for most people, a bankruptcy filing simply marks an inability to stay afloat — not an attempt to dodge creditors — because most of those who lose their shirts typically are not rich.
According to a study by the St. Louis Federal Reserve last fall, most bankruptcy filers are blue-collar, lower-middle-class high school graduates who are already overloaded with debt when they get sideswiped by unforeseen miseries like a job loss or overwhelming medical expenses. Rarely do the rich have to ponder the consequences of layoffs or insurmountable hospital bills, yet the social ledger is chock-full of examples of landed gentry who still dissipate their wealth and run the risk of ignominy.
Buffalo Bill hauled in the equivalent of about $30 million in today’s dollars overseeing his Wild West show at Chicago’s Columbian Exposition in 1893, according to Erik Larson’s book “The Devil in the White City.” A financial panic in 1907 ruined him and his show; when he died in 1917 there wasn’t enough money in his till to pay for his burial.
Mark Twain, who had a lifelong penchant for dodgy investments and gimmicky inventions, lost about $4 million in today’s dollars betting on a newfangled but unwanted typesetting machine in the 1890’s. He subsequently had to take to the lecture circuit to stave off bankruptcy.
Michael Jackson, who began churning out Top 10 songs and albums as the lead singer of the Jackson 5 before reaching puberty, found it necessary to pledge a stake in his lucrative songbook of Beatles hits to secure a $270 million bank loan to forestall a slide into bankruptcy.
Mike Tyson, like Mr. Jackson a gifted man-child, is entangled in his own financial woes despite once having the marquee power to draw $30 million purses for a single fight. When Mr. Tyson filed for bankruptcy in 2004, he listed debts of $27 million, including about $13 million in unpaid federal taxes and about $174,000 for a diamond-studded gold chain. He had maintained a monthly budget of about $400,000 before the filing.
Buffalo Bill, Michael Jackson, Mike Tyson, Wayne Newton, Burt Reynolds, Elton John and other public examples of spending run amok were, or are, all entertainers, and entertainers offer ready fodder for tsk-tsking — largely because gossip columns make it easy for the rest of us homely paupers to take quiet satisfaction in their plight. Entertainers, for the most part, are also peculiarly vulnerable when it comes to personal finance.
“You have people who are struggling for a long time and then overnight, boom, they hit it,” says Shelley Finkel, Mike Tyson’s manager. “If they don’t have someone watching out for them, and some emotional stability, it will be very hard for them to be grounded financially.”
MR. FINKEL, a genial, elfin 62-year-old New Yorker who began his own career promoting a A-list rock stars like Jimi Hendrix, said he had always advised musicians and athletes to protect their wealth by socking away a chunk of their earnings into annuities or pensions. Few of them have heeded that advice, he said, including Mr. Tyson, who Mr. Finkel believes earned and lost more than $400 million in his boxing career.
“It’s very hard to tell them ‘Don’t!’ because they love the instant gratification,” Mr. Finkel says. “I think the human in general is vulnerable and whatever their weakness is it’s going to get exploited, particularly around money.”
Mr. Foreman, unlike most entertainers and athletes, had homegrown financial antennae, and his budgetary acumen surfaced at a relatively early age. He slugged his way into prominence by winning a gold medal at the 1968 Olympics, and a year later, when he was 20, he turned pro. Schooled, he said, in the perils of errant spending by the financial predicament of the boxing legend Joe Louis, he decided to form the George Foreman Development Corporation in 1971.
“I had so much time alone,” he recalls. “Not many people thought I would be champ of the world. Didn’t have any friends at all. And what I would do is walk to the bookstore, and I’d buy books. And they were books on taxes, accrual taxes, estimated taxes, and you better make a corporation.”
Mr. Foreman says his homework persuaded him to put about 25 percent of what he earned at every bout into a pension and profit-sharing plan controlled by his corporation. “I had all this time dreaming of this, so that when money came upon me I was already prepared,” he says.
Despite how closely Mr. Foreman tended his nest egg, most of his assets remained exposed. He describes the way he invested his unencumbered cash, about $5 million, as a series of blunders: “Oil wells, gas wells, banks, flop, flop, flop.”
Entertainers aren’t the only rich people with holes in their pockets. Business people, seemingly prepared to have a better handle on their balance sheets than celebrities, have wound up as big debtors as well. William Randolph Hearst, of the publishing empire, the San Simeon estate and a 280-foot yacht, stood at the edge of insolvency in the late 30’s. John Z. DeLorean, Motor City dream weaver and inventor of a streamlined sports car that bore his name, filed for bankruptcy in 1999 after financial and legal problems.
Questioned in 1991 about the reasons rich people hit the skids, the multibillionaire investor Warren E. Buffett told an audience at Notre Dame that debt and alcohol were ever-present culprits in financial demise. “I’ve seen more people fail because of liquor and leverage — leverage being borrowed money,” he said, according to a transcript of his comments. “You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.
“I’ve never borrowed a significant amount of money in my life. Never,” he added. “Never will. I’ve got no interest in it. The other reason is I never thought I would be way happier when I had 2X instead of X.”
Yet even the most well-to-do sometimes still rely on debt. Over the years, Lawrence J. Ellison, founder and chief executive of Oracle, has preferred to hold onto, rather than sell, his shares in the database provider, giving him a stake currently valued about $17.6 billion.
Oracle shares represent almost the entirety of Mr. Ellison’s fortune, and to finance one of the country’s splashiest spending sprees (454-foot megayacht, mansions, expensive hobbies and more) he has occasionally taken on sizable bank loans rather than sell his shares — all on the presumption that the value of his shares will remain lofty enough to allow him to pay back the loans.
A RAFT of e-mail messages and financial documents introduced in a lawsuit that disgruntled shareholders filed against Mr. Ellison and other Oracle executives in 2001, give witness to some of Mr. Ellison’s budgeting practices. (The suit was settled last November and the judge in the matter subsequently unsealed financial documents submitted as exhibits in the case). The documents, first reported by The San Francisco Chronicle earlier this year, also show how far Philip E. Simon, an adviser who described himself as Mr. Ellison’s “financial servant,” went in trying to persuade his boss to pay off about $1.2 billion in loans. (Neither Mr. Ellison nor Mr. Simon responded to interview requests for this article).
Mr. Ellison’s ledger around the end of 2000 included annual “lifestyle” spending of about $20 million, the purchase of a Japanese villa for $25 million, a proposed underwater archeology project earmarked for $12 million and his new yacht, budgeted at $194 million (news reports later said that the yacht’s final cost approached $300 million).
“I know you view me as a pessimist,” Mr. Simon wrote Mr. Ellison in an e-mail message in 2002, several months after banks began sounding alarms about Mr. Ellison’s debt. “Maybe you’re right, though I would disagree. Nonetheless, I think it’s imperative that we start to budget and plan. New purchases should be kept to a minimum. We need to establish and execute on a diversification plan to eliminate (yes, eliminate) all debt and build up a significant, conservatively structured, liquid investment portfolio.
“I know you don’t like to discuss this,” Mr. Simon added. “I know this e-mail may/will depress you. View this as a call to arms.”
Mr. Ellison paid down a portion of his debt by 2002, according to court filings, and his Oracle holdings are vast enough that it was unlikely that his financial well-being was ever in peril. But for lesser financial potentates, the psychological twists behind overspending and bad investing can be more debilitating.
“The rich are different from you and me: they are more egotistical,” says Theodore R. Aronson, managing principal of Aronson Johnson Ortiz, an investment firm in Philadelphia. “Psychologically, I think the rich, because of their egos, think they know everything. Well, they don’t, and many of them repeatedly make horrible investments — because they can.”
Financial success can breed its own peculiar set of vulnerabilities. “People who are very successful develop elevated sensibilities about their skills, and when things turn on them they won’t admit they’re wrong because their self-confidence has held them up so long,” says Arnold S. Wood, chief executive of Martingale Asset Management in Boston. “In the face of evidence, even subjective evidence, that suggests that something bad is about to happen to someone, a funny thing happens: They reject the evidence.
“These kinds of people just continue spending because they think the money will keep coming in because they’re so successful,” adds Mr. Wood, who says he is fascinated by the possible neurological and social underpinnings of financial delusion and decision-making. He believes that gender plays a strong role in financial ruin because, he says, women tend to be more risk averse than men when it comes to money. Some interesting research backs this up.
Brad M. Barber, of the University of California at Davis, and Terrance Odean, a business professor at University of California, Berkeley, noted in an analysis in 2001 of stock trading, “Boys Will Be Boys,” that psychological studies demonstrated that men tended to be more overconfident than women. Financial data supported the same point. “Models of investor overconfidence predict that men will trade more and perform worse than women,” the professors’ study concluded.
Dig a little deeper into this psychological terrain, and, alas, the financial deck may be stacked beginning in childhood, regardless of sex. Kathleen Gurney, a “financial psychologist” who advises wealthy people trapped in monetary crises, said that the social milieu in which people grew up, the early messages they received about money and their individual emotional makeup all conspired to define how well they handled money as an adult.
America’s consumer landscape, which prizes spending and encourages people to define themselves by what they own, only makes the financial balancing act trickier for adults, especially if they have fat wallets.
“Someone who goes broke, or someone who goes into debt, is really somebody who isn’t comfortable having their money,” Ms. Gurney says. “Yes, it appears as a lack of discipline. But the lack of discipline comes from an emotional place that causes them to be undisciplined. It’s not about the money. It’s about our emotional relationship to money.
“The people who are out there just running through money have failed because they haven’t come to terms with who they are and what they want the money to do for them,” she adds. “I see a lot of baby boomers beginning to panic because they haven’t figured this out.”
Mr. Foreman, who stared down financial collapse as an adult despite a troubled, impoverished childhood, said he knew real wealth when he saw it. “If you’re confident, you’re wealthy,” he says. “I’ve seen guys who work on a ship channel and they get to a certain point and they’re confident. You can look in their faces, they’re longshoremen, and they have this confidence about them.”
He says he can spot a longshoreman who has enough equity in his home and enough money in the bank to feel secure, and that some people, no matter how much money they have, never get there. “I’ve seen a lot of guys with millions and they don’t have any confidence,” he says. “So they’re not wealthy.”
IN the years after the Moorer fight, Mr. Foreman became much wealthier than he ever was during his boxing career. In 1999, he sold his name and his image to the manufacturer of George Foreman’s Lean Mean Fat-Reducing Grilling Machine for $137.5 million in cash and stock. He is now a proven pitchman on home shopping channels and the lecture circuit. He owns a fleet of cars, a watch collection, two homes and a ranch in Texas, and another home on the Caribbean island of St. Lucia — but he says he has no idea what his net worth is, and he says he does not want to know.
“When you start knowing, you’re scared,” he says. “I have lots of money, you know what I mean? But I haven’t found confidence like that longshoreman I told you about.” Nearly going bankrupt, he asserts, has permanently scarred him. “I will never feel secure again,” he says. “I’ve got to earn, earn, earn, earn.”
Respect every dollar, Mr. Foreman reiterated, respect every dollar.
“You can become complacent,” he says. “You can say, ‘I’m successful,’ which is the kiss of death. In America it’s hard to wake up hungry. It’s frightening. You can become complacent and wake up tomorrow totally homeless.”
Correction: Sept. 24, 2006
Because of an editing error, an article last Sunday about the reasons some rich people go broke misidentified the University of California campus where Brad M. Barber, one author of a 2001 analysis of the psychological dimension of stock trading, is a professor. It is at Davis, not Berkeley.
Das eindrücklichste Beispiel für die Macht von Einzelpersonen ist vermutlich die schwedische Währungskrise von 1931. Im schwedischen Beispiel war es Ivar Kreuger. Heute kennt ihn kaum einer mehr, aber in den späten 1920er-Jahren war er einer der bekanntesten Wirtschaftskapitäne der Welt. Die Aktien und Obligationen seiner Unternehmen befanden sich im Portfolio jedes grösseren Investors, auch bei Schweizer Grossunternehmen. 1929 war er auf dem Cover von «Time».
Kreuger begann seine Karriere als lokaler Bauingenieur, hatte dann aber den grossen Traum, die globale Zündholzproduktion zu kontrollieren. Der Ausgangspunkt war der schwedische Markt, in dem er bald eine beherrschende Stellung einnahm.
Nach dem Ersten Weltkrieg hatte Kreuger die Idee, den finanzschwachen Ländern Kredite im Austausch gegen ein Zündholzmonopol zu geben. Nach und nach übernahm er einen Markt nach dem andern. 1929 gelang es ihm sogar, einen Vertrag mit der deutschen Regierung abzuschliessen. Zu diesem Zeitpunkt dominierte er etwa zwei Drittel der Weltproduktion.
Finanziert wurde die Expansion mit Aktienemissionen, die für die Anleger hohe Renditen abwarfen. Kreuger entwickelte immer wieder neue Ideen. Ende der 1920er-Jahre führte er auch an der Zürcher Börse drei Emissionen durch. Das Publikum überzeichnete sie jedes Mal.
Doch dann kam alles anders. 1930 trockneten die Kapitalmärkte aus. Kreuger brauchte dringend Geld, um seine Verpflichtungen einzuhalten. So wandte er sich an seine alten Geschäftspartner in Schweden, insbesondere an den Chef einer grossen schwedischen Geschäftsbank (Skandinaviska Kreditaktiebolag). Er wurde nicht im Stich gelassen. Die Bank nahm im Ausland kurzfristige Gelder auf, um Kreuger langfristige Kredite zu geben.
Es brauchte nur noch einen grösseren Unfall und schon würde das Ganze zusammenbrechen. Diese Krise kam im Juni/Juli 1931. Eine Kettenreaktion kam in Gang:
Deutschland erklärte sich für zahlungsunfähig.
Die Anleger wurden nervös und zogen ihr kurzfristiges Geld vom schwedischen Bankensystem ab.
Die schwedischen Banken holten bei der Zentralbank die notwendigen Devisen, um den Verlust auszugleichen.
Die Devisenreserven der Zentralbank schmolzen wie der Schnee an der Sonne (durchgezogene Linie). Von Juni bis September 1931 gingen sie um 200 Millionen Kronen zurück.
Wenn eine Zentralbank in so hohem Tempo Devisenreserven verliert, kann sie nichts anderes tun, als die Währung abzuwerten. Am 27. September 1931 war es so weit: Schweden verliess den Goldstandard und gab den Wechselkurs frei.
Im Frühling 1932, als die Gläubiger immer skeptischer wurden, nahm sich Ivar Kreuger in Paris das Leben. Die Nachricht erschütterte die Welt. Die «New York Times» brachte die Nachricht gross auf der Titelseite: «THE MATCH KING IS DEAD»