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March 10, 2012

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I agree 100% with your advice about spending less the one earns. But I'd point out that some of these people--Mark Twain, for example--went bankrupt attempting to do what our society lauds most today: Investing in new technology. Twain invested heavily in what was modern technology for the times--the Paige Compositor--a machine designed to replace labour intensive typesetting. It didn't catch on, and Twain went bankrupt. If it had worked, we might well be praising not only Twain's writing skills and wit but his investing acumen as well.

In short, we wouldn't want to counsel the future Steve Jobs of the world not to spend more than they earn, would we? Risky investment is crucial to capitalist economies, me thinks.

Thanks.

It is a very interesting post. I think it's important to convey the idea of ​​the need to save, along with the idea of what to do with their savings. If deposited in a bank, will receive 1.5% per year. Therefore, it will have many temptations to "dispose" of their savings and spend it. It is essential that these savings will become an investment. To generate additional income (passive income?) Or a substantial increase in the equity of these people. Most of these alternative investments and happily so there are many tools that can help people.

See, that's the thing. There's always arguments that you never get rich from spending less, only making more. False, clearly! Granted, these people were already rich.. so I guess, what I'm trying to say, is both factors contribute to the wealth of an individual!

I agree with Daisy's comment--spending less is the key.

I had known that some of these people had financial problems, but some are quite surprising. You'd think that some made so much money that it would be quite difficult to spend it all. I guess that's where lifestyle creep comes into play. They probably felt a lot of pressure to really show off their money and spend lavishly. Then throw in the people looking to take advantage and it can be a dangerous mix.

Along with spending less than you earn, you have to invest the rest.

They may have lost it all at one point, but I haven't heard of any of them ending up in homeless shelters so it looks like they've bounced back quite nicely. They're certainly doing better than the average American (excluding the ones who have passed on, of course).

If you look at the list it is mostly entertainers that made money off their talent.

There talent was not on how to save and keep that money.

I think it is also true for ther people that win the lottery. They got all that money from luck. I hear alot of people who win the lottery will lose alot of that moeny the same way.

I knew about some of these, but others were a complete surprise to me. I simply cannot fathom how one can have tens or hundreds of millions of dollars and end up bankrupt. You don't even have to be able to manage the money yourself, just find someone else who is capable.

i wonder how hard it is to go bankrupt without having a vice.did any of the people on this list lose thier fortunes on a bad business deal?

I don't think Gary Coleman made a ton of money. He was on TV for a few years as a kid but that was about it. He ended up suing his parents for misappropriation of his trust fund and got $1.2M from them. Thats a lot of money but not exactly 'stinking rich' level.

How about that mental giant, Wesley Snipes-who decided he didn't have to file income taxes, what a fool!

I agree with you about the reasons they lost their money. There also is often another reason--they become friends with or romantically involved with those who are only after their money. Often they can't see this and will strongly defend the person being in their life.

Reminds me of what Thomas J. Stanley said in The Millionaire Next Door - "Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend."

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