I read a story from an anonymous guy who lived exactly that scenario. He could still look at his home gym, jacuzzi and seafront view on the day he shared his story 7 years ago.
But his fate was sealed. Bankruptcy was imminent.
The story gives us a unique look into what enormous wealth is like. Don’t cry for him. No. Learn important money lessons from him so you’ll have enough cash to live the good life.
How the disaster all went down
You might wonder how a successful person could lose so much money in a short time. Like, did he bet it all at the casino? Nope.
While he doesn’t say what he did for living, it sounds like real estate development from his description.
The disaster that took his money away happened because a few of his employees stuffed up some basic math.
He says he delegated too much work to inexperienced people. Those tiny math errors added up to hundreds of millions of dollars. This meant he needed liquid cash, fast.
Most billionaires don’t have stacks of cash lying around. Their wealth gets tied up in assets that are hard to sell and move.
The billionaire’s first bad project cost $5M more than was budgeted. Then five more projects had similar calculation errors.
The nail in the coffin was his wife.
She divorced him and took 50% of his net worth.
That alone wasn’t enough to bankrupt him. What caused the fast demise was his reputation. Investors got angry at his employees’ mistakes. They began to sue.
As more rumors spread about his financial errors, the media got hold of the story. They wrote daily articles about his demise (that wasn’t guaranteed).
Investors of his other good projects got cold feet and backed out. What he said led to his “burial” were his real estate bank loans.
He tried to negotiate with the bastards but they wanted him to bleed.
All he could do was sign over his entire real estate portfolio to them. They agreed. Then he had to go to their office to sign the documents. It was the hardest signature he ever had to write. It sealed his financial ruin.
The part I find odd is after he gave all his properties to the bank, they had to sell them. They let him live in the properties while they did.
So he had the torture of another 1–3 months to enjoy the luxury life.
The crazy twist to the story
Before we heard about employees making basic math mistakes.
One key person made the biggest mistake. The former billionaire says he has no has to anger toward him.
After all, the employee was his son!
His son lacked guidance from his father. Despite the errors it wasn’t his son’s fault. His father just wants him to make a comeback and not feel guilty. He wants him to go on to make him proud.
Let’s get to the lessons we can learn from the former billionaire.
1. The social dilemma of poverty
Many of the man’s friends loved to stay at all his wonderful properties. One of the struggles he faced was how to answer all the questions he’d get.
“So are we still doing Christmas at your Aspen property?”
What can he say?
“Sorry, I’m a broke bum now, I lost all those properties.”
Having to explain the heart-breaking story over and over makes a grown man tired. It’s like reliving the torture again every day.
Once you become a billionaire you get inducted into high society. These pretentious douchebags live and die by their wealth. Trying to escape this circle once you’re in it is hard. You’re best never to join.
Don’t cry for money. It never cries for you — Kevin O’Leary
2. You don’t appreciate the luxury after a while
The man says a Porsche feels like a basic Ford pickup truck after a while.
He says you never sit there and admire the gorgeous dashboard or take pictures of it. You’re always running late for a meeting so your mind is in another world.
Your mind is filled up with staying-wealthy-tasks instead of present moment-awareness of all the beauty.
You just get accustomed to wealth and use and abuse it like an ex-lover.
That’s how I felt when I lived the luxury life in my 20s. I had more money than I could ever spend and it went to my head. Wealth changed who I was and turned me into a giant a-hole.
Who you become is more important than the rich life.
3. The unexpected benefit of wealth
When you’re poor there’s more risk. It doesn’t take much to have your food and shelter taken away.
The anonymous former billionaire says the hard part was the risk he faced. When you have lots of money it gives you security. You know you can make plenty of mistakes and still be fine.
While for some this provides security, for me, the rich life I used to live caused me to take unnecessary risks.
Wealth affects everyone differently.
4. Being dirt bag rich doesn’t make you happy (SURPRISE!)
We can’t talk about being rich without talking about happiness.
The former billionaire says average people think being rich will automatically make them happy. He says it doesn’t.
Don’t confuse happiness with dopamine.
It’s more like a short-burst drug he says. The big boy toys you get to buy (cars, watches, fancy clothes, luxury holidays) feel good for a brief time. They produce a limited release of dopamine.
Then you’re back to feeling normal again and chasing the next high like a heroin addict. It’s never enough.
Money can’t sustain long-term happiness.
Further downsides of being rich
- You still feel lonely at times. Because most people aren’t rich, you can’t relate to them and you seem like a creepy weirdo.
- You struggle to find authentic friends. Everyone is so fake at the top end of town.
- The opposite sex often only craves you for the money.
- It feels as though everyone automatically likes you. This is false. They like how your money makes them feel. So you attract plenty of gold-diggers.
Some say money solves problems, others say money creates different kinds of problems.
5. The greatest joy of going from billionaire to broke
What’s odd about going from billionaire to broke is humans are incredible at adapting. The former billionaire says he knows he’ll be fine.
He intends to build his empire again.
Rather than look down on his failure and let it hold him back, it led him to become excited. It’ll be a hell of a ride as he rebuilds. The joy of getting it all back again brings much more happiness than being rich ever could.
In other words it’s the journey not the destination. Surprise, surprise. Passion for his new future is what got him through this hell.
Let your big goals produce joy by enjoying the process.