Yahoo Finance Ex-Millionaires Are Revealing How They Lost All Their Money, And I'm Actually Speechless
Reaching millionaire status is a feat people dream of achieving. But unfortunately, having millions of dollars doesn't mean you're invincible, as evidenced by redditor u/HypnoticMushrooms, who asked people to share how they or someone they knew became an "ex-millionaire." I'm genuinely surprised at how some of these people weren't responsible with their money. Here are some of the most insightful stories:
1."COVID-19. I built a business that was given a valuation of a few million back in January, but the industry went down, and I'm doing all I can now to avoid bankruptcy."
2."I dated a guy who unexpectedly inherited $6 million. His parents had been killed in a drunk driving accident when he was a baby, and so their life insurance and money from a legal settlement sat in an account collecting interest for 18 years. He got a call from a lawyer on his 18th birthday, and that's how he found out about it. He went nuts. Every time I saw him, he had a new car. He bought an extravagant house and insisted on taking these big vacations. He would go to our local comic shop and buy EVERYTHING. His spending was a major factor in why we broke up. It was all too much, watching him blow through money like that. He didn't invest any of it. He blew through all his money in five years. Last I saw him on Facebook, he was destitute."
3."I built a business worth around $3 million, had a house worth $1.4 million, investments worth more than $2 million, and had four nice cars. Divorce laid me low. An ex-wife, a lawyer, and a judge stripped me of at least 75% of that. I was left with a Miata race car, a bit of money, and 51% of my company. And I still had to pay alimony. I gave up. I negotiated my way out of alimony by giving up more of the company and liquidating everything else. I bought a boat and fucked off. 26 months later, I sailed back into my life and started over. I've earned enough to live a modest retirement, and that's where I am today. Don't get married, boys. I've done it twice. The first time was a disaster, and the second time was an annoyance. Just my opinion and experience."
4."A family member of mine did very well in tech. He was an incredibly smart physicist but a horrible businessman. He retired, having made his millions, then bought a beautiful antique yacht. 10 years later, he's in debt and has struggled to sell the boat for years. His family is so pissed at him. TL;DR: don't buy a boat."
5."I was close to being a millionaire after selling my company to a bigger competitor. I reinvested most of it since I didn't have much use for the money, but then I got scammed for about half a million on buying some real estate. I basically bought a fantastic holiday destination facility from someone who did not own said fantastic holiday destination facility. And by 'bought,' I mean that I'd put a substantial down payment to keep other interested parties at bay. Classic."
6."My grandfather died and left everything to my mom. Then, my father died and left everything to my mom. Mom always thought she was a smart gambler that would win. As proof, she won maybe $25k from the lottery once and went out and bought a car. After that, she was hooked. When Dad was alive, he didn't let her gamble; he kept it under control. After he died, my mom found a boyfriend — a former bookie who was a 'professional' gambler. They used to like going to casinos, squandering every penny and more. Then, my mom sold the big house for another $500k and bought a small condo. She took out a home improvement loan for it for $50k, but no improvements were ever made. Casinos and lottery tickets. A cool million or two gone."
7."My dad is an ex-millionaire. He's a wizard at starting successful businesses, but his problem is that he can't let them go. He's the boss/owner who never hires a manager who isn't family because he doesn't try anyone else to run the place. 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."
8."Divorce. I was a millionaire, and my divorce nearly sent me to insolvency. I buckled down and worked my butt off and have since kept my millionaire status. Don't underestimate a bad divorce's pernicious impact on net worth."
9."My dad made some really shrewd stock market investments after he retired. They were options for an oil refiner at a time when the US had a real shortage of them. My dad had done some research on this and studied the situation carefully. He got rich to the tune of maybe $2 million. He could have been set for life. My dad was already a really smart guy, but he took things to the next level and bought a lot of newer options within the same company. I suggested diversifying and putting a bunch of money into something closer to an annuity or another conservative investment that would give him plenty of income forever. Then, he'd always be rich. Well, he's 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 try and save him from himself. It pains me to see how it played out for him because he did a lot of things right in life. He deserved better, but there's no 'deserve' in securities investing. Moral of the story: you aren't an investment genius after your first blockbuster win. You need a track record."
10."I know a guy who made a fortune during the housing boom in the 2000s. He took all the money he made and put it all back into the real estate market. Then, housing crashed. He never recovered."
11."My great-grandfather started a candy company that serviced most of Wyoming Valley in Pennsylvania. My grandfather (his son) sold the company for upwards of about $100 million. My grandfather 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 children. Toward the end of his life, my grandfather reconnected with my mother and met me, but then developed brain cancer. He decided to cut his wife out of his will and gave all his money (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 was to sign and mail back to his lawyer. But he asked his wife (the one he was screwing over) to mail the new will, but it got 'lost.'"
"My grandfather died a few days later, with my mother unaware that the will change hadn't gone through. She paid for the funeral only to learn afterward that the will was never changed. She went to confront her stepmother, only to find that she and her sons had already flown to Florida, taken the money, and moved. My mom tried to sue, but due to state laws and lack of written evidence, the suit couldn't get off the ground. And that's how my mother lost a multi-million dollar inheritance and got stuck with a $50k funeral bill."
12."I have a relative who is a self-made millionaire many times over. He was the hardest-working person I've ever known, and 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. Well, this wasn't enough for him, so he started renting out his properties to people who used them to grow pot because they'd paid him more. His granite company was used to ship the pot across state lines, and now he's sitting in jail, facing a minimum of 10 years. He had shipped the pot to nine different states, seven of which weed was still illegal in."
13."COVID. My parents had tons of money in stocks and lost their millionaire status due to the crash that happened. At one point, they were losing tens of thousands in a day. Thankfully, with the drug trials being successful, my parents are starting to make back their money, though they're still not making the amount they were before."
14."I have a rich uncle whose father owned a big chain of gas stations and some oil fields in Turkey. When his father died and my uncle took over, he didn't care about the businesses. He just partied and squandered everything. Like, he bought a new luxury car and boat every week. Every few months, he'd move into a new luxury home and buy new furniture. After some years, the business collapsed, and he had to sell everything to a big US corporation when hitting insolvency. Everyone in the family hates him now. But guess what? Despite being an unproductive loser, he managed to marry a bank director. She is rich as hell and continues to sponsor his dumb lifestyle. For some people, consequences just don't seem to exist. I mean, how can you go broke owning oil fields? It boggles my mind."
15."My parents were both smart people. They went to the best universities and graduated with B.A.s and Masters in architecture. They went on to design very high-end apartments and homes all over Australia and saved up enough money to open a Michelin-style restaurant on the water. It was a hit, and they became incredibly wealthy. My parents went all out. They 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 a yacht, and took my sister and me traveling worldwide. But then, one day, a flood came and took the restaurant completely underwater, destroying close to a million dollars worth of supplies and the kitchen. They were ruined. They had to sell everything just to cover the cost of the restaurant. They're now 70, live in a small apartment, and are working to pay off all the loans they owe."
16."My dad had over $20 million in a business with 12 locations and three more openings on the way. An employee who'd been caught selling drugs fabricated an elaborate story that he'd gotten drugs from my dad's company and that the whole company was a front for cartels. My dad spent a lot of time in Mexico back in the day and had a criminal record, so that was enough for the DEA to raid him. They stole all the computers, terrorized the employees, and raided every one of the locations and our home on the same day. They found nothing. Absolutely nothing. All papers were in order; no indictments came. Regardless, most of the employees and management quit due to the investigation. My dad had to close most of his locations and sell them after less than a year just to pay for the lawyers helping to defend his case."
"The worst part is the DEA won't admit that they found nothing. They've left the case open indefinitely, making my dad unable to work in his field. His lawyers said that the prosecution privately asked him to find something wrong that he could plead to so that they could save face. My dad won't lie, so they won't close the case. The government took my dad's life's work and savings and ruined hundreds of others' lives. We have zero recourse."
17."My best friend was a national sales manager for a big tech company. His team invented the bomb-sniffing tech now used at airports, designed the computer network for a baseball stadium, added a monitor to an attack helicopter, and sold a lot of storage equipment to the Intelligence Community. He made a quarter of a million a year and had a million in company stocks. Then, the tech bubble burst. His company froze his stocks and refused to let him sell them. He watched them dwindle to pennies. Then, when he was about to make a sales trip to London, he was laid off."
"He got in his limo and asked his driver for a job. He's been driving limos for over a decade now. He didn't downsize quickly enough; he still lived like a millionaire for a while and went through his savings. He's afraid that after driving limos for so long, he'll never get another high-paying job again. Even though he loves his job, he's embarrassed to put 'limo driver' on his resume. Although, he doesn't want to return to a corporate job anyway."
18.Lastly: "My first husband made a million a year. He was enjoying life — spending frivolously, but he made enough that it didn't matter. We divorced amicably; there was no alimony or 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 it was worth it. Money won't make you happy, but the lack of it can destroy you. The kids and I take comfort in knowing that there was truly nothing else possible for him or us to do. His millions bought his kids two more years with him, and I'm glad that he enjoyed his life while he could."
If you or someone you know has been a millionaire but then lost your "millionaire status," what happened? If you have a story you want to share, comment below, or you can anonymously submit it using this form!
Note: Submissions have been edited for length and/or clarity.
