Making a billion dollars is no easy task. In a world with a population of over 7 billion, only 1,645 individuals can boast billionaire status as of Forbes last list of the world’s richest men and women. From there, only two-thirds of those individuals were self-made billionaires. That isn’t even a ten-thousandth of a percent of the global population. If that kind of money is so rare and that hard to make, one has to assume it has to be just as difficult to keep.
There are many problems that come with this kind of money, and not all of them are the typical problems you hear about when someone acquires great wealth, such as:
– All the friends and family you weren’t aware you had before you acquired your wealth.
– The obtaining of this wealth just makes you greedy, you want more and you begin doing illegal things and using unethical loopholes to keep that wealth and make it grow.
– The headaches involved with trying to manage this much money; amounts of money that in some cases could change the world.
In addition to these problems we hear about with some regularity when it comes to having a lot of money, some people simply don’t feel right having it and they just give it away. Bill Gates and J.K. Rowling are two billionaires that feel this way. One of these two even makes the list for this very reason. They believe that even if you want to live a very lavish lifestyle (which they both do) there is only so much money you can use. After a certain point, they believe you’re just hoarding cash.
Regardless of their reasons, not everyone can ride the billionaire train forever. For many, this kind of wealth is short lived. Whether it’s Ponzi Schemes, a charitable nature, or bad investment decisions, let’s take a look at some past billionaires that couldn’t hold on to their billionaire status.
10. Vince McMahon
How He Made It: At one time Mcmahon was a promoter, announcer, and occasional wrestler in the pro-wrestling circuit. As time went on he ran and acquired a number of pro-wrestling leagues until he grew to become the majority owner of the premier pro-wrestling league, known as the WWE.
How He Lost It: In just two days McMahon’s worth dropped by $700 million, bringing him well below the billionaire status he had just barely clipped. Shares in WWE plummeted after McMahon signed a television deal with NBCUniversal for an amount far less than investors had hoped for.
9. Bjorgolfur Gudmundsson
How He Made It: Gudmundsson was a former football player that made a good deal of money in the beverage business. Most of the money he made was as chairperson and owner of both the West Ham United Football Club and the Icelandic bank Landsbanki. He was the second person in Iceland’s history to hit billionaire status.
How He Lost It: The Icelandic banking crisis in 2008 hurt a lot of wealthy men and women in the banking business. He also had a number of bookkeeping offenses that cost him a considerable amount of money to fight in the courts. Forbes magazine listed Gudmundsson as one of the richest people in the world in March of 2008, and then valued him with a net worth of $0 by December of the same year.
8. T. Boone Pickens
How He Made It: Pickens made his money in natural gas and big oil, a method that has seemed to work for a number of individuals. He was also big into corporate acquisitions and seemed to have an eye towards acquiring companies that would treat him very well financially.
How He Lost It: There are a couple of reasons that Pickens fell just below billionaire status to a net worth of around $950 million. First, Pickens is a known philanthropist who has actually given away nearly a billion dollars as it is. Pickens is one of the wealthy elite that signed The Giving Pledge to give away half of their money. The second reason is a move towards clean wind energy; A move that has cost him quite a bit as most Americans don’t seem ready to give up their oil quite yet.
7. Manoj Bhargava
How He Made It: Manoj made his money the old fashioned way: lots of jobs and working hard at all of them. After stints as a clerk and a taxi driver, Manoj started a plastics company that became a $20 million business. Most of his riches were acquired from his start-up company Living Essentials, which makes the 5-hour Energy beverage.
How He Lost It: 5-Hour Energy had a rough year when a number of heart attack deaths were reportedly linked to the popular energy shot. Bhargava is still sitting pretty with a net worth of $800 million, but he is no longer a billionaire after sales and stock plummeted.
6. Allen Stanford
How He Made It: Initially Stanford made his money through buying depressed real estate and then selling it when the market bounced back. He went on to get into finance and made money as a financier and sponsor of professional sports.
How He Lost It: He was a major fraud. This guy didn’t just write some bad checks he couldn’t cash, his entire investment company was discovered to be a hub through which he orchestrated a massive Ponzi Scheme. He was convicted of every charge brought against him, save a lone wire fraud charge. Stanford is currently serving a 110 year prison sentence as a result.
5. Patricia Kluge
How She Made It: Patricia Kluge was once known as the “Wealthiest Divorcee in History.” No one is sure exactly how much she got, but some reports claim the settlement included a payment of $1 million a year plus assets that put her into a net worth of over $1 billion. Her divorce was from media mogul John Kluge.
How She Lost It: Her wealth was lost through parties and a bad investment. Patricia Kluge decided to host parties for the wealthy and elite on her newly acquired 300-acre estate. On this estate, Kluge decided she’d use the acreage for a vineyard where she could make and bottle her own wine for funsies as opposed to, you know, selling the wine. She eventually filed for Chapter 7 bankruptcy and the vineyard was purchased by Donald Trump.
4. Olav Thon
How He Made It: Olav Thon started a real estate and hotel business that was so successful he became the single richest person in Norway with a net worth of $6 billion in 2013. This is a pretty impressive feat for a man that started out as a simple farm boy. These humble beginnings may explain why he left behind his billionaire status.
How He Lost It: Thon didn’t just donate a large sum of money to a charity, he donated the ownership of his entire empire to his own charitable foundation. He still controls the company but all profits now go directly to charity. Thon isn’t entirely crazy though. He still has $250 million sitting in the bank.
3. Alberto Vilar
How He Made It: Vilar obtained a Masters Degree in Economics and went on to use that knowledge to start an investment firm. He largely invested in technology funds.
How He Lost It: A number of reasons can be cited for Vilar’s losses. He donated a lot of money to opera houses, classical music, and ballet. It’s claimed he gave nearly $250 million to these arts. Unfortunately, Vilar was also a fraud. Through his investment firm, Vilar had been laundering money in addition to participating in securities fraud, mail and wire fraud, and investment advisor fraud. It’s alleged that he had been doing this to cover his huge philanthropic commitments.
2. Sean Quinn
How He Made It: Quinn is a business man and conglomerateur who definitely didn’t put all his eggs in one basket. In Ireland he made money in the hospital industry, hotels, radiators, plastics, and bank investment. At one point he was considered the single richest person in Ireland.
How He Lost It: Quinn didn’t just buy shares in the Anglo Bank. When Quinn put his money into Anglo Bank, he invested in Contracts For Difference. If the shares had gone up, he would have made billions. Since they went down, he was hit for five times his initial investment.
1. J.K. Rowling
How She Made It: Rowling is a renowned author who clipped the billionaire mark due to the popularity of her Harry Potter books and film franchises.
How She Lost It: She simply gave enough away to charity that it put her under the billionaire mark. It’s said that Rowling had given nearly $160 million dollars to charities. In addition, Britain has some pretty rough taxes, which also played a hand in her boot from the club.