Young millionaires and those with new money are far more likely to use a financial advisor, as compared to the baby boomers, because they have seen their older counterparts struggle through the dot com downfall of the early 2000’s and the recession of 2008. Self-made techie millionaires, for instance, are not about conspicuous consumption at all. Their idea of money is to use it to set off the next stage in their career and make smart investments. When they do spend, it is on things like wine, food and intergalactic travel rather than sprawling houses. Many of them become angel investors in ventures made by friends and use DIY brokering firms to make more money.
Lottery winners and overnight millionaires of all ages have different tendencies. They are more likely to buy new homes, cars, holidays, property investments and extend support to family and friends. Studies have shown that instant millionaires are liable to lose their money as quickly as they earn it – the figure may be as high as 1 in 3 or 70%. The younger winners among these are more circumspect, and therefore less likely to splurge.
Then there are the Gen Y millionaires in entertainment, many of whom do have quite flashy lifestyles. They are likely to spend more money – on a second home, boat, country club membership, first class flights.
However, in general, what these trends suggest is that young millionaires are less likely to go broke than their counterparts with older money because they have seen the older generation struggling in recent years.However, they are still more likely to spend that money rather than save it for retirement. It’s what they spend it on that usually differs.
There still are the old money-draining traps that a few of them fall into like the baby boomers did, such as loose spending habits, poor budgeting, providing friends and family with too much help and losing money in failed business ventures.
So, here’s a look at 10 millionaires that are going to end up broke (some of them are instant millionaires) if they aren’t careful.
9. Harry Styles
Today the 19-year-old pop sensation and member of One Direction, Harry Styles is worth $23 million. He seems to have a gambling streak that had him losing a small fortune when he turned 18 and then in September, 2013 at a casino in Perth. We all know where that can lead to.
8. Colin and Chris Weir
The Euromillions winners Colin and Chris Weir won $258 million in July 2011 and spent it on a sprawling $1.3 million home on a hillside, a Mercedes worth $141,000, luxury cars for friends, a personal Michelin chef, and even a $1.6 million donation to a political party. Will these instant millionaires leak their fortune away?
7. Amanda Bynes
The former child star Amanda Bynes is presently worth around $4 million and her fortune is quickly dwindling. Small wonder, considering she handles her own finances and spends $3,500 a day for medical treatment. Her parents worry that she is spending millions of dollars on drugs and heading towards a meltdown.
6. Justin Bieber
The pop-star has a net worth in excess of $130 million, and the star is as flashy as his fortune. His lifestyle involves a lot of partying and a report suggested that Justin Bieber spends as much as $50,000 a week. This may be fact or rumor, but while Bieber may not be leaving anytime soon, he may still need to be careful with his money.
5. Miley Cyrus
Another young pop star with a penchant for spending, Miley Cyrus, who is worth $150 million, is a shopaholic. Let’s hope her financial advisor helps her keep her fortune healthy.
4. Floyd Mayweather
Boxer and welterweight king Floyd Mayweather has an estimated net worth of $172 million. However, the sportsman loves to flaunt his money, but doesn’t have any investments or source of income outside of his own fights. This can be a problem in the future for him, unless 50 Cent succeeds with his boxing promoting plans.
3. Britney Spears
Britney Spears has almost been there – her hedonistic lifestyle has already brought her $100 million fortune down to $40 million and there was a time when her parents feared she could be out of money. This may have made the former star conscious enough to restrict her lifestyle, but the future will tell.
2. Lady Gaga
Cash Money records honcho and big spender Birdman may be worth $170 million, but he doesn’t balk at spending $8 million on a car and has a tendency to gamble. With his flamboyant lifestyle, it remains to be seen how long he can stay away from an MC Hammer situation.
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