Haven’t we all had a fleeting dream of being a millionaire – or, better, a billionaire? With seemingly endless amounts of spending money, power and prestige, the allure is understandable. But let’s go ahead and put a dampener on this little parade: Though from an outsider’s point of view it might seem like, materialistic wealth doesn’t in fact make you invincible. Thousands of wealthy people have made their fortune through fortunate gambles, and have lost is through unfortunate ones. Some of these unfortunate few were unprepared for their wealth, and without a strict accountant breathing down their neck they spontaneously blew it all on a luxurious lifestyle without investing. Yet others made their wealth through immoral means, and upon discovery were forced to repay their ill-gotten gains – and then some. Below, we’ve selected five of the most high-profile millionaire – and billionaire – crashes. People who shot to the top of the economic ladder, only to come crashing back down. This may well serve as a reality check for all you dreamers out there: Sure, it’s absolutely amazing to dream of wealth, but keep it all in perspective or you may end up like these five unlucky men. Remember, the higher you climb – the harder the fall. But it’s not all doom and gloom, either. Some of these men lost it – and got it back! From the success stories to the tragedies, we’re counting down five of the biggest individual financial crashes of all time.
5. George Foreman: $250 million
Foreman comes in at number 5 on our largely unhappy list as something of a success story. Retired boxer and current entrepreneur, George Foreman, went from rags to riches, lost it all – and came right back into the game. Born in Houston and living what he described as a troubled youth, he dropped out of school at the tender age of 15 before joining the Job Corps, which provided him with vocational training and education. He later moved to California where he pursued a successful career in boxing. He went on to receive various titles and awards, including the 1968 Olympic gold medal in heavyweight boxing, and defeated the then-undefeated Jamaican boxer, Joe Frazier. After losing to Muhammad Ali in “the Rumble in the Jungle” tournament, he announced his retirement.
Unfortunately, by the 1980s, Foreman was verging on bankruptcy after blowing his heyday gains. He’s described this as the most terrifying time of his life. Fearing ruin, he surprised the entire world by re-entering the world of boxing at 45 years old. He quickly went on to regain his Heavyweight title and became the oldest Heavyweight Champion in history.
Of course, ass well as his reborn boxing career, Foreman became an entrepreneur selling his famous George Foreman grills – which brought him almost $200 million in profits, substantially more than what he made as a boxer. Through determination and a fair bit of creativity, George Foreman came away from the brink of ruin. He may have lost everything, but he did one hell of a good job of getting it all back, and then some.
4. Allen Stanford: $7 Billion
Allen Stanford engineered one one of the largest frauds of all time, and had a very public – and very humiliating – fall from grace that lost him his entire wealth, and landed him in prison. Stanford founded a company that turned out to be a massive Ponzi scheme (AKA a particularly nasty way of shamelessly stealing) which involved paying back investors with the investments of others .
A born and raised Texan, Stanford graduated with a B.A in finance from Baylor University. His first success came in real estate, after a failed bodybuilding gym enterprise. He opened many banks in the Caribbean in the 1980’s, and contributed millions to Antigua and American politicians.
In 2009, Stanford’s investment company, Stanford Financial Group, began to come under scrutiny from the FBI and various other corporations. Later that year, he was arrested on account of embezzling billions of dollars and falsifying the companies’ records to hide the fraud. After almost three years of deliberation and delayed trails, Stanford was sentenced to 110 years in prison, and an almost $6 billion fine.
3. Jordan Belfort
If you’re in love with Leonardo DiCaprio and have seen his newest film, The Wolf Of Wall Street, then you’re probably already familiar with his character – Jordan Belfort. Jordan is a one-time millionaire and when we hear his story of inexplicable greed and fraud we can’t help asking ‘why?’
Belfort was born into a family of accountants, so we can see from whence his future career spawned. He started his career as a stockbroker in the 1990s by founding Stratton Oakmont firm selling penny stocks. Sounds pretty innocent, right? Right, except that it was a penny stock boiler room, which is a rather questionable type of call centre that sells investments – and dubious ones, at that. With this business alone, he defrauded investors of more than $110 million.
During the glorious years where his company’s net worth was valued at over a billion dollars (that $1 billion of illegal money), he developed the lifestyle of a party animal, filled with all the trappings of women, champagne, private aeroplanes and drugs.
Finally, in 1998, Belfort was charged with securities fraud and money laundering. It was after thousands of complaints reached the office of Alabama Securities Commissioner Joseph Borg that Belfort was prosecuted. Belfort, knowing what was good for him, cooperated with the FBI and only served a little over 2 years in prison. He still had to pay back the money he swindled from the stockbrokers. In the years that followed, he wrote 2 memoirs about his criminal escapades, as well as making a living as a motivational speaker. With one of his memoirs adapted in Martin Scorsese’s latest blockbuster, Belfort is on track to reap his millions back – this time, honestly.
2. Sean Quinn
Irish businessman Sean Quinn, born John Quinn, was once the richest man in Ireland. During the boom years in Ireland – the years preceding 2000, an era known as the Celtic Tiger – Quinn made huge money. But he became, simply, a tragic victim of irresponsible investments and the Global Economic Crisis. He first established himself in the business world during his dealings with the Irish sporting organization, the Gaelic Athletic Association or G.A.A. With the contacts he developed there, he began a business selling gravel. In 1996, Quinn founded the Quinn Direct insurance business, which brought in hundreds of millions in profits in its first six months. In 2007, he saved BUPA Ireland -the second biggest health insurance provider in Ireland – from leaving the Irish health industry, by buying it for $200 million. In that same month, he increased his share in the Anglo Irish Bank to 5%, which was equivalent to about $770 million. During the good years, Quinn was positively rolling in millions.
Ireland’s banks and real estate market were dancing on the proverbial volcano, and in 2008 the recession hit this island nation particularly hard. This would inevitably be the Quinn family’s downfall. When the Anglo Irish Bank nearly collapsed, the family’s wealth plummeted by 2.8 billion. Hot on the heels of this collapse, a controversy emerged when Quinn’s Insurance company was fined a record $4.4 million due to the company’s failure to notify regulators about certain loans.
Billions of dollars in debt, Sean Quinn was finally forced to give up control of his company. Quinn got carried away on the wave of wealth-mania in Ireland during the boom years, and made bad decisions blinded by the good times. His family had a public fall from grace and lost billions, so the lesson here is; think long-term, because if things are looking too good to be true then they probably are.
1. MC Hammer
It’s Hammer Time! If you were around in the late 1980’s to early 1990’s (actually, let’s face it, even if you weren’t) the hit single by MC Hammer, ‘Hammertime’, could be heard just about everywhere. On your radio, in the streets, on people’s lips… These days, we’d say it was viral. For a moment, MC Hammer reigned supreme over the pop music scene. And in that moment, he went on a crazy spending spree which would lead to his ruin.
MC Hammer, born Stanley Burell, spent his early life in East Oakland, California with his mother and five other siblings in a cramped three-bedroom apartment. The young future rapper, in an attempt to make some money, would sell baseballs, as well as dance. At the age of 11, he was discovered by Oakland A baseball team owner, Charles. O. Finley, and was hired as a bat boy. Though he played for many years and dreamed of pursuing a professional baseball career, he did not make the cut for the San Francisco Giants. Burell finally got into music after a stint in the Navy.
Through the course of his career, he has released 11 studio albums, 5 compilation albums and over 30 singles. Though his first album Feel My Power, released in 1988, only sold 60,000 copies in the US, his career peaked in 1990 with the release of his album Please Hammer, Don’t Hurt ‘Em. It certified diamond in the US and featured his two most popular singles, Hammer Time and Too Legit to Quit. However, this was not to last.
At the peak of his career, his net worth was a little over $30 million. Despite his success, speculations of money problems began to surface when there was a 3-year delay between his album Too Legit to Quit and The Funky Headhunter – due to the fact that MC Hammer had spent most of his money on a huge entourage, and enormously luxurious personal indulgences and excesses. Soon, the rap artist was $13 million in debt. With decreasing album sales, unpaid loans and a massive payroll, he filed for bankruptcy in 1996. Nowadays, he’s released a few singles and albums, but none matched his earlier success. He has dabbled in other business ventures, and became a pastor in California.
MC Hammer is the classic example of ‘too much, too soon’. He acquired money and fame in so quickly he simply didn’t have time to get used to it. He also surrounded by people who were only interested in his money – and not his well-being. MC Hammer’s story demonstrates that success certainly doesn’t equal invincibility.
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