Ex-Millionaires Break Down Their Riches To Rags Stories
Image by Foto-Rabe from Pixabay

Most people would admit the epitome of the American dream is to make a million dollars with hard work, dedication, and definitely not because they were given a loan from their rich father. However, ask anyone who's currently a millionaire the hardest part of becoming a millionaire is holding on to being a millionaire. It's incredibly easy to lose your foothold, as any of the stories below illustrate.


Reddit user, u/HypnoticMushrooms, wanted to know how not to handle your money when they asked:

Ex-Millionaires of Reddit, what made you lose all your money?

An Expensive Habit

$1500 a day drug habit got me high for a few years. Then the other half was when the dealers infiltrated and took me for 10's of thousands at a clip. Oh and a sibling stealing 400k was a dent as well. It's truly a miracle I'm alive. 9 years removed and finally dug myself out and back on top.... kind of lol

JooseyJayrod

Wealthy Overseas

Well, I see a lot of stories here, but here's one that's a bit different. We moved from the USA to Lebanon after college in order to be with my husband's family, they were close. Surprise, his parents died before we could get there, his dad a few months before we left and his mom unfortunately passed away during our flight and was buried a few hours before we arrived. This was not a good omen. However, we had moved every last possession with us and were determined to stay nevertheless.

After 30 years and close to retirement, we had several houses, apartments, good jobs with benefits and ample pensions. It had been a tough road and we had really starved at first. Now, we were looking forward to living where we wanted, whether in the USA or Lebanon, and living off of a modest retirement income.

All that was wiped away due to the current economic disaster in the country, worsened by covid but mainly due to financial mismanagement of the country and corruption on a grand scale pretty much unparalleled in modern history.

Everyone in Lebanon wants to emigrate now. There are no renters with money to inhabit our apartments. The lira is worthless, and our pensions are worth almost nothing. We could have spent those years in the US building up 401ks and buying a home.

mistmanners

A Rapid Change

My dad. He was extremely successful early in his life. Skipped university and went straight to work. Had multiple businesses in his mid 20s. Became a millionaire before turning 30. My 3 siblings and I had a very comfortable life. We had a very large house, chauffeured cars and several house help.

How did we lose everything? Gambling. A friend of my dad introduced him to gambling. And he was instantly hooked. Within 5 yrs we lost everything.

We're lucky my mom had some savings and got a house of her own so we didn't end up homeless.

Our life are much better now, thanks to my mom. And all of us avoid gambling of any sort. We'd refuse even for a 10$ bet.

Genestah

Keyword: Diversify

My dad, not me. He made some really shrewd stock market investments after he retired. They were options on an oil refiner at a time when the USA had a real shortage of them. My dad had done a lot of 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. He has a PhD in mathematics and was a highly respected big-brain professional all the way back into the 1960s.

However, he thought this took him to the next level. He bought a lot of newer options in the same company. I suggested to him that he diversify, put a bunch of money into something closer to an annuity or another conservative investment that would give him plenty of income forever. I told him if he did that, he would always be rich. Well, he is 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 save him from himself. But who was I? It pains me to see how it played out for him. He did a lot of things right in life. He deserved better, but there's no "deserve" in securities investing. Morals of this story:

  1. You aren't an investment genius after your first blockbuster win. You need a track record.
  2. Diversify.

Unable To Let Go Of Control

My dad is an Ex-millionaire.

He's a f-cking wizard at starting successful businesses...

His problem is he can't let them go. He's the boss/owner who never hires a manager that's not family because he just doesn't trust anyone else to run it.

He drove 3, 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.

xxkoloblicinxx

A Little Too Honest

I built a business worth ~3 million, had a house worth 1.4 million, Investments worth more than 2 million, 4 nice cars.

Divorce laid me low. An ex wife, a lawyer, and a judge stripped me of at least 3/4 of that. Left me with a Miata race car, a bit of money and 51% of my company. Still had to pay alimony.

I gave up. I negotiated my way out of alimony by giving up more of the company, liquidated everything else, bought a boat and f-cked 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, it ain't worth it. I've done it twice, the first time was a disaster, the second time was an annoyance.

Just my opinion and experience.

I'm way too drunk and shouldn't have posted. Anyway. There it is.

_effed_up

Oh Yeah, The Worldwide Pandemic.

Covid. Built a business that was given a valuation of a few million back in January, but the industry is now down 80% and I'm doing all I can to avoid bankruptcy.

throwawayletsgetreal

Take Half The Money And Run

Divorce.

I was a millionaire, got divorced which nearly sent me to insolvency, buckled down and worked my butt off and am re-millionaired.

Guys, don't underestimate the pernicious impact on net worth a bad divorce can have.

Erioph47

So Close...

Crypto millionaire. Still worth a lot, with my accounts about $850,000 today (I have a lot of xrp) But in 2017 I was worth about 3.5 million before the crash. Lowest was $300,000. I'm a hodler so o don't day trade usually.

ProfRichardson

...Yet So Far. Maybe In An Alternate Timeline?

Hypothetical millionaire.

I bought $100 worth of bitcoin when they were about $1 each. I sold them when they were about $2.50 each and was so happy I made money from "internet coins".

As of the moment I am typing this those coins would be worth $1,855,000.

Dicktremain

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