How not to "invest" $14 million

[Focus]

Yes, it's another one of those riches-to-rags stories, related in this New York Times article. And then to cap it off:

He is furious at the banks and the bankers, who he thinks gave him bad advice, and he still sounds angry at his brother and others who decided to sell the company and who he says gave him little voice. Some of them got more than $100 million each, he said, while he got $14 million...

 

[Khan]

Yes, it's another one of those riches-to-rags stories, related in this New York Times article. And then to cap it off:

**** happens.

I could handle $14 million of **** with no problem.

 

[LOL!]

Probably more interesting is what is not reported in the story.

I will take a wild guess: This guy was the black sheep of the family and not involved much in the family businesses. He got his money from the sale of the business just because he was related and not through any hard work of his own.

He was probably in rags before he got the money anyways. He was probably always blowing money his whole life. Clearly, his brother and BIL don't care too much for him. There must be a reason.

It would be interesting to know about the years before his good luck happened.

 

[BellBarbara]

I was coming to post this. I am so sick of reading about these idiots. I save my sorrow for people who are truly disadvantaged by location, upbringing, etc.

Speaking of which, has anyone watched the show "Downsizing" on WE? It's the story of another stupid couple with 7 kids who spent their life away. They met with a financial planner who advised them to stop spending $500 on dinners out since they were barely able to pay their rent.

 

[freebird5825]

In the same spirit of recently adding this emotion

are there any "tiny violins with tears" emoticons out there?

 

[FinanceDude]

"Only" $14 million? Sounds like those sad luck lottery winners.........

 

[FIREd]

Oh, gimme a break. Thankfully for him, ridicule does not kill...

 

[Dimsumkid]

Sounds like the American dream to me....keep spending like there's no tomorrow. Guess he didn't care to budget for anything.

 

[FUEGO]

“Sometimes, things don’t work out.”

Nope.

Sounds like the guy lived the high life for 12 years. That's about what $10 million buys you these days I guess. I guess spending $6-8 million on various forms of housing and hundreds of thousands on purchasing horses when you "only" have $10 million isn't such a good idea.

 

[Nords]

Which one of us E-R.org cheapskates is offering only $1.25M for his gazillion-dollar lake estate?

 

[clifp]

Which one of us E-R.org cheapskates is offering only $1.25M for his gazillion-dollar lake estate?

I think the ultimate fund raising challenge, would be trying to raising enough money from the ER forum To keep poor Mr. Martin and his family in the house. I've got to say that $3550/month for the mortgage of that place seems like a pretty good deal.

 

[tryan]

We've vacationed in the Adorandaks every summer for the last decade (family reunion at Otter Creek). Anybody dumping 4.5 million in that neck of the woods is incompetent and getting robbed blind.

The whole area is a throw back to the 70's ... kid's golf free, $1 ice cream cones, $1.25/string bowling, $5/car load drive-in movie (when was the last time you went to a DRIVE IN!).

A fool and his money .....

 

[haha]

Well written article I believe.

Ha

 

[LOL!]

We've vacationed in the Adorandaks every summer for the last decade ....

All the black flies are free. The area barely was a resort area in Teddy Roosevelt's time because of the flies which have not gone anywhere in the last 100 years (or hundreds of thousands of year if you prefer).

ETA: http://www.google.com/search?q=adirondack+black+fly+season

 

[Leonidas]

All the black flies are free. The area barely was a resort area in Teddy Roosevelt's time because of the flies which have not gone anywhere in the last 100 years (or hundreds of thousands of year if you prefer).

Well, no wonder kids golf for free. They're bait to draw off some of the flies so the adults can get to the car.

 

[Ronnieboy]

Speaking of which, has anyone watched the show "Downsizing" on WE? It's the story of another stupid couple with 7 kids who spent their life away. They met with a financial planner who advised them to stop spending $500 on dinners out since they were barely able to pay their rent.

Thanks for the info, I went to 'On Demand' and am watching it now.

The family says they were spending $15 to 18k per months during the good times......unbelieveable!!

 

[chinaco]

Well, he had a dream lifestyle for a decade.


This is a fairly common story. Spendthrift winds up broke.

Heck you would think he could at least manage to $1m/yr spending. Then he would have had at least 14 years of living high.

 

[hankster]

In the same spirit of recently adding this emotion

are there any "tiny violins with tears" emoticons out there?

If there are, bbbamI a.k.a. Queen of Emoticons will find them

 

[calmloki]

Wow - youse guys are hard - nobody else ever had a construction project that got a little out of hand - and then you are stuck with something that is all torn up and not worth a damn so you have to keep pouring in the cash?

 

[growing_older]

So maybe construction projects can run over budget sometimes, but don't you have to allow for that or have contingency plans (like scaling back) in case such a thing happens. It's hard to know how straight the reporting in a story is, but it looks like the family bought a $250,000 lake house (camp) then proceeded to dump another 5.3 million into it, plus 1.25 million for a Vermont house, plus who knows how much for a place in England, plus almost half a million for A car and A horse, plus other horses and cars and who knows what else. Oh, and they have big payments on a $1+ million mortgage and must have also been investing with leverage since they claim to have lost a lot of money on margin calls. It doesn't sound so much like a hard luck story or a construction project that cost more than expected. It sounds like a lot of bad decisions one after another, so that instead of being able to absorb any unexpected bad news when something didn't turn out as well as they hoped, the whole house of cards came crashing down. Kind of like wall street types making aggressive bets with other people's money, except it was their own real money. Ouch. I certainly hope I can learn these lessons from watching others instead of repeating their mistakes. It's hard to have sympathy for folks who spent too lavishly on their big windfall and consequently run out of money, especially when they have just spent more in 12 years than most people will earn in a lifetime.

 

[Koolau]

The family says they were spending $15 to 18k per months during the good times......unbelieveable!!

Actually, it sounds like "spending" wasn't their problem but rather "investing" (in land, homes, home improvements, margin accounts, etc.). Spending 18k/mo for 65 years would have just emptied their mattress if they'd stuffed it full of the $14mil. Of course, YMMV

 

[NW-Bound]

They did good charity work. They redistributed the wealth.

The only problem was they did it too fast, and too thoroughly.

 

[farmerEd]

What a freaking moron...$10million after taxes could have easily provided them almost $35-40K income PER MONTH for the rest of his life...now he works for less than that amount per year...no sympathy from me...guess we now know why the brother ran the company and he was only a minority owner...

 

[LOL!]

... he still sounds angry at his brother and others who decided to sell the company and who he says gave him little voice. Some of them got more than $100 million each, he said, while he got $14 million, as did his father and his sister Ann, because they were all minority shareholders.

I wonder what the others did with their money. That would make a good addition to the story.

(I like NW-Bound's comment about the charity work. )

 

[Nords]

I wonder what the others did with their money. That would make a good addition to the story.

Their brother has probably already asked them if they're willing to invest in some Adirondack real estate... or maybe they're the bargain-hunting bidders!