When
you are there at the bottom, it feels like as soon as you rise to the top or, as they
say, become ultra-successful, you are never going down again.
Once you build a successful company or make a series of astonishingly profitable investments,
even a few million dollars can set you on a path to be financially free for the rest
of your life. But a few hundred million dollars should not only provide you with a luxurious
life for your remaining days here on earth, but also to your children and grandchildren.
But there is another segment in our society
that can afford everything they want. Their wealth exceeds the wealth of some nations.
Jeff Bezos, has as much wealth as Greece's current GDP. Billionaires are in the best
period of time in history. The average billionaire has a net worth of 4.1 billion dollars. Given
the markets average, if they would receive an 8 percent return on their wealth, a typical
billionaire can earn over 328 million dollars a year, enough cash to provide anyone with
super luxuries life. But it's not all sunshine and rainbows, its as difficult to manage so
much money as its to get it in the first place. Some people managed to become billionaires
but couldn't maintain it to the point where they had to sell all of their assets and file
for bankruptcy. Today we are going to explore 5 billionaires who are now officially broke.
Number 1, Bernard Madoff
He started a brokerage firm back in the 1960s and grew it into one of the largest investment
firms. At one point, Madoff Securities was the largest market maker at the NASDAQ, and
in 2008 was the sixth-largest market maker on Wall Street. The company went to provide
a different kind of financial services. At his peak, Madoff had a net worth of 17 billion
dollars until people figured out that it was all a scam. It was the largest Ponzi scheme
in world history and the largest financial fraud in the history of the U.S.
He would attract investors by paying great profits to early investors with funds from
more recent investors. No one could resist such profits and ended up investing billions
into his firm.
On December 10, 2008, Madoff's sons told authorities that their father had confessed to them that
the asset management unit of his firm was a massive Ponzi scheme, and quoted him as
saying that it was "one big lie". The following day, FBI agents arrested Madoff and charged
him with fraud. The SEC had previously conducted multiple investigations into his business
practices but had not uncovered the massive fraud. In March 2009, Madoff pleaded guilty
to 11 federal felonies and admitted to turning his wealth management business into a massive
Ponzi scheme. He defrauded thousands of investors. The amount missing from his client accounts
was almost $65 billion. Madoff ended up sentenced to 150 years in prison.
Elizabeth Holmes
This woman was named the next Steve Jobs,
way before Elon Musk was as popular as he is today. She founded Theranos and claimed
to have revolutionized blood testing by developing testing methods that could use surprisingly
small blood volume, such as from a fingerprick. Holmes raised $6 million to fund the firm.
By the end of 2010, Theranos had more than $92 million in venture capital. She was the
real deal. In 2014, she appeared on the covers of Fortune, Forbes, The New York Times. Forbes recognized
Holmes as the world's youngest self-made female billionaire and ranked her #110 on the Forbes
400 in 2014. Theranos was valued at $9 billion and had raised more than $400 million in venture
capital. She was everywhere, giving speeches alongside
other billionaires such as Jack Ma to inspire others, but that was probably the peak of
her career. In 2015, a series of journalism and investigators
revealed doubts about its technology claims and that Holmes had misled investors and the
government. In 2018, the SEC charged Holmes with deceiving
investors by "massive fraud" through false or exaggerated claims about the accuracy of
the company's blood-testing technology; Holmes settled the charges by paying a $500,000 fine,
returning 18.9 million shares to the company, relinquishing her voting control of Theranos,
and being barred from serving as an officer or director of a public company for ten years.
Despite having raised more than $700 million from investors, the company is now on the
verge of bankruptcy, and Forbes estimates her net worth at zero dollars.
Jocelyn Wildenstein
You probably know here for here extensive cosmetic surgery that ended up in her catlike
appearance, but for some reason, she even denies having plastic surgery. But that's
not what we want to know. Though she didn't come up with any brilliant idea to become
super-wealthy, she took a different path. She married Alec Wildenstein, who was a billionaire,
but not self-made. When his father passed away in 2001, he inherited half of his father's
business empire that estimated to worth 10 billion. Seems like an easy way to become
a billionaire. Not really! In 1999, his wife Jocelyn Wildenstein divorced
him and received 2.5 billion dollars in her settlements and $100 million each year for
the following 13 years. But, you know what happens when you don't
earn your billions with your blood and sweat? You waste it faster than you get it. She was
known for her extravagant lifestyle. Her telephone bill alone was $60,000 a year. She uses to
spend on food and wine $500,000 annually. She spent money like there is no tomorrow
but when tomorrow came in knocking, she realised that she had more debt than she can possibley
cover and ended up filing for bankruptcy in 2018.
4. Allen Stanford Stanford first started a bodybuilding gym
that failed. His first success in business came from speculating in real estate in Houston
after the Texas oil bubble burst in the early 1980s; he made a fortune buying up depressed
real estate and selling it years later as the market recovered.
But that wasn't enough for him, he wanted more and went to found Stanford Financial
Group. He got into the banking the indstry. Business was booming, his net worth reached
2.2 billion dollars at its peak because he continuously delivered higher returns to his
investors than market's average which made his business look a bit more suspicious.
When pitching to investors, he presented hypothetical investment results as actual historical data
in sales pitches to clients and claimed his certificates of deposit were as safe as, or
safer than, U.S. government bonds. But it was leaked later on that companies
under Stanford's control were "rumored to engage in bribery, money laundering, and political
manipulation". Seems that's what Allen Stanford meant by a safe investment. So in 2009, Stanford
became the subject of several fraud investigations and was charged with fraud. His billion-dollar
idea got him 110-year sentence prison, which he is still serving.
5. Eike Batista
This man, once upon a time, was the 7th richest person in the entire world. Yes! You heard
it right! He was one of the few richest people on the entire planet. The question that I
want to know an answer is - how do you you go from being worlds 7th richest human to
being broke? Here is the recipe. In the 1980s, Batista
created and put into operation eight gold mines in Brazil and Canada, a silver mine
in Chile, and three iron ore mines in Brazil. From 2004 to 2010 Batista built 5 companies,
each focusing on different parts of the production from mining to logistics. And things took
off in the beginning. In 2011, Batista was listed as the richest
person in Brazil and the most powerful person in the country, placing him as Brazil's most
powerful person after Brazil's then-president (Dilma Rousseff ). In early 2012, Batista
had a net worth of US$35 billion.
Just when it seemed he is going to be at the top forever, things turned south. As of 2013,
due to falling commodity prices, none of his enterprises were profitable despite substantial
infusions of cash by the Brazilian government, and Batista was engaged in desperate efforts
to shed assets and meet the demands of creditors, which bankrupted his companies by 2014, he
was officially broke. He holds the record for having been the fastest destroyer of wealth.
He deserves it, comes on, from 35 billion dollars to zero, I didn't know if that's humanly
possible.
Bjorgolfur Gudmundsson
Björgólfur was Iceland's second businessman worth more than a billion dollars. At one
time, he was the majority owner and chairman of the now nationalized Icelandic bank Landsbanki,
the second largest company in Iceland. He was ranked by Forbes magazine in March 2008
as the 1014th-richest person in the world, with a net worth of $1.1 billion.
He started multiple businesses, including a beverage business in Saint Petersburg, back
in 1991. But his biggest move was when he gained 45% controlling share of Landsbanki,
which is what made him a billionaire. But he miscalculated his moves and didn't see
the banking crises that were on a horizon. In 2008, the industry collapsed and destroyed
the entire economy of Iceland. His debts rose to over 1.2 billion dollars, so he had to
file for bankruptcy. Forbes estimates his net worth today at $0.
AND lastly, Patricia Kluge
Its another woman who found her way to the
billionaires club through marriage. She married John Kluge, who was one of the richest men
in the entire country. The marriage worked out until his wife found out that she can
earn billions if she files for a divorce, so They divorced in 1990, leaving her one
of the nation's richest divorcees, according to Forbes, with assets including the grand
Albemarle estate in Virginia, which had an estimated value of around a billion dollars
back then. And that's the problem when you become a billionaire
through a divorce. You know nothing about the business. You either screw everything
on your own or someone around you would fool and rip you off. She thought she could turn
it into a profitable venture, but she was dead wrong, so she couldn't maintain her luxurious
life and ended up selling furniture and jewelry at auction in a bid to avoid bankruptcy. But
it didn't work.
Here is your list of the billionaires who
were at the top of the world and could afford anything their hearts desired but ended up
broke, bankrupt, and couldn't even pay the rent. So if you are thinking of becoming a
billionaire, here are important lessons. Be honest and don't build it by scamming people
or ripping off someone's wealth just because you were married to them.
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Thanks for watching and until next time.