Economic downturns are hard on everyone. But for billionaires, they can be catastrophic. When people have that kind of money, it isn’t stored as cash in a safe somewhere. It is in the form of things like real estate and business holdings. And exactly how much money any given person is worth depends upon what other people think those holdings are worth. And those valuations can change by the day, hour, or even minute.
Sometimes it isn’t a matter of simply losing everything. Seán Quinn, for example, was the richest man in Ireland at the start of 2008 — estimated to be worth $6 billion. Although he started off in the 1970s selling gravel, he built a business empire that spanned construction, real estate, and insurance. But when the financial crisis hit, his business empire crumbled. Not only did he lose the $6 billion he was thought to be worth, he ended up over $3 billion in debt before declaring bankruptcy.
Of course, it isn’t always bad economies that cost fortunes. Sometimes it’s bad business decisions. And sometimes, it’s because the fortunes were based on fraud.
The most famous recent example of this is Bernard Madoff. But there are others — many others, in fact. In the infographic below, we discuss Allen Stanford, who lost his entire $2.2 billion fortune when he was convicted of operating a massive Ponzi scheme. And speaking of Ponzi schemes: Charles Ponzi had managed to accumulate the equivalent of almost a quarter billion dollars before it all vanished, and led to a prison stay of over three years.
Wealth is a fickle thing. It isn’t as tangible as people like to think. The cash in your pocket is, after all, just paper that’s only absolute value is that it must be accepted by the government for the payment of taxes. Even gold is not such a great store of wealth: it has been a horrible investment over the last 500 years or so.
Just ask Mansa Musa — the 14th-century king of Mali. Whether your wealth is in the form of ivory, gold, or salt, it can all vanish — and fast.
Check out these 8 enormous fortunes and how they were lost.