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Give me one or two stories about someone who grew up in a wealthy family, but then the money right now out and he or she was put in a worse position than if he/she had growing up poor to begin with.
Hello and thanks for asking Wonder for help with finding one or two stories about growing up wealthy, losing your money, and the struggles that ensue. In short, I was able to find several stories that met your criteria. The two stories I chose are about the Siegel family and Mary McClelland. Please see my summary below for more details about these stories.
METHODOLOGY
As a starting point, I searched in-depth for articles and/or case studies revolving around families or individuals who lost wealth. From there I drilled down deeper and searched for information on surviving lost wealth, squandering inheritances, adjusting to having no money, and the like. I found multiple stories about families losing their wealth but it proved to be more difficult to find stories about the impact of losing wealth and surviving their new "poverty", specifically. However, the two stories I provided for your podcast do include consequences and/or impact on the individuals or family members who lost their wealth or a significant portion of their wealth. In addition to the two main stories listed below, I'm also including information and links to three more similar stories I came across while researching.
RELATED BACKGROUND INFORMATION
Losing wealth is not so uncommon. In fact, 70% of high-net-worth families lose their wealth by the second generation, and 90% lose their wealth by the third generation, according to Money magazine. Wealth experts have a saying: "the first generation makes it, the second generation spends it, and the third generation blows it."
Experts say wealthy parents do not disclose financial information to their heirs, for fear of them becoming lazy or entitled among other reasons. As a result, the next generation does not plan in advance, nor do they have any idea how to handle their inheritance.
Generally speaking, the individual or family that builds the fortune is highly motivated to accumulate and preserve wealth, while subsequent generations lack that type of drive; they're often better at spending money. In addition to not understanding or appreciating the hard work put into building wealth, heirs are not motivated to be diligent, nor do they possess the values required to build and maintain wealth.
There is also a correlation between wealth and substance abuse. Research shows that there is a higher likelihood of addiction problems with wealthy children, possibly due to stress and parental isolation. They also experience adjustment issues more so than their non-affluent peers. Issues continue into adulthood, with studies showing that wealthy adults "outdrink" poor adults by 27%.
STORIES
1) The Seigel Family
This well-documented family drama even became a documentary movie , The Queen of Versailles (2012). David Seigel is the CEO of Westgate Resorts, a $900 million time-share provider in Florida. Before the economic crisis in 2008, David and his wife, Jackie, were building the biggest house in the country (a 90,000-square-foot Versailles-inspired mansion in Orlando). Then the economy tanked and put a stop to the building of their mansion and to their lavish lifestyle. The film documents "major changes in lifestyle and character" of family members and domestic staff as they experience losing the wealth to which they were accustomed.
In addition to the financial struggles the Seigels experienced, they also faced heartache. In 2015, their daughter Victoria overdosed at the age of 18. Her father shared that she had trouble getting through high school and didn't have plans to attend college. Victoria struggled with anxiety and depression and became addicted to prescription drugs. As mentioned above, wealthy children are at a higher risk for anxiety, depression, and substance abuse.
This story is not as well documented and it is lesser-known than the Seigels but it illustrates the struggles people face when they're accustomed to wealth that is no longer available. Mary McClelland grew up very comfortably, never thinking much about money. At the age of 18 she started getting sizable payments from stocks, bonds, and CD's, and these payments lasted throughout her 20's. Her parents rarely discussed financial responsibility with her and they actually supplemented her income. Her spending spree came to a halt at age 30 when she had spent all the money, around $100,000. Mary had to learn to live paycheck-to-paycheck with a maxed out credit card, to work jobs she didn't like, and to find new ways to save money. However, Mary says she was in denial, and the excitement of buying something new overrode her willpower. She says, "Purchasing, for me, was (and is) just sheer, impulsive euphoria." She was accustomed to getting new, expensive items her whole life. And just because her financial situation could no longer support it, didn't mean she was going to stop. However, this habit nearly cost her her family after bouncing checks and maxing out credit cards.
This compulsion to buy is similar to compulsions with eating, sex and gambling. Brain chemistry actually changes, giving the person a "high", similar to the effects of using drugs or alcohol. This addiction to spending money, or "shopaholism", is commonly seen among the wealthy and non-wealthy.
ADDITIONAL STORIES
I felt compelled to include the most well-known story about wealth loss in America. The Vanderbilts accumulated wealth in the railroad and shipping industries. Cornelius Vanderbilt was the second richest American of all time. But subsequent generations of Vanderbilts had extravagant lifestyles and were careless with the family fortune. By the 1970s, none of the Vanderbilt descendants were millionaires. For more in-depth information on their story, please see this Forbes article: The Vanderbilts: How American Royalty Lost Their Crown Jewels.
Peter was born into a wealthy family as the grandson of Joseph Pulitzer, newspaper magnate. He was reportedly worth $25 million in 1982. Peter managed to spend it all and in 2011 he needed a bail-out (and got it from ex-wife, Roxanne) to keep his citrus-growing business afloat.
Her family fortune came from Woolworth's retail chain and E.F. Hutton investment bank. At one point, her fortune hit a high of $900 million (inflation-adjusted). However, when she died in 1979, she had next to nothing. Barbara had an unpleasant childhood despite being rich, and some say this is what led to her entitled behavior and opulent lifestyle. She squandered her fortune away on art, designer clothing, expensive jewelry, homes, cars, and husbands (married seven times). Unfortunately, despite all that spending, Barbara still wasn't happy and turned to alcohol and drugs. The spending continued and she was forced to liquidate assets in order to make ends meet. She ended up living in a hotel in Los Angeles until her death at age 66. At the time of her death she only had $3,500 to her name.
CONCLUSION
To wrap it up, I provided two stories that involve the struggles people face in relation to wealth or losing wealth. I also included three bonus stories to provide you more options for consideration.
Thanks again for asking Wonder. Please let us know if we can help with anything else. Best of luck with the podcast!