Riches To Rags / Real Life

• Mike Tyson had earned over $300 million during his career as a boxer but had to file for bankruptcy, thanks to his colourful variety of debts including $13.4 million to the IRS and a $9 million divorce settlement to his ex-wife, Monica Turner. From 1995 to 1997, he spent $9 million in legal fees, $230,000 on pagers and cellphones, and $410,000 on a birthday party. In June 2002, he owed $8,100 to care for his tigers and $65,000 for limos.
• This also happened to MC Hammer. During the late-1980s and early-1990s, he was one of the first rappers to achieve mainstream popularity and was wildly successful, but by the mid-1990s as gangsta rap became dominant within the genre, the public had grown bored of Hammer's upbeat, poppy rap style. Combined with the large amounts of money he was spending on friends and family, along with the enormous amount of money spent on his mansion, which included a basketball court with a solid gold hoop, he eventually found himself $13 million in debt. In 1996 he declared bankruptcy. Since then he has unsuccessfully attempted a few times to revive his music career but has mainly been working as a Christian minister.
• Hip-hop producer Scott Storch was once worth $70 million, blowing his fortune on cocaine, celebrity girlfriends, a mansion, a yacht, jewelry, and private jets. He allegedly spent $30 million in a six-month period alone. Soon afterwards, Storch went to rehab and was later charged for grand theft auto (for failing to return a leased Bentley), and for failing to pay child support. Storch's mansion was later repossessed, and he filed for bankruptcy in June 2015, with only $3,600 in assets (cash, clothes, and a watch).
• When he died from an accidental overdose in 2009, Michael Jackson was $400 million in debt. By 2012, his estate had recouped most of his debt thanks to strong record sales, a concert movie, and a stake in Sony Music Publishing.
• This often happens to former nobility and royalty as the result of a revolution.
  • For example, the French royal family after they were imprisoned during The Reign of Terror. The Jacobins running the prison basically did everything they could to make them as uncomfortable as possible and humiliate them.
  • After the Russian Revolution, this happened to Czar Nicholas Romanov and his family, as well as the entire aristocracy and capitalist class.
  • Puyi went through frequent and dramatic changes of fortune during his life. When he was only two he became emperor of China. Four years later he was forced to abdicate (well, his aunt abdicated on his behalf, since a six-year-old was obviously unable to make that decision himself). At the age of eleven he was restored to the throne for all of twelve days before the republican army crushed his supporters' rebellion. For the next seven years he lived in the Forbidden City. Then he was driven out by an invading warlord and made the fatal decision to seek refuge with the Japanese. In 1931 they invaded China and made Puyi their Puppet King in Manchuria. After the war ended he was taken prisoner by the Soviets, who handed him back to the Chinese, who imprisoned (and eventually rehabilitated) him as a war criminal. He was released ten years later post-rehab and spent the rest of his life as a commoner, without looking back since.
• This often happens to people who win lotteries. Lotto winners often come from lower-class backgrounds and have no experience managing large amounts of money. They might also be prone to poor financial decisions, as gambling is by definition a poor financial decision. As a result, many of them do not regulate their spending and end up broke (or worse, millions of dollars in debt) in less than ten years. Even if they're careful about their spending, there's still always the possibility of being hit repeatedly with lawsuits, usually meritless, but taking even one to court can take giant bites out of even the most substantial of fortunes, making settlements the more viable option by a long shot, which only encourages parasites.^note This is why some countries allow lotto winners to remain anonymous, to the point that in Jamaica it's become tradition for people to wear outlandish costumes while accepting the prize money Shady accountants are another thing that can bring them down; while they will eventually get caught when a discrepancy gets noticed somewhere, they can funnel immense amounts of money away over a long period of time and cause tons of other problems.
• An alarmingly high number of professional athletes, despite making millions during their careers, have found themselves broke less than ten years after retirement, be it due to alimony/child support, failed business ventures, shady accountants, excessive lifestyles catching up to them, and/or the onset of medical conditions caused by the injuries sustained while they were still playing.
• Similar to the above, a shocking number of professional wrestlers (mainly from the 70's and 80's) also ended up falling into bankruptcy despite making hundreds of thousands or even millions of dollars in just a few years (which in today's money would be worth even more), mainly due to medical bills, bad drug or drinking habits, legal woes, and failed investments along with a hard party lifestyle at the time ensuring they lost almost as much money as they made.
• British football team Leeds United endured this in the mid-2000s. After being Champions League semifinalists in 2001, they failed to make the next two tournaments, losing out to Liverpool and Newcastle respectively. After the second instance, the huge loans taken out to finance the transfer fees and player wages caught up with them. Their loans had been dependent on Champions League football every season. They were relegated in 2004 after going into administration. In 2007, they went into administration again and were relegated to the third tier of English football. Thankfully for them, this turned around once they got more financially sound ownership, and eventually they returned to the Premier League with a warm welcome in 2020.
• This blog post describe how Suburbia families' lifestyles went down when the value of their house, which they used as collateral in equity, went down with the housing crisis.
• Terry-Thomas had a career decline by The '80s, which wasn't helped when he was diagnosed with Parkinson's Disease. By 1983, with his medical bills at £40,000 a year, he and his wife sold their dream house in Spain and moved into the small cottage once owned by his former wife, which she left to him in her will. By 1987, they could no longer afford to live in Spain and moved back to London, where they lived in a series of rented properties before ending up in a three-room, unfurnished charity flat, where they lived with financial assistance from the Actors' Benevolent Fund. In 1989, the acting community was so shocked at the state he was living in, that a charity concert was held in his honor. The money raised allowed him to move out of his charity flat and into Busbridge Hall nursing home in Godalming, Surrey, where he lived out his remaining years.
• This can happen to entire countries.
  • Haiti was considered the most lucrative of all New World colonies until the late 1700s. France could cut its losses of North American colonies in the Seven Years War and sustain itself on the sugar plantations of Haiti alone. It was run by a tiny class of white and mixed-race slave-owners who could lord it over the slaves on the sugarcane and coffee plantations. Then came two decades of near-constant war that ended with an independent Haiti and (at least nominally) free blacks — the first time in history a slave rebellion resulted in an independent Republic led by former slaves, but France imposed huge reparations on the newly independent nation, pushing it into economic problems it never fully escaped from.
  • Argentina on the other hand was considered among the richest countries on Earth in the late 19th century and it was about as desirable a place to emigrate to as the US from the standpoint of many Europeans. However, a mixture of corruption, incapable politicians, and bad luck led to Argentina declaring bankruptcy in the late 20th century. Argentina is once again modestly wealthy, but nowhere near the position in the world it enjoyed during its heyday (to the point its economy has been overshadowed by neighbor Brazil, and also Mexico in a Latin American standpoint).
  • India was once among the richest nations of the world with several Indian states having more gold than anyone imagined a single place could store. The likes of Marco Polo who came all the way to South India was agog at the wealth of the Tamil Kingdoms. Until the 1700s, India had a monopoly on the Diamond Trade, the crown jewels of every Crown in Europe came from the diamonds of Indian mines and Indian spices and textiles were highly prized and it maintained lucrative trade with Europe from the Roman Empire onwards. Two centuries of colonialism followed by post-independent malaise, India is far from being among the most economically prosperous nations in the world. Despite rapid economic growth, the nation still struggles with massive poverty (as evidenced by the success of films like Slumdog Millionaire), corruption and high mortality rates. Its educated urban middle class emigrates in large numbers to serve in Western countries leading to a Brain Drain with India struggling to make its exports match its imports, a situation that is entirely the reverse of its economic condition in the early 1700s.
  • China was legendary for its wealth and riches. Its porcelain products had long commanded envy and high demand by the Europeans who devoted a great deal of time and effort to copy and reverse engineer it. The Chinese government had a distinct policy of a tribute system whereby all who wanted to treat with the Emperor had to submit to be its vassal, a system followed by Dutch traders who came earlier. The English, having greater demand for Chinese products and wanting preferential treatment refused to play along, and responded negatively to the fact that the Chinese didn't think they had anything that interested them: China was among the richest countries in the world, it had a very efficient agricultural sector, a large population, and produced goods like silk or tea that the whole world wanted. The only thing the Europeans could give in exchange was silver and gold. The British, or rather the East India Company, instead formed the world's first, and largest and most successful, drug cartel, by producing opium cheaply in India and thus reduce the trade deficit. China of course wanted to stop this for several obvious reasons, but when they did in the Opium Wars, it was the beginning of a Shocking Defeat Legacy of unequal treaties and colonization of coastal cities into spheres of influence, much looting and violence that saw the destruction of several villages, Monumental Damage and widespread looting that ended with China losing to Japan, ending with No More Emperors and China seen as an ungovernable backwater nobody needed to care about, and giving the Chinese a strong desire to get back on top and turn the tables. This has turned around quite a bit in the last half-century or so.
  • Japan is a downplayed example. It's still one of the richest countries in the world, having the world's third largest GDP, the fourth highest GDP per capita in Asia, and serving as a world center of finances, manufacturing, and technology. However, during the late 20th century, it was near the top of the world and seriously rivaled the United States as a global superpower. A combination of a bubble economy, an aging population, and fast-surging rivals in China and South Korea (both of which had spent most of the 20th century in one crisis after another, leaving Japan as the undisputed winner in terms of economic development in Asia) left Japan as a shadow of its former self. No educated person would think Japan as a weak country even today, but it is no longer a contender for "top superpower of the world".
  • Nauru. It used to have a very lucrative phosphate industry, which, combined with the small population of less than ten thousand people, made it one of the richest countries in the world (in 1970, it had a higher GDP per capita than Italy and Japan. No, seriously.) and the second richest in Oceania, after Australia. However, some Nauruans invested the money in wasteful foreign investment, while others didn't know what to do with it (since after all, the country literally consists of one tiny island in the middle of the Pacific) and ended up spending it on frivolous things, like theater. Eventually, the phosphate ran out and along it the steady amount of cash, leaving behind a mined-out, scarred island unsuitable for farming, forcing the country to import most goods overseas. In the span of a decade, Nauru was bankrupted.
  • Venezuela. For much the 2000s and early 2010s under president Hugo Chavez, it was one of the most prosperous countries in South America following an oil boom. However, under Chavez's successor Nicolas Maduro, dropping oil prices lead to the entire economy collapsing and the country becoming bankrupted. It didn't help that Chavez and Maduro failed to mitigate corruption and didn't diversify Venezuela's economy, which only made things worse.
  • This is the fate of a country whose economy revolves around a single resource or service in a phenomena known as the Dutch Disease. If the income source be it shipping or gold mining is profitable and highly demanded, then the nation's economy would prosper and thus lead to more investment in industries revolving around that income source at the expense of others. However, if said source becomes worthless due to technological changes, market competition or political instability, then the entire economy collapses with no alternatives to fall back on.
  • In the United States, there's a reason the Great Lakes region is known as the "Rust Belt." In the early 20th century, major cities in the area were booming industrial towns: Detroit was the Motor City, Pittsburgh was the Steel City, Milwaukee was the Brew City, etc. Detroit at its peak was the fourth-largest city in the US, and Cleveland was fifth. But in the 1960's and 70's, as the cost of living in the US skyrocketed, the companies moved manufacturing elsewhere, either to third world countries or US states—mostly in the South—with weaker labor laws. As a result, most Great Lakes cities became Dying Towns and crime-ridden ghettos virtually overnight.^note Only Chicago and Columbus managed to buck that trend due to their economies being more diverse than relying on a single industry...not to mention Chicago already had a reputation for being a Wretched Hive. While most of these cities have seen some recovery in the 21st century by focusing on healthcare and the service sector, their population and cultural relevance are still a shadow of what they once were.
• Robert Morris was a merchant and investor whose name was synonymous with 'wealth' during the final years of Colonial America. When the Revolutionary war came about, he took on a managerial role of the rebel army's resources, earning the unofficial title of "Financier of the Revolution". After the war, Morris, who was poised to become one of the wealthiest men in the world, engaged in aggressive land speculation, passing up on urban properties that would become central business districts to buy vast stretches of wilderness that would remain vast stretches of wilderness. His finances collapsed and his resulting stint in prison became a national embarrassment.
• H. P. Lovecraft was born into a family of wealth in Rhode Island, but by the time he entered high school, much of that wealth was gone. Starting with his father's (possibly syphilis-related) psychotic break, followed by the death of his maternal grandfather, who was the provider of most of the wealth on his mother's side of the family, the family businesses fell apart. They had to leave their large Rhode Island home and eventually moved into a small duplex. Lovecraft would later remark that this was the darkest point in his life^note Contrary to popular belief, the death of Lovecraft's grandfather did not leave his family very poor. His estate had been around $25,000 (more than $660,000 in 2017 dollars), and by 1914 Lovecraft personally inherited $2000 (about $52,000 in 2017 dollars) more from one of his aunts.
• Burt Reynolds filed for Charter 11 Bankruptcy in 1996, due in part to an extravagant lifestyle, a $2 million divorce from Loni Anderson, and failed investments in some Florida restaurant chains. He emerged from bankruptcy two years later.
• In Billie Holiday's final years, she had been progressively swindled out of her earnings, and she died with US$0.70 in the bank and $750 ($6,446 in 2018 dollars), which was a tabloid fee, on her person.
• Jim Davidson filed for bankruptcy in 2006, having failed to keep up payments on a £1.4 million back tax bill that he had reduced to £700,000. In 2003, after a meeting with the Inland Revenue, he claimed he spent £10,000 a week on back taxes, commission to agents, maintenance and school fees, and a £2.2 million mortgage. He spent so much money on his four divorces, that he joked that the reason he's with his current wife is that he can't afford another divorce.
• Gary Glitter declared bankruptcy twice, in 1977 and the 1990s, over unpaid taxes. He claimed this was because "someone didn't fill in the right forms". This ended up being the least of his legal problems, although he no longer has to worry about having enough money to live on in retirement.
• Corey Haim nearly went broke after he pulled out of the film Paradise Bar in 1996. He was sued by Lloyd's of London for $375,000 for failing to disclose his drug addiction as a pre-existing medical condition on the insurance form. Haim filed for Chapter 11 bankruptcy protection in July 1997. He ended up living back home with his mother. He died with very little money, and his mother initially announced that the cost of his funeral would be covered by public funds provided by the city of Toronto as is customary in destitute cases.
• Fatty Arbuckle's career was ruined by a scandalous manslaughter trial, even though he was found innocent. At the time of his acquittal, Arbuckle owed over $700,000 in legal fees to his attorneys for the three criminal trials, and he was forced to sell his house and all of his cars to pay some of the debt. He signed a new movie contract reportedly the day before he died in his sleep.
• Irish snooker player Alex "Hurricane" Higgins, once worth £4 million, died penniless and living on a £200-a-week disability allowance.
• Paul Catterole of S Club 7 declared bankruptcy in 2014 and was reduced to selling his Brit Awards on Ebay, saying "there are bills to pay". When he appeared as a guest on Loose Women, he thanked the producers for giving him a shirt to wear. His bandmate Jo O'Meara appeared on Celebrity Big Brother because she was in danger of having her house repossessed.
• Abz Love of Five also appeared on Celebrity Big Brother because he was reduced to living with his aunt and later put his Brit Awards up on Ebay.
• Kerry Katona of Atomic Kitten was declared bankrupt at the High Court in London in 2008 after failing to pay the final £82,000 of a £417,000 tax bill. After losing her Iceland contract, her magazine column, and her MTV shows, Katona suffered further financial setbacks. In December 2009, she received a repossession order on her £1.5 million home, having not paid her mortgage in months.
  • In 2013, she filed for bankruptcy at County Court in Wigan.
• Shaun Ryder of Happy Mondays and Black Grape lost most of his money in the late nineties due to school fees, legal issues and other things.
  • His bandmate Bez was declared bankrupt twice in 2005 and 2008. He appeared as a contestant on Celebrity Big Brother for this very reason.
• When Bela Lugosi died, he was in such dire financial status that Frank Sinatra quietly paid for his funeral.
• When English comedian Freddie Starr died, he'd lost most of his money fighting legal actions in his final years, and he was reported as living in constrained financial circumstances in Spain in exile from creditors back in England. His family were without the funds needed to cover the costs of repatriating his body home for a funeral until an undertaker's firm from the city of Sheffield charitably paid for the repatriation and funeral service.
• Following Evel Knievel's conviction for assault in 1977, he lost most marketing endorsements and deals, including Harley-Davidson and Ideal Toys. With no income from jumping or sponsorship, he was eventually declared bankrupt. He spent much of the 1980s in obscurity before making a comeback in the 1990s.
• Isaac Hayes experienced a decline in record sales in 1976. He and his wife were forced into bankruptcy in 1976, as they owed over $6 million. By the end of the bankruptcy proceedings in 1977, Hayes had lost his home, much of his personal property, and the rights to all future royalties earned from the music he had written, performed, and produced. He did manage to bounce back the next year.
• Comedian Rod Hull of Emu fame filed for bankruptcy in 1994 due to the cost of renovating his mansion and an unpaid tax bill.
• Football legend George Best was made bankrupt twice due to his celebrity lifestyle. Crippling alcoholism didn't help, either.
• Brendan Fraser went broke in the 2010s when he was unable to make the annual $900,000 alimony and child support payments. Thanks to surgeries for all the injuries he sustained doing action films, he was no longer getting the plum roles, which contributed to his financial woes.
• British ski-jumper Michael Edwards aka Eddie the Eagle declared bankruptcy in 1992, claiming that a trust fund for his earnings was not set up properly.
• 50 Cent filed for Chapter 11 bankruptcy in 2015 after a court ordered him to pay $7 million to Lastonia Leviston whose sex tape he posted online without her consent.
• In 2012, Eike Batista was listed by Forbes magazine as the 7th richest person in the world, net worth of US$35 billion. In 2014, he had a negative net worth, as all his companies turned out to be overvalued in especulation (such as drilling operation which had claimed would pump 750,000 barrels of oil a day, and was delivering 15,000).
• Elizabeth Holmes was a rising star — a woman who dropped out of college to found biotech firm Theranos that could analyze blood with a pinprick, becoming a billionaire at the age of 30. She graced the covers of Fortune, Forbes, and even Time. She loved to wear black turtleneck sweaters as a Shout-Out to her idol Steve Jobs. She had a net worth of $4.5 billion at its peak. Then it all came crashing down in a series of lawsuits by government agencies, regulators, and insurance companies when evidence of systematic fraud surfaced. Her worth was revised to "nothing" by Forbes. As of October 2019, her lawyers are suing her — in their words — "given Ms. Holmes’s current financial situation, Cooley has no expectation that Ms. Holmes will ever pay it for its services as her counsel.”
• English glamour model and media personality Katie Price aka Jordan filed for bankruptcy in 2019 due to various debts.
• Samuel Brannan, an American newspaper mogul and Gold Rush-era California's first millionaire, lost half of his money to divorce and drank away the other half. By the time he died, he managed to quit drinking and pay off all his debts but didn't have enough money to pay for his own funeral.
• Abbott and Costello got hit by the IRS demanding back taxes in the late fifties, forcing them to sell their homes and most of their assets, including the rights to most of their films.
• Peter Wyngarde was declared bankrupt in 1982 and again in 1988. An obituary reported that he lived partly on social security benefits.
• In his last days, Dennis Wilson was homeless and living a nomadic life.
• A tragic example was Francesca Hilton, the only child of Hilton Hotel chain founder Conrad Hilton and socialite Zsa Zsa Gabor. As summarized in a story about her after her death at 67, she "was raised attending celebrity parties, living in mansions, earning blue ribbons in horse-riding competitions, and jet-setting to Paris, Rome, and other fashionable cities." After her father's death in 1979, she was left with a relatively small inheritance, and bounced around in several entertainment careers that never took off. In her last eight years, she was flat broke and alternated between living in slummy apartments and out of her car.
• Desi Arnaz went through this as a child. He grew up in a very wealthy family (one of his grandfathers was an executive of Bacardi Distillers) and his father was at one time the Mayor of Santiago de Cuba. The family ended up on the wrong side of The Cuban Revolution of 1933, their property was seized and his father jailed. After a few months, the family was able to move to Miami, where his father started a small tile business.
• In 2022, Variety reported that Armie Hammer, following accusations of sexual abuse resulting in him being dropped by his acting agency and cut off by his wealthy family, was "totally broke" and had used his remaining funds to relocate to the Cayman Islands where he took a job as an apartment manager and timeshare salesman.
• This is the fate of Indian mogul Anil Ambani, whose fall from grace was caused by an intense desire to top his much more successful older brother Mukesh, resulting in a slew of various debts and a catastrophic firestorm of massive controversies that would eventually eat up all of Anil's personal wealth, causing his net worth to drop to zero and go bankrupt.
• Andy Dick has undergone a particularly catastrophic case since his heyday in the 2000s. While starting out as a successful comedian working with a variety of successful comedians on a variety of successful shows, his career eventually shuttered completely by the mid 2010s as a result of him being rendered completely unemployable as a result of his drug problems that also caused him to sexually harass a variety of people, both female and male. This culminated in him becoming a registered sex offender, losing any remaining influence in the Hollywood industry, and even becoming homeless. As of 2024, he spends his time on small live-streaming You Tube channels, being basically manipulated by these channels for what little fame he has left.

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