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How To Lose $10 Million Fast

This article was written by in Featured, Wealth and Affluence. 22 comments.


On Thanksgiving, the New York Times published a story about a man who had a check for $14 million ten years ago — $10 million after taxes — and who now has little to his name (Nick Martin). It’s not the sort of uplifting, family-focused feature article you usually see around the holidays, but people do seem to enjoy reading about the misfortune (quite literally, in this case) of others.

During the holidays, I was able to forget about money for a little while, but returning to “real life” after a vacation means I have to get down to business. For me, that means doubling my writing efforts and managing Consumerism Commentary better and stronger. Back to the series of Nick Martin’s unfortunate events.

In 1998, Nick received a check for his portion of the proceeds from the sale of his family’s billboard company. The urge to spend took hold, resulting in cars, houses, and horses. To keep his new purchases in good condition, he needed cash flow, something that was significantly lacking, particularly as real estate investments and the stock market crashed.

It’s easy to be judgmental. The internet is a place where armchair quarterbacks feel comfortable. Very few people know what would happen if the same situation — an unexpected windfall — occurs to them. There’s enough blame to go around. Here is Mr. Martin’s perspective:

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, as did his father and his sister Ann, because they were all minority shareholders.

In any similar situation, we see bankers who give advice with their own financial gain in mind rather than fiduciary responsibilities, individuals who trust a limited number of professional opinions, and the temptation to spend. Placing blame isn’t really important.

We can play games of hypothetical situations, asking each other, “What would you do if you inherited $10 million?”. When we can separate ourselves from the situation, it’s easy to think rationally. Here is what one might consider if they took the opportunity to envision receiving such a lump sum ahead of time.

  • Invest conservatively to ensure a cash flow and live off the income.
  • Have a low-stress job to boost that income.
  • Invest a small portion in the stock market for a chance to grow wealth without risking too much of the balance.
  • Possibly start a foundation, passionately supporting a cause.

These are all rational choices. Unfortunately, rationality is often the first thing to go once that check is in hand. In general, financial decisions are rarely rational even when not involving windfalls because humans are generally irrational, favoring emotional decisions. It is quite unfortunate that a descent like Nick Martin’s can occur, but losing a great deal or having a windfall slip through your fingers can be a good reminder that these is more to life than your net worth.

New York Times

Updated January 3, 2011 and originally published November 29, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 22 comments… read them below or add one }

avatar Investor Junkie

I can’t say I really feel sorry for the guy. It sounds like he was really living large. From the sounds of the it, he really didn’t get involved with the business and obviously didn’t inherit his father’s entrepreneurship.

His first mistake: relying on others for money advice. No one cares more about your money than you do!

Lotto winners seem to always for into the same situation. In his case, he won the family lotto.

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avatar Steve

If I received a 7+ figure check, the first thing I would do is deposit it into the bank; the second would be to take a week or two off work to figure things out.

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avatar eric ♦1,549 (Half-Dollar)

You’re right..it’s easy to pass judgment when you’re not the one in the situation. But to blow through millions of dollars….it still boggles my mind every time.

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avatar Yaro

Easy to be judgmental…but where’s the guy’s common sense when he has spent 50% of his windfall right off the bat on housing alone!

$5.3mil (vaca home) + 650K (vermont) + 600K (vermont renovations) + home in England

This wouldn’t be so bad for someone with a 100mil windfall, but for someone getting 14 million before taxes and plunking half of it down just for housing right away is ridiculous!

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avatar NeedleNose

It’s Hammer Time! (Can’t touch this)

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avatar Robert

He Deserve to loose every penny, come on 10 mill after tax and he blow’s it away.

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avatar Evan

It is so easy to judge the guy (The article states he spent $178K on a horse! A HORSE!)….but for someone who may not have had personal finance skills to begin with its not hard to blow 10 mil

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avatar Heather

Since we won’t know if I can do it until I try it, I’d like to be given the opportunity to attempt to manage a windfall of $10M. Send it on over, and I’ll keep you posted on how I’m doing ;)

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avatar Gary

I thought about this article several times over the weekend constantly coming back to the same unflattering conclusion which I won’t share here. The sad part is that you can only sell the family business once which is okay for Mr. Martin, but what about the children and what they must be feeling. From what I can see, Mr. Martin did not set aside funds to help his children through school to give them a good start in life. How sad that he wasted his family’s fortunes on foolish, show-off goods like fancy houses, cars, horses and who knows what else. It’s one thing to blow your lottery winnings in some silly way, but to waste the legacy of your family, one that should have been preserved for your own children, is the height of irresponsibility. Could Mr. Martin have been happy with a $1 million home, and an income of 100,000 a year after taxes for the remainder of his life? I think that would have been plenty for me.

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avatar HenryTalksMoney

As the saying goes, a fool and his money are soon parted.

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avatar TakeitEZ ♦549 (Dime)

I try not to judge others, especially when I have never been in a similar situation…but…..this guy has only himself to blame. I found it silly that he actually is now mad that he did not receive $100 million like some of his siblings. Dude…you inherited $14 MILLION!!! Makes me shake my head in disgust.

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avatar jimmy

The NYT article called the family ‘affluent’. I look at that word and think old money or earned money. In other words, people used to having and spending a lot of money without going nuts. These people were neither. They were just rich because they came into a chunk of cash. They had no experience with that kind of money, just like a lottery winner. The family started spending the money like drunken sailors instead of investing it for income and appreciation. If they had, they would probably be living off about $500K a year before taxes.

Instead, they saw millions and didn’t give much thought to keeping it around for the future. To them, it was easy come, easy go. And now, they have little to show for it.

No sympathy. More like jealousy for wasted opportunity.

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avatar Kyle

He should be furious at himself for taking bad advice from bankers without verifying it independently.

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avatar Kyle

He should be furious at himself for taking bad advice from bankers without verifying it independently. Besides, if he was a minority shareholder why would he think he should be entitled to much of a voice in the sale anyway? He was involved to the extent he could vote his shares.

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avatar Scott

It’s disappointing that he didn’t even have the foresight to set up education funds for the children. It would have been a small part of the inheritance, but would have helped out his children immensely. Shame on him!

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avatar Scott

Just to add…

Conversation in the future: “Son, I’m sorry you’re risking your life in some pointless war in order to earn money for college, but you have to understand, if I inherited $100 million instead of the measly $14 million, I absolutely would have set aside $50 thousand for your education.”

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avatar Chubbuni13

Haha, what a chump. After being in the lending industry and seeing uneducated, ignorant people make lots of money, spend it foolishly and be deeper in the hole, I’ve become pretty inured to seeing this trend. Still, these people hustled their asses off to get that money (whether or not it was ethical/legal is a totally different topic). Mr. Martin just got a call from the banker saying that he was 8 figures richer. I’m almost 100% sure that this joker didn’t set anything aside for their kids college funds. Well, at the very least, it’ll make a good topic for their essays on their univeristy applications.

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avatar Money Reasons

When I read this story, I kept thinking of the game of “Greed”. He’s way ahead of everybody else (at least in my neighborhood), just let the money sit in cash for safe fixed securities.

But as you state, in his peer group (where everybody probably already has $10 million or more), he might be average or perhaps even on the poorer side (if that is possible with $10 million)…

Not growing up rich like he probably did, I wouldn’t know what it’s like… but if I had a mere $2 million today, I’d be a happy guy :)

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avatar Bill in NC

The statement “$14 million, $10 million after taxes” doesn’t make any sense to me.

Heirs don’t pay taxes on inheritance in the U.S. – the estate pays the tax.

And yes, spending over 2/3 of your inheritance just on housing is more foolish than the behavior of multi-millionaire lottery winners.

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avatar 4hendricks ♦248 (Cent)

It amazes me when I see people do that. I had a similiar situation happen in my family 2x – family members rec’d a decent size amount of money, and instead of doing something smart with it, they quit their jobs, bought new cars, lived it up – never balanced their accounts, and poof – gone – they were asking us for money. A million doesn’t stretch as far as it once did.

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avatar lynn ♦155 (Cent)

I don’t think I have enough time left to spend that amount of money.

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avatar solidasarock

By some of the replies many already forgotten what the author of this article wrote. Here is a refresher: “The internet is a place where armchair quarterbacks feel comfortable. Very few people know what would happen if the same situation — an unexpected windfall — occurs to them”.

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