WHY RICH FAMILIES’ GENERATIONS BECOME POOR?

Abstract

This article explores hidden reasons behind bankruptcy of prominent individuals, focusing on both billionaires and millionaires. It examines how mismanagement, reckless spending, and poor financial oversight can lead to the loss of significant fortunes, despite having substantial income. The stories of figures such as Mike Tyson, Sean Quinn, Johnny Depp, and Veronica Lake offer insights, emphasizing the importance of financial discipline and strategic planning. By analyzing the financial downfalls of these individuals, the article highlights the broader lesson: financial success is not solely about earning wealth but also about effectively managing and preserving it. Through this investigation, the article emphasizes the need for a deep understanding of financial concepts, such as budgeting, investing, and maintaining fiscal responsibility, to ensure long-term financial stability.

European International Journal of Multidisciplinary Research and Management Studies
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Urazboyev Feruzbek. (2024). WHY RICH FAMILIES’ GENERATIONS BECOME POOR?. European International Journal of Multidisciplinary Research and Management Studies, 4(12), 143–146. Retrieved from https://inlibrary.uz/index.php/eijmrms/article/view/57611
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Abstract

This article explores hidden reasons behind bankruptcy of prominent individuals, focusing on both billionaires and millionaires. It examines how mismanagement, reckless spending, and poor financial oversight can lead to the loss of significant fortunes, despite having substantial income. The stories of figures such as Mike Tyson, Sean Quinn, Johnny Depp, and Veronica Lake offer insights, emphasizing the importance of financial discipline and strategic planning. By analyzing the financial downfalls of these individuals, the article highlights the broader lesson: financial success is not solely about earning wealth but also about effectively managing and preserving it. Through this investigation, the article emphasizes the need for a deep understanding of financial concepts, such as budgeting, investing, and maintaining fiscal responsibility, to ensure long-term financial stability.


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EUROPEAN INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH
AND MANAGEMENT STUDIES

ISSN: 2750-8587

VOLUME04 ISSUE12

143


WHY RICH FAMILIES’ GENERATIONS BECOME POOR?

Urazboyev Feruzbek

Target International school, Uzbekistan

AB O U T ART I CL E

Key words:

Budgeting, investing, and

maintaining fiscal responsibility.

Received:

03.12.2024

Accepted

: 08.12.2024

Published

: 13.12.2024

Abstract:

This article explores hidden reasons

behind bankruptcy of prominent individuals,

focusing on both billionaires and millionaires. It

examines

how

mismanagement,

reckless

spending, and poor financial oversight can lead to
the loss of significant fortunes, despite having

substantial income. The stories of figures such as

Mike Tyson, Sean Quinn, Johnny Depp, and

Veronica Lake offer insights, emphasizing the
importance of financial discipline and strategic

planning. By analyzing the financial downfalls of

these individuals, the article highlights the

broader lesson: financial success is not solely
about earning wealth but also about effectively

managing and preserving it. Through this

investigation, the article emphasizes the need for

a deep understanding of financial concepts, such

as budgeting, investing, and maintaining fiscal
responsibility, to ensure long-term financial

stability.

INTRODUCTION

It is true that making a way for middle-class comfort and beyond from poverty is no longer a delusion

but real progress. By understanding concepts such as inflation, compound interest or diversifying

investments, individuals manage to significantly improve their financial stance. Take Madam C.J.

Walker, for example, who grew up in a poverty and worked as a domestic servant from a very young

age. With the right support and mentorship, she became first female self-made millionaire in America.
Additionally, in 1901 Andrew Carnegie, who underwent almost similar hardships, became the

VOLUME04 ISSUE12

DOI:

https://doi.org/10.55640/eijmrms-04-12-26

Pages: 143-146


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EUROPEAN INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH
AND MANAGEMENT STUDIES

ISSN: 2750-8587

VOLUME04 ISSUE12

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wealthiest self-made man in the world through smart investing, hard work, and proper education.

Clearly, people who gain even a glimpse of financial concepts can transform their lives from poverty.

Although reasons of such positive economic shifts are widely acknowledged, little is known about those

went from wealthy stance to poor condition. In other words, less research was heretofore done about

how one can lose his or her wealth unconsciously. Therefore, it has been found meaningful - and even

necessary - to investigate reasons behind going bankrupt while earning an above average. By looking

at the two categories: billionaires and millionaires, this article will analyze reasons behind financial

downfalls of individuals in each group.

BILLIONAIRES

Mike Tyson is an American former professional boxer who was born on June 30, 1966. Known as “Iron

Mike” in his early fights, he was recognized as one of the greatest heavyweight boxers of all time. Desp

ite

his promising boxing career and salary of at least $400 million, according to The New York Times report,

he officially filed for bankruptcy due to his poor financial management skill. It’s been reported that Mike

would spend thousands of dollars for a single jewelry at a time. He once bought $173,706 worth of gold

chain while visiting a Las Vegas jewelry store. Such lavish spending habits eventually contributed to

$23 million debt accumulation over years. Because of such poor financial management, Iconi

c boxer’s

current estimated net is $10 million. Similarly, Sean Quinn (born in 5th December, 1947) is an Irish

businessman. Although he was regarded as the richest person in Republic of Ireland in 2008, after 4

years he was declared bankrupt. This is believed to be due to his lack of management skills and huge

debt from the banks.

MILLIONAIRES

Johnny Depp (born June 9, 1963) is an American actor, producer, and musician, best known for his
versatile roles in a wide range of films. He gained global fame for his portrayal of Captain Jack Sparrow

in the Pirates of the Caribbean franchise, which became one of his most iconic roles Over the years, his

performances have earned him several accolades, including Golden Globe and Screen Actors Guild

Awards. However, despite earning millions per film and grossing over $3 billion from his movies, Depp

nearly went bankrupt due to extravagant spending and poor financial management. In 2017, he sued

his business managers, claiming they mismanaged his fortune and charged excessive fees. By 2016, he

had burned through $650 million, with expenses like 14 properties, a massive yacht, and a 40-person

payroll. Depp’s downfall was cushioned by his ongoing income from successful franchises like Pirates

of the Caribbean, allowing him to avoid bankruptcy. His story highlights the dangers of reckless


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EUROPEAN INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH
AND MANAGEMENT STUDIES

ISSN: 2750-8587

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spending and the importance of proper financial oversight, as well as the value of negotiating fair

compensation, as Depp did with his iconic role in Pirates. Moreover, Veronica Lake (November 14, 1922

July 7, 1973) was an iconic American actress, renowned for her captivating performances and

exceptional style. She was best known for her femme fatale roles in 1940s films like “This Gun for Hire”

and “The Blue Dahlia”. She was also famous

for her signature peek-a-boo hairstyle. However, despite

her early fame, Lake’s career began to decline due to personal struggles, including a serious addiction

to alcohol, which most likely affected her financial stance, and in 1951 she declared bankruptcy,

marking the end of her film career.

CONCLUSION

The stories of both billionaires and millionaires who went bankrupt share almost the same thread: the

poor financial management, reckless spending, and the lack of proper oversight. Whether it’s the

luxurious lifestyle of Mike Tyson or Johnny Depp, or the poor investment decisions of Sean Quinn, these

individuals’ mistakes highlight how wealth can quickly disappear without careful consideration and

planning. However, their journeys serve as cautionary tales for those aspiring to achieve financial

success, highlighting the importance of understanding financial concepts. As demonstrated by the likes

of Madam C.J. Walker and Andrew Carnegie, the path to financial prosperity is not just about earning
large

sums, but making smart decisions, diversifying investments, and maintaining control over one’s

financial habits. After all, Life is unpredictable. Without a safety net, unexpected events like medical

emergencies or job losses can quickly drain savings and push people into debt.

REFERENCE

1.

6 Rich Celebrities Who Went Broke and Declared Bankruptcy. (no date). Available from

https://www.moneycrashers.com/bankrupt-celebrities-rich-broke/.

2.

Anon. (no date). 6 Rich Celebrities Who Went Broke and Declared Bankruptcy. Available from

https://www.moneycrashers.com/bankrupt-celebrities-rich-broke/.

3.

Carden, A. (2024). How Rich People Create Poverty | The Daily Economy. Thedailyeconomy.org.

Available from https://thedailyeconomy.org/article/how-rich-people-create-poverty/.

4.

Clark, A. (2022). How Madam C.J. Walker Became a Self-Made Millionaire. HISTORY. Available from

https://www.history.com/news/madam-cj-walker-business-millionaire.

5.

Constantine, K. (2023). Top 5 ways billionaires are bad for the economy. www.oxfamamerica.org.
Available from https://www.oxfamamerica.org/explore/stories/top-5-ways-billionaires-are-bad-

for-the-economy/.


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EUROPEAN INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH
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6.

Lleras, C. (2005). Path Analysis. Encyclopedia of Social Measurement, 25

30. Available from

https://doi.org/10.1016/b0-12-369398-5/00483-7 [Accessed 7 October 2021].

7.

Srivastava, P. (2024). Billionaires Who Went Broke | Bankrupt Billionaires. StartupTalky. Available

from https://startuptalky.com/billionaires-bankruptcies/ [Accessed 3 December 2024].

References

Rich Celebrities Who Went Broke and Declared Bankruptcy. (no date). Available from https://www.moneycrashers.com/bankrupt-celebrities-rich-broke/.

Anon. (no date). 6 Rich Celebrities Who Went Broke and Declared Bankruptcy. Available from https://www.moneycrashers.com/bankrupt-celebrities-rich-broke/.

Carden, A. (2024). How Rich People Create Poverty | The Daily Economy. Thedailyeconomy.org. Available from https://thedailyeconomy.org/article/how-rich-people-create-poverty/.

Clark, A. (2022). How Madam C.J. Walker Became a Self-Made Millionaire. HISTORY. Available from https://www.history.com/news/madam-cj-walker-business-millionaire.

Constantine, K. (2023). Top 5 ways billionaires are bad for the economy. www.oxfamamerica.org. Available from https://www.oxfamamerica.org/explore/stories/top-5-ways-billionaires-are-bad-for-the-economy/.

Lleras, C. (2005). Path Analysis. Encyclopedia of Social Measurement, 25–30. Available from https://doi.org/10.1016/b0-12-369398-5/00483-7 [Accessed 7 October 2021].

Srivastava, P. (2024). Billionaires Who Went Broke | Bankrupt Billionaires. StartupTalky. Available from https://startuptalky.com/billionaires-bankruptcies/ [Accessed 3 December 2024].