Wall Street has experienced volatility a number of times since March 2020. COVID-19, GameStop’s activist short squeeze, and the Suez Canal blockage all shook up worldwide commerce. Investment firm Archegos Capital Management could be the next major story. The fund’s multi-billion dollar overleveraged bets on media companies like ViacomCBS and Discovery have come crashing down, throwing Wall Street into disarray. Though the dust has yet to settle, the firm’s founder, Bill Hwang, may have gone from billionaire to broke.
It is rare for a person who has reached the status of billionaire to ever lose it — but it is not unheard of. Most people with the business savvy to amass billions of dollars also know how to maintain their fortune. Occasionally, however, someone who was at one time worth billions sees their net worth drop to near zero.
24/7 Wall St. researched reports of wealthy individuals who lost their fortune. We found more than a dozen billionaires who have gone broke. Only one went broke because he gave away his money.
Typically, the billionaires we examined lost their money either because of bad investments or criminal activity. Several are notorious scammers who raked in billions of dollars by lying to investors or cooking the books to make their business appear more successful.
Other people got their billions through divorce but were unable to maintain their wealth, either because of bad investments or lavish spending.
The ultra wealthy can generally stay rich by diversifying their holdings to protect themselves from economic turmoil as well as by hiring the top money managers that can help shield them from recessions. Throughout the COVID-19 pandemic and resulting financial fallout, the net worth of America’s 614 billionaires grew by over $900 billion, collectively.
Chuck Feeney is unique on this list of billionaires who went broke because his substantial net worth loss was intentional. Feeney founded Duty Free Shoppers, the airport retailer, then launched private equity firm General Atlantic, accumulating a net worth of around $8 billion. He decided to give virtually all his money away to various domestic and international charities and philanthropic efforts over his last 40 years or so. In September 2020, Feeney closed down his philanthropy company, having given away his wealth, minus retirement savings for him and his wife.