4 ms·

Perhaps we have a different perception. To me, destruction of his personal wealth (going from $100M to $4M) is sad. Sure, he made bad investment choices, and I'

Perhaps we have a different perception. To me, destruction of his personal wealth (going from $100M to $4M) is sad. Sure, he made bad investment choices, and I'm in no way implying that he'll starve or go homeless, but I still find it sad. On the plus side, the man seems to have rediscovered his true self in the process.

_delirium 15y ago
True, though he actually seems to personally feel relieved by the loss. It sounds like he got stuck in a luxury-consumption trap, where he was spending all his time trying to live a multimillionaire's life (because he could), instead of things like starting companies. Now that most of it's gone he's back to new intellectual endeavors.
SwellJoe 15y ago
No actual wealth was destroyed. The real wealth may have gone from one rich man's pockets to another's. Or, in this case, a lot of it "trickled down" into the pockets of all the people who built his expensive playground and toys. Money is a representation of value; some of the "wealth" in this story was merely the result of a real estate bubble...it wasn't actually representative of longterm value, and he made poor bets on those properties. Some of it was transferred from one person to another, for the enjoyment of the spender, and resulted in goods that have much lower value to the market in general than to the original purchaser. That's pretty common of luxury goods. A new million dollar yacht will sell for dramatically less a few years later. It's not sad, it's just normal depreciation on luxury goods, and should be expected by anyone purchasing luxury goods. The extreme specificity and quirkiness of his luxury goods spending makes it even more likely to experience extreme depreciation.
- msellout 15y ago
  Not true. If his bank simply deleted his accounts, then no real wealth was destroyed. Unfortunately, he used his money to encourage the production of useless things. Real resources were consumed. As you point out, some of the value was saved through the producers' profits (and whatever real value the consumer received). However, if the sum of the final value of the product/experience and the value of the profits was less than what was initially paid, then real wealth was destroyed.
  - SwellJoe 15y ago
    In that case, pretty much all luxury goods are destroying some wealth, every time they're purchased. Which, I suppose I wouldn't argue with. But, I'm not sure that I buy that it's "sad" when luxury goods are produced or purchased. Maybe it is, though.
gruseom 15y ago
On the plus side, the man seems to have rediscovered his true self in the process Don't you think that's worth $96M? Sometimes people engineer these things unconsciously. There's a story in Jack Schwager's second Market Wizards book about a losing investor who, under hypnosis, says that he is trying to lose his money so his wife will leave him. To an outsider, that seems like an awfully complicated way to go about it. But who knows? We are fraught with contradiction.

_delirium 15y ago

True, though he actually seems to personally feel relieved by the loss. It sounds like he got stuck in a luxury-consumption trap, where he was spending all his time trying to live a multimillionaire's life (because he could), instead of things like starting companies. Now that most of it's gone he's back to new intellectual endeavors.

SwellJoe 15y ago

No actual wealth was destroyed. The real wealth may have gone from one rich man's pockets to another's. Or, in this case, a lot of it "trickled down" into the pockets of all the people who built his expensive playground and toys. Money is a representation of value; some of the "wealth" in this story was merely the result of a real estate bubble...it wasn't actually representative of longterm value, and he made poor bets on those properties. Some of it was transferred from one person to another, for the enjoyment of the spender, and resulted in goods that have much lower value to the market in general than to the original purchaser. That's pretty common of luxury goods. A new million dollar yacht will sell for dramatically less a few years later. It's not sad, it's just normal depreciation on luxury goods, and should be expected by anyone purchasing luxury goods. The extreme specificity and quirkiness of his luxury goods spending makes it even more likely to experience extreme depreciation.

msellout 15y ago
Not true. If his bank simply deleted his accounts, then no real wealth was destroyed. Unfortunately, he used his money to encourage the production of useless things. Real resources were consumed. As you point out, some of the value was saved through the producers' profits (and whatever real value the consumer received). However, if the sum of the final value of the product/experience and the value of the profits was less than what was initially paid, then real wealth was destroyed.
- SwellJoe 15y ago
  In that case, pretty much all luxury goods are destroying some wealth, every time they're purchased. Which, I suppose I wouldn't argue with. But, I'm not sure that I buy that it's "sad" when luxury goods are produced or purchased. Maybe it is, though.

gruseom 15y ago

On the plus side, the man seems to have rediscovered his true self in the process Don't you think that's worth $96M? Sometimes people engineer these things unconsciously. There's a story in Jack Schwager's second Market Wizards book about a losing investor who, under hypnosis, says that he is trying to lose his money so his wife will leave him. To an outsider, that seems like an awfully complicated way to go about it. But who knows? We are fraught with contradiction.