This is a story by someone who is close to me, and is about how fortune, easily gained, can also be easily lost.
From Riches To Rags…
This is a story about an aunt and her husband who lived a very humble life. The story starts out when she ran away from home and eloped with her to-be-husband, a man twenty years older. They were married and lived a normal life, until one day, the husband’s father passed away and left a great fortune to his only son. They didn’t know about the fortune at first; it was waiting for them in the house, waiting to be discovered. Sometimes, however, good fortune can be gone as quickly as it has arrived.
The great discovery
After the husband’s father passed away, he left his house to his only son, and he moved in with the family. One day, they were cleaning up the house, and then by chance, the aunt discovered a big basket under the bed in the master bedroom. She pulled the basket out from under the bed, and therein lied a great fortune: at least 20 giant gold ingots, the culmination of a lifetime of savings by the husband’s recently departed father. They had been sitting there all of this time, just waiting to be discovered.
They were understandably overjoyed at their discovery, and they started to think of all of the great things that they could do with their new-found wealth. Without any further delay, the aunt immediately sold all of the gold for cash, and at that time the 20 gold ingots were worth about $5,000,000.
Life was great in the beginning. The great discovery had immediately turned their fortunes around. The man had children from a previous marriage and he also had one son with the aunt, who was their favored child. While one daughter had to sleep in the basement along with the maid, the son was sent to Hawaii to study at the university.
Life was good in Hawaii. Everyone knows that Hawaii is where it’s at, but life is just that much better when you’re in Hawaii and you have money, too. The son had an allowance of $10,000 a month, ate at the finest restaurants, hung out with the rich and famous, and to top it all off, he was pimpin’ with a brand new Lexus.
Is there anything wrong with that? Not necessarily. My friend tells me that he was a really nice guy.
The aunt and husband were living a good life back at home, too. During the day, she enjoyed the spa, and he traded stocks. At night, they enjoyed the good company of friends as they ate fabulous dinners and feasts. On the weekends, an overseas trip was not out of the question.
They went and bought a second home that they could retreat to when they wanted to escape the first home. The aunt and her husband seemed to be doing so well, and they left the impression that they were also good investors and knew how to grow the money. They made a good case, and my friend’s mom decided to invest $100,000 with them.
After 5 years had passed, it became apparent to everyone that the aunt and the husband had not been investing at all — instead, they had been drawing down on their capital, which was finally reaching its limits, and when it ends, it ends hard.
They were running low on funds, had massive debts to pay, and nobody in the family was willing to “invest” or lend any more money to them. They declared bankruptcy and lost the second house, and then they lost the first house as well. Their son was forced to return home from Hawaii, though at least he had been able to finish his studies.
Once the dinners stopped, the friends stopped coming over, and family that never saw their money again were very displeased. They had to move into an apartment, and returned to the humble life that they used to know, before they had stumbled onto their fortune.
They lost everything, and my friend’s mom never saw a dime from her initial $100,000 investment.
- One cannot live on capital consumption for the long term. In other words, easy come, easy go.
- The grass is not always greener on the other side of the fence.
- Proceed with extreme caution when investing with family and friends.
Other great posts in the coffee roundup:
- What my Dysfunctional Family Taught Me About Life (First Gen American)
- What My Dysfunctional Family Taught Me about Personal Finance (Budgeting in The Fun Stuff)
- Coffee Talk: A Few Things I Learned from my “Old Contract” Grandfather (101 Centavos)
- Lessons I’ve Learned from my Dysfunctional Boss (Molly On Money)
- What My Dysfunctional Dog Taught Me About My Limits (Growing My Girls)
- What My Dysfunctional Father Taught Me About Love (Krusty On Chrissy)
So, reader, what are your thoughts? Is this a true story, or is it an analogy? You decide. I’d love to hear your stories.