Are You a Churchill or a Keynes?

This week I take a tongue-in-cheek look at a few famous people who have unfortunately managed to lose everything by making what seem like simple mistakes (I’m avoiding some more recent examples closer to home).

4 Terrible Investors …

Winston Churchill not only lost a fortune in the Wall Street Crash but also managed to squander much of the family inheritance on gambling and booze. He was only saved from bankruptcy by a ￡1 million gift from a secret benefactor in 1940. Even prime ministers can live beyond their means.

Mike Tyson made up to $30 million per fight and amassed career earnings of $400 million and yet his current net worth is thought to be around $1 million. Let’s just say he’s a spender not a saver - and tigers can be expensive. 

Nicolas Cage is another big spender. His film career has made him over $150 million but he is currently worth ‘only’ $18 million. His only weakness? Islands, castles, mansions, jets, luxury cars, rare art and jewellery.

Mark Twain lost all of his book earnings and most of his wife’s inheritance by investing (and losing) all of it on a new type of printing press. Which failed. The problem? Lots of eggs. One basket.

… and 4 Great Ones

Warren Buffett started off with investment capital of $100 thousand at the age of 25 and has turned it into a net worth of over $65 billion in his lifetime. He has always followed a patient highly disciplined methodology, investing only in so-called ‘value’ companies.  

John Maynard Keynes, in between writing seminal economic theories and saving the world, managed the investment fund of King’s College, Cambridge and produced returns that beat the market by around 8% annually over a period of 20 years. Mind you, he was also a Director of the Bank of England at the time which might have helped!   

George Soros started from nothing and created the most successful hedge fund of all time. Using his own distinctive trading system, he averaged returns of 20% per annum for many years. Needless to say, he also made himself a billionaire (times 23) in the process.

Carl Icahn was first a stockbroker before becoming an activist investor. He has used his stock ownership positions to force changes in organisations that drive up the share price. These methods, sometimes controversial, have earned him a net worth of over $20 billion. 

At Money Smart we can help you say no to the tiger and point you towards a long term low cost investing strategy. Talk to us on 01 276 0006 or email [email protected].