This is Why Most American Millionaires Did *Not* Inherit their Fortunes…
Posted: June 24th, 2011 | Author: Joe | Filed under: Debt | Tags: celebrity bankruptcy, news, Patricia Kluge | 2 Comments »It’s a common misbelief that many of the wealthy in America inherited their money. In fact, most of the wealthy in America are entrepreneurs. Warren Buffett and Bill Gates are two of the most well known and celebrated self-made men of modern times.
Still, you would think that the children of such successful entrepreneurs would increase the other side of the statistic, and over time more of the wealthy would be those who had inherited their wealth. Why doesn’t this happen?
Well, I came across this article today that does a good job of highlighting some of those who’ve inherited their wealth, and what typically happens to them.
It’s about Patricia Kluge who has filed for bankruptcy. She “once hosted parties for ‘royalty, corporate chieftains, celebrities, and literary figures.’ She lived in a 23,500-square-foot mansion, owned a winery and, by all accounts, lived the good life.” Sounds like the picture of success, right? So what happened?
Like every person who inherited their wealth, she never earned it! It seems she was famous for being “the wealthiest divorcee in history.”
Inheriting your wealth is a lot like winning the Lottery. You wake up one morning and BAM! you have more money than you know what to do with. But since you didn’t have to work hard to earn it, you don’t know how to properly manage it and how precious it is.
The article also mentions Barbara Hutton, heiress to the Woolworth fortune. She was involved in a string of serial marriages (including actor Cary Grant!) and lost everything due to poor money management, and bad advice to die at the age of 66, with $3,500 to her name.
Johnson and Johnson heiress Casey Johnson also lost everything by the time she died, cut off from the family fortune and owing more than $100,000 .
Athletes and entertainers also belong to this group, though at first glance you’d think they don’t since they didn’t inherit their fortunes. But does anybody seriously believe for a minute that the M.C. Hammer’s, Michael Jackson’s and Lady Gaga’s of the world earn the money they make? Are they really worth that kind of wealth? Of course not. They simply hit a fad in the right place at the right time and became mega-stars. Next thing they know, BAM! a pile of money falls into their lap.
But they too lack perspective on creating wealth, have little to no clue how to manage money and often go broke soon after hitting their peek.
This, my friends, is the future of Paris Hilton as well.
As for Kluge, one final piece of irony: she is now employed by the winery she once owned. Maybe now she’ll learn a thing or two about earning and managing money. 
First of all yes I do believe that certain celebrities earned their wealth, while Michael Jackson and his siblings were “forced” into entertainment by their dad, Michael did earn his wealth and his success. He danced, he sang, he worked with people who worked with his strengths. Remember when he was a little boy he had to be good, because if he wasn’t good then his dad would punish him.
So did lady gaga and so did M.C. Hammer, Hammer has gotten out of debt as well. He became a preacher. Just because they’re celebrities is no need to be joyful when they make bad decisions. Everyone makes bad decisions at some points of their lives.
Why did the wealthy trust Madoff with their money, he promised to “diversify” for them but instead he took them for all they’ve got. So no matter how much money you got its important not to trust one individual with your money management. It’s really important to diversify and avoid bad investments.
Entertainers work for their wealth. They may be entertainers but they do work. Your article seemed a little too joyful that certain wealthy people have fallen into hard time and that’s a shame. Just because they’re wealthy that is no reason to be cruel or joyful when they have problems.
I’m not wealthy at all but I do believe that everyone that is anywhere is there because for the most part they earned it, unless of course they inherited it. Why would you want anyone to fall into hard times? Look I don’t think that Paris Hilton is very interesting, but I don’t want her to become poor.
Right now I’m trying to pay for college which is seriously expensive so I’m working to get my tuition paid for. I’m a poor college student and I don’t wish poverty upon anyone. Why would I? I don’t want Paris Hilton to be poor either. Yes she’s spoiled because she never had to earn anything but honestly I don’t want her to be poor.
It’s a horrible way of life and I don’t wish it upon anyone and neither should you.
Jaime, I agree on most counts, and I wasn’t saying that performer don’t work or sacrifice. I only meant to equate many with lottery winners in the sense that they suddenly become very wealthy, very quickly. So many never worked their way to wealth in the sense of building it up over time like entrepreneurs. Instead, they get it all very quickly, much like inheriting it and so they have no idea how to manage it and end up living way beyond their means, even when their means are measured in millions.