Temporary Wealth – 6 Common Blunders of the Rich That Vaporize Their Wealth

Tom Corley boats - crop

Sometimes rich people stop being rich. Things can go wrong. Sometimes those things that go wrong are outside the control of the wealthy (i.e. random bad luck) but more often than not they are things that are completely within their control.

As a CPA, I’ve been advising wealthy individuals in money matters for more than 30 years. Plus I spent five years studying the money habits of the rich and the poor (Rich Habits Study). In my CPA business and from my research, I’ve written books, articles and done many TV and radio interviews about the many blunders wealthy individuals make that cause their wealth to evaporate. You would think they’d know better but they don’t. The wealthy who make these mistakes all seem to be reading from the same script. So, I thought I’d share a few of the most common blunders of the rich that steal their wealth like a thief in the night:

  1. Penny Wise and Pound Foolish Many millionaires are frugal. By frugal, I mean they penny pinch dry cleaner costs, bank fees, credit card fees, landscaper costs, grooming expenses, such as haircuts and manicures, professional service fees, such as CPAs, attorneys, doctor and dentist charges. They will fight like a hell if they think they were overcharged for a grocery item or a restaurant charge. And then these same penny pinchers will go out and buy an expensive boat, Tesla, a diamond ring, Rolex, or take an absurdly expensive vacation. I have seen far too many wealthy business owners fight to keep wages down at their business only to spend their hard fought savings on yachts, big homes or expensive cars. It’s as if they have Jekyll and Hyde battling it out inside their very own minds. While it’s a Rich Habit to watch your pennies, it is a Poor Habit when you take those hard earned pennies and make an expensive emotional purchase.
  2. Sheep in Wolf’s Clothing – The vast majority of the rich in my study and in my CPA practice are long-term investors. They buy, hold and never panic. In fact, when the economy turns south they might even double down on their investments, buying more at a discounted price. But I’ve seen some wealthy individuals who invest aggressively and continue to do so until the economy turns south. Then they panic and begin unloading their investments. These so-called “aggressive investors” are actually conservative investors in disguise. They are sheep in wolf’s clothing. And their wolf disguise comes flying off the moment they start losing money.
  3. Ignore The Devil is in the Details – Most wealthy individuals become wealthy in one of four ways: #1 They Live Below Their Means (save more than they spend), #2 They Expand Their Means (grow their income), #3 They Do Both (save and grow income), or #4 They Inherit Their Money. Some of the individuals who fall into the Expand Their Means or Inherit Their Money categories have something in common – they often do not pay attention to the devil in the details. What I mean is that they don’t review their monthly bank statement, monthly bills or monthly credit card statements in order to make sure there are no unauthorized transactions or fees. They also don’t review certain transactions such as hotel bills, retail purchases or restaurant tabs to make sure they were not overcharged and paid the correct amount. They also don’t review their expenses at least once a year to see if they can reduce those expenses for the following year. For example, cable and cell phone costs keep going down due to increased competition. If you don’t spend any time trying to find the lowest price, it could result in you paying more than you should.
  4. Eggs Are All in One Basket – In my Rich Habits study I discovered that those with the greatest amount of wealth had three or more streams of income. This was strategic. When one stream dries up due to economic downturns, the other streams of income can come to the rescue like a knight riding on a white horse. But some rich people make the mistake of tying the bulk of their assets up in one place, such as their own business or in real estate, two very illiquid investments. For these wealthy individuals, when something goes wrong they are forced to sell some of their investments at a discount or increase their debt by securing a loan or tapping their credit line.
  5. Lack of Proper Planning – Another common money misstep is lack of proper planning. The three big missteps in this category include: #1 Lack of Adequate Retirement Planning, #2 Lack of Adequate Estate Planning and #3 Not Having an Updated Will. When Prince died he had no will and no estate planning. Settling an estate with an old will or no will at all increases the costs of probate. Also, without an estate plan in place, you will pay higher federal and state estate taxes and inheritance taxes. Millions of dollars of Prince’s estate will now go to paying the salaries of politicians.
  6. Generous to a Fault – Too much of anything is bad and this applies with giving away your money. Once you give away your money, it’s gone. Self-made millionaires are pretty responsible when it comes to distributing their wealth to others in need, but those who inherit their money or where the money comes with little effort, have a tendency to be irresponsible with their giving. Those who don’t have to work very hard for their wealth simply do not value their money as much as they otherwise would and they have a tendency to give too much of it away to their family, friends or charities.  Once people find out you’re rich they hit you up for money. It can come from every direction and overwhelm you. Those who anticipate this deluge establish a maximum amount of money they are willing to give away every year.

Staying wealthy is not as hard as getting wealthy, but it’s still hard. Any one of these six missteps can act like an anchor dragging you down off your mountain of wealth. Being aware of them is probably the best insurance you can have to preserve your wealth.



Be Sociable, Share!
Thomas C. Corley About Thomas C. Corley

Tom Corley understands the difference between being rich and poor: at age nine, his family went from being multi-millionaires to broke in just one night, due to a catastrophic fire that destroyed his Dad's thriving business. For fourteen years they struggled with poverty. There were eleven in Tom's family, and they lived in constant fear of losing their home.

Driven by the desire to unlock the secrets to success and failure, Tom spent five years studying the daily activities of 233 rich people and 128 poor people. He discovered there was an immense difference between the habits of the rich and the poor. During his research he identified over 300 daily activities that separated the “haves” from the “have nots.” Tom decided to write a book to share what he learned. That book, Rich Habits: The Daily Success Habits of Wealthy Individuals (1st Edition), went on to become an Amazon Bestseller in the United States forty times over a three year period. To give you some perspective, in order to be a true Amazon Bestseller in the United States, where you actually receive a specific Bestseller designation from Amazon, you need to be in the top 100 of all books sold by Amazon in the United States in a given day. Rich Habits did that for nearly thirty straight days, rising as high as #7, eclipsing such Bestselling authors such as Stephen Covey, Robert Kiyosaki and J.K. Rowlings. Imagine that - an unknown, first-time, self-published author selling more books than J.K. Rowlings!

Tom now travels the world, sharing his Rich Habits and motivating audiences at industry conferences, corporate events, universities, multi-level marketing group events, and global sales organizations’ presentations and finance conferences. He has even spoken on the same stage with famous entrepreneurs and personal development experts, such as Sir Richard Branson, Robin Sharma, Dr. Daniel Amen, and many others.

Tom has shared his insights on various national and international network, cable, and Internet television programs such as CBS Evening News, NBC News, Yahoo Financially Fit, Money.com, India TV, News.com Australia, and a host of others. He has been interviewed on many prestigious nationally syndicated radio shows, including the Dave Ramsey Show, Marketplace Money, and WABC.

Tom has been featured in numerous print magazines—such as Money magazine, Inc. Magazine, SUCCESS Magazine, Entrepreneur magazine, Fast Company magazine, More magazine, Epoca Magazine (Brazil’s largest weekly) and Kiplinger’s Personal Finance magazine—and various online publications, including USA Today, CNN, MSN Money, SUCCESS.com, Inc.com, and the Huffington Post. Tom is a frequent contributor to Business Insider, Credit.com, Bankrate.com and a few other media outlets.

National publicity has garnered international media attention for Tom and his Rich Habits research spanning 23 countries. Broadcast media, online publications, and television throughout Asia, the South Pacific, Europe, the United Kingdom, and Central and South America have shared his powerful message.

In an effort to help parents, grandparents, teachers and adults become success mentors to the younger generation, Tom released his second book, Rich Kids: How to Raise Our Children to be Happy and Successful in Life in 2014. This book was the self-help category winner of the 2015 New York Book Festival and Runner-up in the prestigious 2015 Writer’s Digest Self-Published Book Awards Contest. In 2016 Tom released his third book, Change Your Habits, Change Your Life. This book provides the latest science on habit change as well as more of Tom's unique research on the specific habits that helped transform 177 ordinary individuals into self-made millionaires.

Besides being an author, Tom is also a CPA, CFP, and hold a master’s degree in taxation. As president of Cerefice and Company, CPAs, Tom heads one of the premier financial firms in New Jersey.
Phone Number: 732-382-3800 Ext. 103.
Email Tom
| Download Media Kit


  1. Great article Tom, I totally agree about the wealthy having the ability to look long term. The high wants it all here and now and are not willing to be patient and have the ability to look at the big picture.

  2. I think it’s interesting that you included “lack of proper planning” as a reason that some people stop being rich. I usually think that someone who has stayed rich until they died as someone who was successful in, well, staying rich. However, as you pointed out, not having proper estate planning or a recent will can mean that a lot of your wealth will end up going to the government instead of to your family, which means that you do “lose” that money. Thanks for the article.

  3. Matthew C. Kriner says:

    thanks for nice information.i/


Speak Your Mind