Lost Fortunes

Lost Fortune TeslaWhere we are in life right now is a result of the the sum total of all our decisions, good or bad.  One aspect of economics that I find fascinating is hindsight, which is almost always 20/20.  Throughout history their are several accounts of fortunes lost, either due to circumstance or decision.  One of my favorite moments in the AMC TV show Breaking Bad is when Walter White is explaining his motivation for doing what he is doing.

“Jessie, Have you heard of a company called Grey Matter?”

“No”

“Well I co-founded it in gradschool with a couple of friends of mine, actually I was the one who named it, we had a couple of patents pending, but nothing earth shattering, but we all knew the potential. We were gonna take the world by storm…something happened between the three of us and for personal reasons I left the company. I sold my shares to my two partners. I took a buyout for $5,000. At the time that was a lot of money for me. Care to guess what that company is worth now?”

“I Don’t know…Millions?”

“Billions, with a B, $2.16 Billion as of last Friday. I sold my share, my potential, for $5,000. I sold my kids birthright for a few months rent.”

All I can say is OUCH. it has to be a heavy weight to know that you made 1 singular mistake that ended up costing that much money.  Throughout history there have been several instances of lost fortunes here are a few of the most interesting ones I have come across.

Apple Computers: 

We all know that Steve Jobs and Steve Wozniak created the original apple computer in the garage of Steve Wozniak in 1976, what most people don’t know is that there was a third partner, Ronald Wayne who sold his share of 10% of the company for $800.  He would be one of the richest men on earth today had he not sold his shares. 10% of Apple today is worth $69.7 Billion.  In all fairness, Wayne didn’t work for Apple for very long, only a matter of several weeks.

Lord of the Rings:

When the movie project for J.R.R. Tolkien’s series ‘The Lord of the Rings‘ was beginning development, it was far from assured of becoming a blockbuster success.  In order to get a noteable actor into the mix, the producers offered an amazing deal to none other than Sean Connery to play Gandalf.  As part of the deal, he would be paid $10 million per film, plus 15% of gross sales.  Had he accepted the deal, Connery would have earned over $450 million, not including the Hobbit series, which he would have been able to reprise his role for.   Connery stated that he didn’t understand the movie and didn’t want to be a part of it.  The project he took up instead? The League of Extraordinary Gentlemen, which became a major flop.

 

 Alternating Current

Nikola Tesla has fundamentally changed our world more than any other single human being in recorded history. This is not an overstatement.  Tesla invented radio before Marconi, he created alternating current and the AC motor, he created fluorescent lighting. He is the giant of technology that all of our 21st century society is built on.

Tesla was a hell of an inventor.  He briefly worked for Thomas Edison, who after screwing him out of a promised bonus, lost Tesla. Tesla later went to work for George Westinghouse and developed AC technology to compete with Edison’s DC.  Westinghouse had a contract promising a royalty to Tesla for $2.50 for every installed horsepower from AC motors.  When Westinghouse, now one of the largest corporations in the world, was on the verge of bankruptcy in 1897, Tesla ripped up the contract.  At the time Tesla was earning an inflation adjusted $48,000 a month in salary and millions of dollar a year in royalty payments.  Think about how much the electrical grid expanded from 1897 to his death in 1943. Over that span of almost 50 years Tesla’s patents would have earned him, and rightfully so billions of dollars.  He very easily could have become the wealthiest man on the planet, Even in the times of J.D. Rockefeller. Tesla was an inventor and not a business man, which explains why he died essentially penniless, although Westinghouse did support him during his later years.

Polio Vaccine

Jonas Salk gave mankind an amazing gift.  He essentially cured the world of the scourge of Polio. Polio has affected man for thousands of years, and in the first half of the 20th century affected hundreds of thousands of people, and often resulted in paralysis. Jonas Salk worked tirelessly to develop a vaccine and did so in 1955.  Widespread use of Salks vaccine have pushed this disease to the brink of extinction.  The work of the Rotary Club and The Bill and Melinda Gates Foundation have reduced Polio by 99% in the last 20 years, with all that remains being a few countries where war and violence have greatly reduced the ability of health workers to finish the job.  In the next few years Polio will be the second disease, behind smallpox, to be eradicated by man.  Jonas Salk could have made $2 -$7 billion dollars in royalties from the vaccine, but he refused to patent it.

There are many lost fortunes of rulers in history, such as the inflation adjusted $300 Billion of Czar Nicholas II of Russia,but as far as individual fortunes lost, or given away what other people come to mind?

Check out our new article, Lost Fortunes 2.

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John is the author of the book For My Children's Children: A Practical Guide For Building Generational Wealth.

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