History's 6 Greatest Examples of Financial Fail

#3.
Mark Twain

Samuel Clemens aka Mark Twain was known to the world for having a bristly and majestic mustache that awed all who viewed it.

He also was a writer.

Even before he sold tons of books, he worked as a riverboat pilot, an extremely lucrative job for the time. He made $250 a month, the modern equivalent of $155,000 a year, which was still barely enough to keep his moustache fed.

Then he became a famous writer, and the money really poured in. And really, what was there to spend money on back in those days anyway? He was set for life, right?


This might not be him.

So What Happened?

The man hemorrhaged money like a hemophiliac breakdancing on a bed of machetes.

Twain was a habitual gambler, especially so in his predilection for funding speculative investments and a potpourri of inventions. He sunk piles of cash into inventions like an infant bed clamp (intended for affixing sheets, not infants) and a quickly obsolete typesetting device (losing him $4 million in today's dollars).

He even set aside work on "Huckleberry Finn" to concentrate on inventing a children's trivia game, a decision comparable to Bruce Willis shunning the Die Hard series to focus on his band.


Good idea!

Even if he was out of his depth with technology, it was a safe assumption that his publishing house would fare better. Unfortunately, when you make an "assumption" you make an "ass" out of "u" and "mption," because the opposite proved true. Even working in an industry he knew from the inside, every investment paid off about as well as if he'd just piled the cash and set fire to it.

In a letter to Fred Hall, who ran Webster & Co. publishing house, Twain moaned that, "I haven't got a penny to my name."

What We Can Learn from This:

Honestly, he said it best:

"October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February."

#2.
MC Hammer

Like it or not, for several years M.C. Hammer held the title as the best-selling hip-hop act in history. Not only did he bring a new standard of showmanship and energy to his genre, he managed to do it without terrifying honkies in the process.

His mainstream adoration translated into massive concert ticket sales, record-setting album sales and the failure of an entire generation to thoroughly question his wardrobe:

His trailblazing didn't stop there. M.C. Hammer's innovation helped him conjure previously unfathomed depths of selling out. Even modern marvels of the unabashed sellout such as Diddy haven't matched the scope of Hammer's marketing reach. So while lots of rappers lend their credentials to clothing lines, fragrances, and launching new pop acts, none can claim to have also achieved their own trading card...

...an action figure...

...and his own Saturday morning cartoon "Hammerman."

Sometime between meetings with various corporate profiteers he managed to find the time to sell over 17 million albums. At his peak, Forbes estimated that Hammer earned $49 million.

The beauty of it was that there was no risk of this financial security and easy-living causing Hammer lose his street edge. He never had one to speak of.

So What Happened?

The arrival of Dr. Dre and the whole g-funk phenomenon started to make acts like Hammer look like a bunch of cornball bullshit. Also, his tour in support of the "2 Legit 2 Quit" album had such high production costs that even sales of three million units couldn't support it.

Still, he had his $49 million, right? Well, by 1992, Hammer employed 200 people, with an annual payroll of $6.8 million. He still might have been able to pull that off had he not purchased a $20 million mansion in the hills above San Francisco Bay.

The 40,000 sq ft house featured Italian marble floors, a bowling alley, recording studio, 33-seat theater, 2 swimming pools, tennis courts, a baseball diamond, 17 car garage and, no joke, a gold toilet. He had originally considered putting in an 18 car garage, but thought it might come off as too flashy. Besides, it would have eaten into the budget he'd allocated to install the fire suppression sprinkler system he needed to mist Cristal over social gatherings.


A man with more fountains than foresight.

In April 1996, Hammer declared bankruptcy, citing assets of $9.6 million and debts of $13.7 million. Since then, he has attained the status of a folk hero of financial ruin, not unlike the lesser documented years of Paul Bunyan performing in The World's Largest Donkey Show with Babe to feed his smack habit.

Artists like Nelly revere Hammer's oblivion by asserting he'll "blow 30 mil[lion] like I'm Hammer," a boast that Hammer has happily welcomed coming to fruition for the mouthy punk.

What We Can Learn from This:

Hammer's situation, particularly pertaining to his excessive payroll of associates will ill-defined duties, perfectly exemplified the classical Austrian economic theories that demonstrate collapse of financial systems that endure the strain of excessive homies. This has likewise been cited in the collapse of the Bear Stearns Investment Firm, given its propensity to roll deep with hoodrats.

#1.
Dennis Kozlowski

With or without financial missteps, most of the people on this list would remain famous. Dennis Kozlowski holds the distinction of being famous expressly for his fiscal fuckupery. While economic shenanigans are hardly novel among white-collar criminals, his excesses showed the kind of panache that even made the CEO of Enron say "DAAAAMMMMNNNN!"

Kozlowski joined Tyco in 1975 and launched a secret 27-year plan to become CEO and sublimate his diligence into being a full-time douchebag. When he took the helm, Tyco's revenues grew by 48.7% a year from 1997 to 2001 and his compensation surged accordingly. He went from making $8.8 million to $170 million in just 3 years. While he loved his work, he lamented how little time it left him for swimming in his money pool or solving mysteries with his triplet nephews.


Actual photo.

So What Happened?

Kozlowski made an important discovery early in his career: the only thing sweeter than pulling down $170 million is not spending a dime of it while your company coughs up for everything. Prepare to put all of the Post-It notes you've pilfered from the office in perspective.

By abusing a number of Tyco's corporate resources and granting himself unauthorized bonuses in totaling $58 million, he went on an unrivaled spending spree. Starting small, he whetted his appetite for fraud by having Tyco sponsor his wife's birthday party. It was an intimate, $2 million affair featuring a discrete circle of a few dozen toga-clad friends on the island of Sardinia to see a private Jimmy Buffet concert.

Tyco picked up half of the tab, funding it as a work retreat, presumably because it was commonplace to host orgy-themed team building events with ice sculptures of the Statue of David pissing vodka.

He followed this with using Tyco funds to purchase a $19 million New York apartment and an additional $11 million to decorate it. The decorating budget may seem excessive, but it was only intended to pick up necessities like:

$6,000 on a shower curtain

$6,300 on a sewing basket

$17,100 on a traveling toilette box

$2,200 on a gilt metal waste basket

$2,900 on coat hangers

$5,960 on two sets of sheets

$1,650 on a notebook

$445 on a pincushion

$15,000 on a dog umbrella stand (the report was unclear if this was a dog-themed umbrella stand or a stand intended to hold umbrellas for his dogs)


Which is it, Dennis?

None of the items urinated vodka, but they certainly would have been retrofitted to do so if time allowed.

With all of his embezzlement he scarcely had time to spend his own money, but somehow managed to purchase a $30 million home in Boca Raton and the $16 million 130-foot racing yacht "Endeavor." He even had another 150-foot super-yacht in production valued at $25 million that he never got to take ownership of, leaving the manufacturer trying to sell a boat named "Suck It, Tyco Shareholder" at cost.

Ultimately art was his undoing, since he purchased $13 million in paintings for his NY apartment, including a Renoir and Monet, which he had shipped to Tyco Headquarters in New Hampshire because the state has no sales tax. This was a poor decision. Per the lesser known Double Secret Constitution For Powerful White Men, banal offenses like murdering a hooker or skimming corporate profits are benign, but don't even think about trying to weasel out of giving the government its cut.

The $1 million tax bill not only brought him up on Federal charges, but cast light on his rampant bilking of The Man. In 2002, Tyco accounted for over $100 million in fraud and sued for recovery and punitive damages. With his current prison income of $1 per day, he will have that debt paid off midway through the year 275,980.

What We Can Learn from This:

Nothing is surer to make Uncle Sam an angry drunk than depriving him of tax revenue. Secure the services of a reputable, yet morally bankrupt, accountant to track this. Or cut out the middleman and buy the I.R.S.

For some ways that you can be just like the celebrities in this article, check out 5 Retarded Get-Rich Quick Scams (People Still Fall For). Or use your photoshop skills to show us awesome ways to improve the Presidential debates..

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