How to turn 100m into 4m in just 15 years

A friend sent me a link to a painful but potentially enlightening New York Times article this week: Software Entrepreneur’s Property Is Sold at Auction. This story is common but too little discussed; and the lessons from it can be helpful to all that will hear.
John McFee, started McAfee Associates in the late 1980s to sell computer antivirus software, and made a fortune of about $100 million by 1994, when he sold off the shares of his company, about two years after it went public. Mr. Mcfee then set about losing his fortune in a classically human string of bad investment choices and reckless spending. Proving once again, that when it comes to losing money 100 million can go just as easily as 100 thousand when deployed with disrespect.
Over the past 15 years, McFee had built several homes in remote locations, pouring in incredible sums for recreational pursuits like movie theatres, flying light-weight planes, plane hangars, guest houses and a fleet of antique cars. The collapse of real estate prices and the stock market the past couple of years wiped out big chunks of his capital, forcing him to sell off assets at a fraction of what he had spent on them. All of this underlines the wise adage that money goes where it is wanted and stays where it is well care for. It also reminds us that dumb buying and spending is not “investing”; the price we pay is our greatest risk; and no matter how much money we have, if we spend more than we make we will run out.
Hopefully Mr. McFee is enlightened by his experience and now wiser for it. Hopefuly others can use Mr. McFee as a inverse mentor and learn from his story without having to make the same mistakes. Remember: spend less, save more; once you sell your business protect your capital; timing is everything; don't lose money…don't lose money…humility and self-discipline above all else.

This entry was posted in Main Page. Bookmark the permalink.

One Response to How to turn 100m into 4m in just 15 years

  1. Anonymous says:

    Adding to Danielle's “How to turn 100m into 4m in just 15 years” here are a couple more gems of quoted advice to avoid such outcomes. The first is from Warren Buffett's two cardinal rules of investing: (1) Never lose money; (2) Never forget rule one. The other comes from another polymath, Mark Twain: “I am more concerned with the return of my money than the return on my money.”

Leave a Reply

Your email address will not be published.