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According to the Credit Suisse Global Wealth report, the number of American millionaires totaled about 21.9 million as of 2021, or about 6.6% of the total U.S. population. While that's a staggering amount of wealthy people, the relatively small percentage underscores how difficult it remains to become a millionaire. Even some of the most famous names in business have made huge financial errors that could have cost them their millionaire status. Yet, in most cases, these savvy business people learned from their mistakes and went on to enjoy even greater prosperity.
Big financial failures don't necessarily have to be obstacles to long-term wealth -- just see this list of worst investments made by famous millionaires.
Last updated: July 9, 2021
Bad Marketing Idea: Barbara Corcoran
This self-made millionaire and real estate mogul is perhaps best known for being one of the namesake "sharks" in CNBC's wildly popular television series "Shark Tank." After a spotty academic career and 20 different jobs by the time she was 23, Corcoran finally hit it big in real estate. Yet, she would be the first to share that reaching her estimated net worth of about $100 million didn't come without some bumps in the road.
After her real estate conglomerate The Corcoran Group made its first big profit, the mogul invested $71,000 putting her real estate listings on videotape, with each listing accompanied by its respective agent. It didn't take her long to realize that her five-digit investment was essentially worthless, as no agent wanted to hand out promotional materials featuring other agents and their listings.
Dexter Shoe Company: Warren Buffett
Warren Buffett, the small-town billionaire with the folksy charm, has picked many losers on his way to his status as one of the 10 richest people on the entire planet. The CEO of Berkshire Hathaway, dubbed the "Oracle of Omaha," is never afraid to fess up to his bad stock picks.
In his 2007 letter to shareholders, Buffett said that his 1993 purchase of Dexter Shoe Company was "To date...the worst deal that I've made." Buffett believed that the shoe company had an unassailable moat, but its competitive advantage vanished within just a few years. Even worse, by making the $433 million purchase with Berkshire Hathaway stock, Buffett estimates he cost shareholders about $3.5 billion.
Credit Card Interest: Mark Cuban
Billionaire Mark Cuban is easily the wealthiest of the sharks on CNBC's "Shark Tank," and the show's only billionaire, with an estimated net worth of about $4.4 billion. The outspoken owner of the NBA's Dallas Mavericks told Business Insider in 2014 that no one should ever carry a balance on credit cards. According to Cuban, what he wished he knew most in his 20s was "That credit cards are the worst investment that you could make. That the money I save on interest by not having debt is better than any return I could possibly get by investing that money in the stock market."
Cuban speaks from personal experience, as he told Money in 2017 that "The hardest lesson I learned was getting my credit cards ripped up....I can't tell you how many credit cards I had ripped up."
Pets.com: Jeff Bezos
Jeff Bezos, the founder of online retailing giant Amazon.com, has had his own string of failed investments on his way to the title of wealthiest individual in the world. One of his most noteworthy was Pets.com. In 1999, Amazon contributed to a $50 million funding round for the online pet retailer, in conjunction with other partners. By the end of 2000, barely over one year later, Pets.com announced it was shutting its doors, making that investment essentially worthless. Of course, that poor investment didn't slow down Bezos or Amazon.com itself, as the company now has the fourth-largest market capitalization of any company in the world.
Shorting Valeant Pharmaceuticals: Bill Ackman
Billionaire hedge fund manager Bill Ackman made waves in 2012 when he took his short position in nutrition company Herbalife public. Ackman bet $1 billion that the stock of the company would eventually tumble to zero, repeatedly calling the company a fraud in public arguments and presentations. By 2018, Ackman had to surrender, quietly announcing that his hedge fund, Pershing Square Capital Management, was no longer betting against the company. Rather than going bankrupt, Herbalife stock had more than doubled during the time Ackman held his short positions, trading from $45 to $92 per share.
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Blockbuster: Carl Icahn
If you're younger than about 20 years old, you've probably never even heard of Blockbuster. But before the days of Netflix and streaming on demand, Blockbuster was the king of the jungle if you wanted to watch movies at home. The stock was a darling even among the Wall Street elite, like Carl Icahn. Yet, the company eventually met its demise and went bankrupt in 2010. As Icahn told Business Insider in 2011, "Blockbuster turned out to be the worst investment I ever made. It failed because of too much debt and changes in the industry. It had too many stores, Netflix created a better business model and then Redbox kiosks and the whole digital phenomenon eliminated the need for consumers to go to a separate DVD store."
Icahn reportedly lost about $191 million from his Blockbuster investment.
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Day Trading: Yusaku Maezawa
Day trading can be an exciting and even profitable venture. If nothing else, buying a hot stock and then taking a quick profit is an adrenaline rush. This has perhaps never been more evident than in 2021, when so-called "meme stocks" like Gamestop have jumped 400% in a single week, and AMC Entertainment skyrocketed more than 2,200% in the first half of the year. But billionaire Yusaku Maezawa, the former CEO of e-commerce company Zozo, is living proof that day trading isn't for everyone.
As Maezawa puts it, "I was blinded by the virus-driven market swings and lost 4.4 billion yen through repeated short-term trading of stocks, something I haven't familiarized myself with. With 4.4 billion yen, how many people could the money have been given out to and saved?" The 4.4 billion yen Maezawa lost translates to about $41 million USD.
Derivatives: Sean Quinn
Sean Quinn may not be a household name to most Americans, but at one point he was Ireland's richest man. He lost most of his fortune by investing in Anglo Irish Bank using special types of derivatives known as contracts of difference. When the bank later collapsed during the global financial crisis of 2008, Quinn effectively lost his entire investment. Quinn later ended up bankrupt.
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Waumbec Textile Company: Warren Buffett
Warren Buffett makes the list yet again with his soured investment in Waumbec Textile Company. The error so stuck with Buffett that he highlighted his failed purchase in the New England textile firm -- which he bought in 1975 -- in his letter to shareholders in 2014, a full 39 years later.
According to Buffett, "...the purchase price was a 'bargain' based on the assets we received and the projected synergies with Berkshire's existing textile business. Nevertheless -- surprise, surprise -- Waumbec was a disaster, with the mill having to be closed down not many years later."
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A Town: Kim Basinger
Bad investments aren't limited to millionaire entrepreneurs. Celebrities have also made major financial missteps that have cost them millions. Model and Academy Award-winning actress Kim Basinger famously bought the town of Braselton, Georgia, in 1989 for $20 million. Her intention was to turn the town into a tourist attraction, with recording and movie production studios to boot. Within five years, Basinger turned around and sold the town for just $1 million, losing about $19 million in the process.
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