, On Tuesday March 8, 2011, 11:10 am EST
Damn those credit cards are easy. You just wave one in front of the cashier and poof! The thigh-high Sigerson Morrison boots are yours, hon! Just like that. And then one day you open your statement, expecting the worst, only to find, poof! They've increased your credit limit! Just like that.
Or, you go to the bank just to see what kind of mortgage you might qualify for. You walk out armed with a license to spend more money than you've ever dreamed of earning. Are you the Princess of Purchasing Power? Or a debt disaster waiting to happen?
Let's consider this story of a woman who was blessed with a lot of spending power. In 1990, Patricia Kluge of Virginia divorced her husband, American media billionaire John Kluge. Her divorce settlement was rumoured to be more than $1 billion. At the time, the interest on this would have generated around $1.6 million per week.
Ms. Kluge became known in the media as the "world's wealthiest divorcée." She was later eclipsed in this category by Anna Murdoch, who received a $1.7 billion settlement in 1999, and Slavica Ecclestone, whose divorce settlement in 2009 is said to be more than one billion and less than four. But that's another story.
The newly single Ms. Kluge spent her fortune grandly: on real estate, antique furnishings, spectacular jewels, foxes and hounds, the yoozh (that would be 'the usual' for those of you less refined). Week after million-dollar week, she must have felt invincible.
But pretty things can get boring and Ms. Kluge wanted to do something more meaningful with her wealth. She thought Virginia ought to have a world-renowned wine region and she had just the kind of energy, connections and bankroll to make it happen.
Thursday, March 10, 2011
A cautionary tale: How to go from billionaire to broke
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