For the first time in decades the super-rich are suddenly not getting richer anymore. In fact, they're becoming poor! Take John McAfee for example, whose $100-million fortune has now dwindled down to a measly $4-million.
This horrific news is brought to us today by those tireless chroniclers of the plight of the rich, the New York Times, in a story about how the "super-rich" are just losing their asses all over the place.
For every investment banker whose pay has recovered to its prerecession levels, there are several who have lost their jobs - as well as many wealthy investors who have lost millions. As a result, economists and other analysts say, a 30-year period in which the super-rich became both wealthier and more numerous may now be ending.
As an example of how dramatic the fall has been for some of the aforementioned super-rich, profiled in the story is John McAfee of the McAfee anti-virus software McAfees. He founded the company in the late 80's and cashed out a couple of years after it went public in 1992, walking away with $100-million in the process. Over the years McAfee maintained his fortune by investing in real estate and Lehman Brothers bonds. This did not end well.
In 2007, Mr. McAfee sold a 10,000-square-foot home in Colorado with a view of Pike's Peak. He had spent $25 million to buy the property and build the house. He received $5.7 million for it. When Lehman collapsed last fall, its bonds became virtually worthless. Mr. McAfee's stock investments cost him millions more.
One day, he realized, as he said, "Whoa, my cash is gone."
He has sold a 10-passenger Cessna jet and now flies coach. This week his oceanfront estate in Hawaii sold for $1.5 million, with only a handful of bidders at the auction. He plans to spend much of his time in Belize, in part because of more favorable taxes there.
Next week, his New Mexico property will be the subject of a no-floor auction, meaning that Mr. McAfee has promised to accept the top bid, no matter how low it is.
So now McAfee is left with roughly $4-million dollars to survive on. That's crazy when you consider that just two years ago our Gawker Media overlord Nick Denton did a Valleywag post noting the contrast between McAfee and Critical Path founder David Hayden in competing profiles of the two men in the New York Times and Wall Street Journal. McAfee's profile focused on his carefree "sky gypsy" lifestyle with his much younger girlfriend, while Hayden's focused on how he was having to sell his art and furniture to survive. Two years ago! Oh how times have changed!
Now, whether McAfee is worthy of pity or not is up for debate, but it's hard to argue that it's better to have been rich and lost it all than never to have been rich at all.