Why the Rich Are Going Broke at Record Rates

In the popular imagination, wealth equates to safety. A luxury penthouse overlooking Central Park, a garage of supercars and a portfolio of blue-chip shares are supposed to insulate their owners from the financial shocks that trouble everyone else. Yet, as we move through the mid‑2020s, something unusual is happening: a growing number of the ultra‑wealthy are finding themselves not just a little poorer, but genuinely, sometimes spectacularly, broke.

This is not about a billionaire reluctantly parting with a third yacht or downsizing from a private jet to first class. It is about founders, property magnates and high‑earning professionals watching their apparent fortunes evaporate within months, often under the weight of their own strategies, assumptions and lifestyles.

What follows is an examination of why this is happening. The stories and examples are stylised, but the mechanisms are real. Together, they amount to a warning – not only for the wealthy, but for anyone tempted to copy their approach to money.

1. The “Buy, Borrow, Die” Strategy Turns Toxic

For the last decade and a half, one strategy became almost synonymous with sophisticated wealth management in the United States and beyond: “buy, borrow, die”. On the surface, it is elegant. In practice, in the wrong conditions, it can be catastrophic.

How “Buy, Borrow, Die” Works

Imagine an individual who has amassed £80 million (say, around $100 million) in the shares of a technology giant such as Amazon. Rather than selling those shares to fund a lavish lifestyle – and thereby triggering a large capital gains tax bill – this individual goes to a major bank and pledges the shares as collateral.

The bank offers a low‑interest loan secured against those assets. Our wealthy shareholder borrows against the portfolio, perhaps tens of millions, to purchase homes, cars and other assets and to sustain a very high standard of living. Because the shares are not sold, no capital gain is realised and no tax is due on the increase in value. The interest payments are relatively small when interest rates are close to zero. On paper, it resembles a kind of “infinite money glitch”.

The strategy is implicitly built on three assumptions:

1. Asset prices will continue to rise or at least remain stable.
2. Interest rates will remain very low.
3. Liquidity – the ability to sell or refinance – will always be available when needed.

For approximately 15 years, these assumptions held reasonably true. As a result, many wealthy individuals became heavily reliant on leverage – borrowed money secured against their assets – to fund their lifestyles.

When the Collateral Collapses

Consider a fictional example: “Tech Bro Tyler”. In 2021, Tyler’s net worth, on paper, is around $50 million, almost all of it locked in the equity of his pre‑IPO technology start‑up. Emboldened by sky‑high valuations and a seemingly endless bull market, Tyler arranges a securities‑backed line of credit – an “SBLOC” – for around $10 million. He uses it to buy an expansive property in Aspen, Colorado and to pay for a lifestyle befitting a paper multi‑millionaire.

The SBLOC agreement appears benign so long as the valuation of Tyler’s company remains high. However, the technology sector suffers a sharp downturn. Private market valuations are cut by 40, 50, even 80 per cent. Tyler’s company is re‑valued from $500 million to $100 million. On the bank’s balance sheet, the collateral securing his loan has collapsed.

The bank issues a margin call: a demand that Tyler immediately reduce his loan balance, for instance by $5 million, to restore the agreed loan‑to‑value ratio. The problem is that Tyler’s wealth is illiquid. His house in Aspen cannot be sold quickly at full value, and his shares in the company are privately held and subject to restrictions on sale. He does not have the cash.

Multiply this scenario across thousands of founders, executives and investors who pledged volatile assets as security for cheap borrowing, and you begin to understand why even individuals who appear extremely wealthy can find themselves cash‑poor very suddenly.

The Liquidity Squeeze

Research from wealth management firms has suggested that the liquidity ratios of high‑net‑worth individuals – the proportion of their wealth held in readily accessible cash or equivalents – have fallen to their lowest levels in years. Many are asset‑rich and cash‑starved. When interest rates were near zero, this was manageable. At 5–7 per cent, the arithmetic is brutal.

If someone is servicing, for example, a $50 million lifestyle loan at 7 per cent, the interest bill alone is $3.5 million per year, after tax. If the underlying assets are not generating sufficient cash income through dividends or distributions, the borrower is relying on yet more appreciation (or more borrowing) to remain solvent. Once markets stall or reverse, the “buy, borrow, die” strategy morphs into “buy, borrow, cry”.

The lesson is simple but often ignored: leverage magnifies not only gains, but also losses. When the cost of money rises and valuations fall, even very wealthy individuals can quickly be forced into distressed sales, dumping prized assets at fire‑sale prices just to satisfy their lenders.

2. Commercial Real Estate: From Dynastic Asset to Wealth Shredder

For generations, commercial property – especially office blocks in major cities – has been regarded as one of the most reliable vehicles for preserving and growing family wealth. Long‑term leases, reputable tenants and predictable cash flows made it a favoured asset class for institutional investors and affluent individuals alike.

The transformation of the office sector since the pandemic has turned that assumption on its head.

How the Model Used to Work

Take “Landlord Larry”, a fictional real estate magnate. In 2019, Larry purchases a prestigious office building in downtown Los Angeles for $200 million. He provides $50 million in equity and borrows the remaining $150 million from a regional bank. With steady occupancy and modest interest costs, the rental income from tenants covers the debt service and provides a respectable return.

Commercial property finance, however, is very different from a typical 25‑ or 30‑year residential mortgage. Loans are often structured with maturities of five to seven years. At the end of the term, the borrower must refinance the outstanding balance based on the then‑current value and income of the property.

Remote Work and Falling Valuations

Fast‑forward to the mid‑2020s. Remote and hybrid working practices have become entrenched. Many companies have reduced their space requirements or relocated. Office vacancy rates have climbed significantly in a number of US and European cities. In Larry’s building, 40 per cent of the space is now empty, and several remaining tenants have negotiated lower rents.

When the time comes to refinance, the bank reassesses the property. Taller vacancy and higher interest rates compress the building’s valuation. Instead of $200 million, the bank now considers it worth closer to $90 million. The outstanding loan, however, is still around $150 million.

The numbers no longer add up. Larry is “underwater” by $60 million. The bank will not refinance the full amount; it demands that Larry inject fresh equity to bring the loan into line with the reduced value. If Larry cannot produce $60 million in cash, his only realistic option may be to surrender the building to the lender. His original $50 million of equity – his true wealth in the transaction – is effectively wiped out.

A Widespread and Systemic Problem

This fictional example mirrors real‑world developments. In several US cities, landmark office towers that changed hands for hundreds of millions of dollars only a few years ago have been resold at fractions of those prices. Syndicates of professionals – doctors, lawyers, entrepreneurs – who invested in apparently safe commercial property funds or partnerships have seen their stakes written down to zero.

With trillions of dollars in commercial real estate debt scheduled to mature in the next few years, this dynamic threatens to remain a formidable destroyer of wealth among the upper tiers of society. Limited partners in property funds are receiving capital calls they cannot meet, forced to inject more money into failing projects or accept total losses.

The harsh reality is that an asset class long viewed as a vehicle for dynastic wealth is behaving more like a shredder of net worth in the current environment. And unlike during the global financial crisis, political sympathy for bailouts of landlords owning half‑empty towers is extremely limited.

3. Lifestyle Inflation and the New Cost of Living at the Top

Much of the public debate around inflation focuses on the Consumer Prices Index – the cost of essentials such as food, fuel and everyday goods. For the genuinely wealthy, these items are largely irrelevant to their financial well‑being. What matters to them is a different, unofficial gauge: the cost of living extremely well.

In recent years, this elite “inflation index” has soared.

The Insurance Shock

Imagine “Montecito Mike”, who has made a fortune in media or technology and retired to a £20 million coastal villa in an area vulnerable to wildfires or hurricanes. For years, insuring such a property was expensive but manageable. Then, following a series of costly natural disasters and updated risk models, major insurers quietly withdraw from entire regions.

Mike receives a letter from his insurer calmly explaining that, due to increased risk exposure, his homeowner’s policy will not be renewed. He contacts his broker in a panic, only to be told that no major carrier is willing to write new policies in his postcode. Effectively, his home has become uninsurable on standard terms.

The implications are severe. Without insurance, mainstream lenders will not finance the property. That reduces the pool of potential buyers to those with sufficient cash and enough appetite for risk to own a multimillion‑pound asset that could be physically wiped out with no compensation. The market value of the property drops sharply, perhaps by 30 per cent or more, simply because the risk profile has changed.

For wealthy individuals whose net worth is heavily concentrated in high‑end coastal or wildfire‑prone properties, this insurance crisis represents a direct, and often sudden, erosion of wealth.

The Servant Economy and Labour Inflation

At the top end of the income distribution, much of day‑to‑day life is outsourced: estate managers, chauffeurs, chefs, nannies and housekeepers. During and after the pandemic, the wages demanded by experienced household staff surged, particularly in cities such as Los Angeles, New York and London.

Positions that once commanded salaries of £70,000–£90,000 per year now routinely require £150,000–£200,000, plus benefits, bonuses and sometimes housing or car allowances. For a family employing a full complement of staff – an estate manager, private chef, nanny and cleaners – the annual cost of maintaining the household can easily rise from a few hundred thousand pounds to well over half a million.

Because these costs are paid from after‑tax income, the gross earnings necessary to fund them may approach or exceed £1 million per year. In other words, before the individual or family has bought a car, taken a holiday or made a pension contribution, they must generate seven‑figure income simply to pay the people managing their homes and children.

The Arms Race in Education

Education is another arena where the costs borne by the affluent have detached from previous norms. Fees at elite preparatory schools and private institutions in major cities now commonly reach $60,000–$70,000 per child per year, with additional expectations for sizeable “voluntary” donations to school foundations, plus travel, tutoring and extracurricular expenses designed to maintain competitiveness in university admissions.

For families with multiple children, annual outlays for schooling and associated activities can readily reach £200,000–£300,000. Add to this the soaring costs of elite universities and international programmes, and it becomes clear why even households earning £1.5–£2 million per year can feel financially stretched.

“High Earning, Not Rich Yet” at the Upper End

This phenomenon is sometimes summarised by the acronym “HENRY” – high earning, not rich yet. But at the elite level, it can become more extreme. Families with substantial incomes and impressive assets can find that their fixed expenditure – staff, property taxes, school fees, insurance, professional services – consumes such a large share of their cash flow that one bad year in markets, one lawsuit or one divorce can destabilise their entire financial structure.

The psychological effect is that people who appear outwardly wealthy can feel, and in some respects be, financially fragile. The treadmill on which they run is set to sprint speed. Stopping, or even slowing down, can be perilous.

4. Angel Investing and the Death of the Everyday Unicorn

In the years of ultra‑low interest rates, many affluent professionals and entrepreneurs became bored with traditional investments. Government bonds yielded little. Broad market index funds seemed pedestrian. Venture capital, start‑ups and private equity promised excitement and the tantalising possibility of backing “the next big thing”.

Turning Savers into Amateur Venture Capitalists

Doctors, lawyers and small business owners began to act like miniature venture capitalists, writing cheques of $50,000 or $100,000 into early‑stage companies. An entire culture developed around this: attending demo days, sharing glossy pitch decks and boasting at dinner parties about being an “angel investor” in a promising new app or technology.

The basic calculus went something like this: invest $1 million across ten start‑ups; if even one becomes a “unicorn” – a company valued at over $1 billion – the initial investment could multiply many times over. The other failures would be an acceptable cost of playing the game.

What this theory often ignored was liquidity and time.

Illiquidity and Down Rounds

Take “Investor Ian” as a representative example. In 2021, flush with paper gains from his core business, Ian allocates $1 million across ten start‑ups. He is told that he should be patient, that exits typically occur seven to ten years after founding. In the meantime, his capital is locked up. Unlike listed shares, these holdings cannot be sold at the tap of an app.

As the funding environment tightens, several of the start‑ups fail outright. A couple are exposed as poorly governed or even fraudulent. Some survive but struggle. To stay afloat, they raise new money at valuations far below previous rounds – so‑called “down rounds”. Existing investors like Ian are heavily diluted. A stake that once appeared to be worth $100,000 on paper may now realistically be worth a fraction of that.

Worse still, the market for exits – initial public offerings and acquisitions – slows sharply as regulators scrutinise deals more intensely and public markets become more sceptical of loss‑making companies with unproven business models. Ian’s remaining investments are described as “zombies”: alive, but not going anywhere fast, and with no clear path to returning cash.

The Transfer from “Smart Money” to “Regular Rich”

One of the more uncomfortable truths of this period is that the most sophisticated investors often exited at or near the peak. Large venture funds and early institutional backers sold stakes in secondary markets in 2020 and 2021, realising enormous profits.

The buyers were frequently “regular rich” individuals – dentists, franchise owners, modest family offices – attracted by the glamour and supposed inevitability of technology‑driven valuations. They purchased shares from insiders eager to de‑risk, not appreciating that they were entering the trade late. When the cycle turned, it was these later entrants who bore the heaviest losses.

Start‑up investing is inherently high risk. Used sparingly and with realistic expectations, it can form a small portion of a diversified portfolio. For many affluent individuals, however, it became an unrecognised form of speculation. They treated it like a high‑yield savings account. In reality, they were holding long‑dated lottery tickets, most of which expired worthless.

5. Divorce: The “Wealth Decimation Event”

Markets and property cycles may be ruthless, but they are, to some extent, impersonal. Divorce, by contrast, is intensely personal and emotionally charged – and for wealthy couples, it often doubles as one of the most efficient mechanisms for destroying net worth.

The Rise of the “Silver Splitter”

Sociologists have noted a trend towards increasing rates of divorce among people over 50, sometimes labelled “grey divorce” or “silver splitting”. Crucially, this is the age group that holds the majority of private wealth in many developed economies. When these couples split, the sums at stake can be enormous.

Consider “Power Couple Peter and Paula”. Peter is a partner in a private equity firm; Paula is a highly regarded consultant surgeon. They have been married for 25 years and together are worth around $40 million. However, much of this wealth is tied up in:

1. Peter’s share of a private equity fund, subject to long lock‑ups and vesting schedules.
2. Paula’s medical practice, which is difficult to value and sell.
3. A portfolio of residential and commercial properties, some of which are mortgaged and possibly affected by the same headwinds described earlier.

Legal Costs and Forced Liquidations

When the marriage breaks down, a complex legal process begins. Top‑tier divorce lawyers in major jurisdictions such as New York and London routinely charge between $1,000 and $1,400 per hour. Cases involving substantial assets can drag on for two or three years, particularly if there is disagreement over valuations, custody, or the division of business interests.

Beyond the lawyers, there are forensic accountants, tax specialists and valuation experts, all of whom must be paid. Total professional fees in a high‑net‑worth divorce frequently run into the low millions before any final settlement is reached.

To implement the eventual division of assets, Peter and Paula may be compelled to sell properties and stakes at unfavourable times. A holiday home in a sluggish luxury market might sit unsold for months, forcing successive price reductions. Shares may have to be liquidated during a downturn, triggering both capital losses and large tax bills. Business interests might be bought out at a discount to intrinsic value simply to facilitate a clean break.

By the end of this process, their theoretical $40 million may have been eroded to a much smaller joint sum, out of which they each receive a portion. It is entirely plausible, after fees, taxes and discounts, that each party walks away with less than £10 million. While this remains a significant fortune by any normal standard, it can represent a dramatic fall in status and lifestyle for people accustomed to flying private and maintaining several large properties.

Ongoing Obligations

The damage does not necessarily stop there. Courts in many jurisdictions consider the standard of living established during the marriage when determining spousal maintenance and, where relevant, child support. If the couple previously spent, say, £80,000–£100,000 per month, the court may seek to preserve some approximation of that lifestyle for the financially dependent spouse.

The income that funded this level of expenditure might, however, have been unusual – linked to a one‑off bonus, a business sale, or the top of a market cycle. When that income falls away, the payor may find themselves under court‑mandated obligations that no longer match their cash flow. Failure to meet those obligations can attract severe sanctions, including, in extreme cases, imprisonment for contempt of court.

In this sense, divorce can function as a brutal wealth‑transfer and destruction mechanism, converting illiquid, long‑term assets into expensive legal disputes and forced sales at precisely the wrong time.

6. The Great Clawback: Tax, Regulation and the End of Secrecy

Even if a wealthy individual successfully navigates leverage, property downturns, lifestyle inflation, risky investments and personal relationships, one formidable counterparty remains: the state.

Governments across the developed world are grappling with high and rising public debt loads. The temptation to increase the tax burden on the wealthy is strong, both for fiscal and political reasons.

The End of Traditional Secrecy

In past decades, individuals seeking to minimise tax could sometimes rely on opaque offshore structures, numbered accounts and favourable banking jurisdictions. Today, international co‑operation on tax reporting has reached a level that makes genuine secrecy extremely difficult to achieve legally.

Under frameworks such as the Common Reporting Standard (CRS), over 100 jurisdictions automatically exchange information about bank accounts and financial assets held by non‑residents. For a British resident with assets in Singapore, or an American with deposits in Switzerland, the assumption must now be that domestic tax authorities are aware of these holdings.

Attempting to conceal assets is no longer a sophisticated planning technique; it is a high‑risk strategy likely to attract severe penalties when discovered.

Wealth Taxes and Taxing Unrealised Gains

In addition to traditional income and capital gains taxation, policymakers in some countries have floated or implemented measures that directly target large fortunes.

One particularly controversial idea is the taxation of unrealised capital gains – that is, levying tax on the increase in value of an asset even if it has not yet been sold. Imagine owning a privately held company currently valued at $1 billion based on recent funding rounds. On paper, your net worth might justify such a valuation, but your actual cash income could be modest.

If a government were to impose, for example, a 2 per cent annual tax on unrealised gains or overall net worth, you might find yourself owing $20 million in tax without having sold any shares. To pay the bill, you would need to sell a portion of your stake, thereby reducing your control over the business and potentially depressing its perceived value.

Even the credible threat of such policies can influence behaviour, prompting wealthy individuals to accelerate sales, relocate or engage in complex restructuring, all of which carry their own costs and risks.

Migration Traps and Exit Taxes

Some individuals have attempted to escape higher tax regimes by relocating to territories with more favourable laws. For example, programmes offering reduced taxation for new residents or special status for investors have attracted attention.

Yet these moves are subject to strict scrutiny. Revenue agencies may examine whether a person genuinely changed their tax residency: did they spend the required number of days in the new country? Did their spouse and children move? Where are their primary home, business operations and social ties? If the authorities determine that the relocation was largely cosmetic, they can retroactively claim taxes, add interest and impose penalties.

At the most extreme, some high‑net‑worth individuals consider renouncing citizenship of high‑tax countries altogether. But here, too, the state has tools. Certain jurisdictions, notably the United States, impose “exit taxes” on citizens who renounce when their net worth or recent tax liabilities exceed specified thresholds. In effect, the individual is deemed to have sold all their assets the day before expatriation and is taxed accordingly.

In this environment, “voting with your feet” is neither simple nor cheap. The combination of enhanced data sharing, wealth‑focused policies and exit barriers means that attempting to run from tax obligations can, paradoxically, result in even greater financial damage.

7. The Desperation Phase: When Fraud Becomes a Temptation

For some affluent individuals, the cumulative pressure of declining asset values, rising costs, legal obligations and mounting tax liabilities leads to a dark inflection point. Rather than accepting a reduced standard of living or openly acknowledging failure, they attempt to bridge the gap through deception.

Status, Identity and Social “Death”

At extreme levels of wealth, money functions as more than a means of exchange. It becomes entwined with identity, social standing and a sense of self‑worth. Membership of exclusive clubs, the ability to sponsor events, to travel in certain ways and to donate to prestige institutions all depend on maintaining a certain level of visible affluence.

When that affluence is threatened, some individuals cannot tolerate the idea of quietly scaling back. Instead of selling the jet, they look for one more loan, one more aggressive investment or, in the worst cases, one more way to falsify the numbers.

Sociological theories of “strain” suggest that when society celebrates certain goals (such as wealth and success) but the legitimate means to achieve them are blocked or withdrawn, some individuals turn to illegitimate methods. In the context of the wealthy, this can mean fraud.

From Investor to Criminal

Take “Hedge Fund Harry”. His fund has been underperforming for several years. Clients are dissatisfied and begin to redeem. Unfortunately, the fund’s assets are illiquid. If too many investors withdraw at once, Harry will be forced to sell holdings at a loss, crystallising underperformance and potentially destroying his business.

Instead of admitting the true returns, Harry begins to misreport. Perhaps he smooths valuations a little, then a lot. He might use the capital from new investors to pay departing ones, giving the illusion of stability and even mild growth. He tells himself that this is temporary, that one good quarter or successful trade will repair the damage and allow him to regularise the books.

But the hoped‑for recovery never materialises. The deception must expand to cover the earlier lies. What began as creative accounting slides into outright fraud. At some point, Harry ceases to be an unlucky manager and becomes a criminal in the eyes of regulators and courts.

This “Ponzi phase” is not confined to hedge funds. It has been observed in property schemes, private lending, start‑up financing and even among apparently staid family offices. The pattern is similar: a refusal to acknowledge losses, followed by falsification, followed by collapse.

Wider Social Consequences

The fallout from such behaviour extends beyond the perpetrators. Employees lose jobs, investors lose savings, suppliers go unpaid. In some tragic cases, the strain culminates in self‑destruction. High‑profile incidents of suicide and even murder‑suicide among financial professionals during market downturns hint at the intense psychological pressure involved.

Substance abuse is another recurring theme. As the stress of maintaining appearances mounts, some individuals turn to alcohol or drugs, compounding their problems and impairing judgement further.

The criminal justice system, too, has been forced to respond. White‑collar crime units are heavily occupied investigating misrepresentations, embezzlements and schemes that thrived in the easy‑money years and unravelled when conditions tightened.

For observers, the key insight is that the final stages of a wealthy person’s financial collapse rarely look tidy. They are often messy, protracted and damaging to many people beyond the original decision‑maker.

8. Lessons from the Rich Recession

Why should any of this matter to those outside the top one per cent? After all, it might be tempting to view the misfortunes of the ultra‑wealthy as a kind of distant theatre – a morality play about excess.

There are, however, at least three reasons to pay attention.

1. The Wealthy as “Canaries in the Coal Mine”

The financial distress of the rich can function as an early warning system for broader economic trouble. Many of the mechanisms described above – rising interest rates, falling property values, fragile start‑ups, aggressive tax collection – do not stop at the doors of penthouses and mansions. They filter down through the wider economy.

When wealthy households cut discretionary spending, luxury retailers, private tutors, high‑end restaurants and service providers feel the pinch. When landlords default on commercial mortgages, the impact can ricochet through regional banks and local economies. When angel investors become more cautious or lose capital, fewer start‑ups receive funding, leading to fewer innovations and jobs.

In short, the rich recession has a tendency to trickle down.

2. The Mirage of Visible Wealth

A second lesson concerns perception versus reality. Much of modern consumer culture encourages people to aspire to the visible trappings of wealth: large houses in prestigious postcodes, expensive cars, designer wardrobes, elite schooling for children, extravagant holidays.

Yet, as we have seen, many of the people occupying that lifestyle are doing so on a foundation of debt and leverage. Their “wealth” resides in volatile, illiquid assets and optimistic valuations, while their monthly obligations are immense. A change in interest rates, tax policy or market sentiment can rapidly destabilise this structure.

For those outside this world, the risk is that they attempt to mimic the outward appearance – high expenditure, conspicuous consumption – without possessing the underlying assets or cash flow. In doing so, they may be borrowing towards a mirage, taking on obligations that could prove ruinous in a downturn.

3. Redefining Real Wealth

Perhaps the most important insight to draw from the struggles of the ultra‑wealthy is a redefinition of what genuine financial security looks like.

Real wealth is not the ability to borrow ever larger sums against appreciating assets in order to fund ever more lavish consumption. It is the capacity to withstand shocks without catastrophic loss of home, dignity or mental health.

In practical terms, this suggests a few unglamorous principles:

• Liquidity matters: Holding sufficient cash or near‑cash reserves to cover expenses and unexpected events reduces reliance on distress borrowing or forced asset sales.
• Low leverage provides resilience: Debt can be a useful tool, but over‑reliance on borrowed money exposes even large fortunes to rapid erosion when conditions change.
• Living below one’s means is underrated: Maintaining a lifestyle comfortably supported by current, not hypothetical, income is a safeguard against market volatility, career disruption and personal crises.
• Diversification and realism beat speculation and hope: Chasing “the next unicorn” with funds one cannot afford to lose is a dangerous form of wishful thinking, even for those with seven‑figure portfolios.

These are not new ideas. Many older generations instinctively understood them. The current travails of the one per cent suggest that some of their descendants – and those trying to emulate them – have forgotten.

Conclusion: Staying Solvent in an Age of Spectacle

The spectacle of ultra‑wealthy individuals going broke at record rates might be dramatic, but it is not mysterious. It is the predictable outcome of combining high leverage, concentrated bets, illiquid assets, escalating lifestyle costs, complex personal lives and increasingly assertive tax authorities – all within a macroeconomic environment where money is no longer cheap and growth is no longer guaranteed.

For those looking on, the temptation to measure success by visible status symbols remains strong. Yet the stories behind many glossy façades are far less secure than they appear. In too many cases, the penthouse lifestyle is balanced precariously on a tower of obligations that can topple in a strong wind.

True financial strength lies in a quieter, less ostentatious direction: in solvency, liquidity, modest leverage, simple structures and the ability to sleep soundly regardless of short‑term market swings. In an era when even billionaires can be reduced to scrambling for cash, the old‑fashioned virtues of prudence, thrift and patience look more modern than ever.

The warning from the collapse of the one per cent is clear. The only fate worse than being poor is being previously rich – and over‑extended. Avoiding that fate does not require extraordinary intelligence or access to exotic investment opportunities. It requires discipline, humility and a willingness to live slightly beneath one’s means, even when – perhaps especially when – one could afford to do otherwise.