33 Weirdest Ways People Actually Went Completely Broke

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Going broke is everyone’s worst nightmare, and it often happens in ways you’d never expect.

Participating in Illegal Dog Fighting


NFL player Michael Vick experienced severe financial and legal consequences due to his involvement in an illegal dogfighting ring. 

Despite his bankruptcy and the debts incurred, he managed to recover financially by adhering to a strict budget post-prison, demonstrating the tough road to financial recovery after engaging in illegal activities.

Dating Someone Online 


Engaging with online dating platforms can sometimes lead to costly mistakes, especially with prevalent scammers targeting lonely hearts. For instance, one Illinois man lost $200,000 to a scammer pretending to be his girlfriend, who concocted stories of illness and kidnapping to take his wealth. 

The lesson here is straightforward: never send money or personal details to someone you’ve only met online, as it opens the door to potential fraud and identity theft.

Getting an Inheritance


Receiving a large inheritance can quickly turn into financial chaos for those who choose luxury over prudence. According to Elle Kaplan, CEO of LexION Capital, it’s not uncommon for new heirs to indulge in extravagant purchases like yachts and mansions, far beyond their means. 

The emotional high of sudden wealth can cloud judgment, making it easy to forget about wise investments or savings plans. This can swiftly deplete even a sizeable inheritance, leaving nothing but regrets.

Dodging Taxes on Drug Money


It might sound odd, but even illegal earnings, like those from drug trafficking, are subject to taxes. If you’re pocketing money from such activities, keeping it hidden from the IRS is a risky game. 

So, yes, neglecting to declare these earnings is considered a separate offense, leading you to potentially go broke. Failure to comply results in severe financial consequences, including penalties, interest, and fees that could bankrupt you!

Overspending on Pets


Pets can become surprisingly expensive family members.

Actor Nicolas Cage, for instance, experienced severe financial distress after spending lavishly on exotic pets, including a rare octopus and king cobra snakes, which contributed to his overall financial downfall amid the housing market crash and recession. 

Enduring Financial Strain from Divorce


Divorce can deeply impact finances, often leaving both parties with less income and higher expenses due to separate living arrangements. 

Reality TV star Brandi Glanville shared in a 2012 New York Post interview how her divorce from Eddie Cibrian left her financially strained, with minimal assets and no credit. 

Incurring Costs from Pet Incidents


Homeowners can face significant financial setbacks from incidents like dog bites, which averaged a cost of $37,051 in claims in 2017, according to the Insurance Information Institute. 

Those without sufficient insurance coverage can find themselves responsible for large out-of-pocket expenses. So,  even if your dog is generally ‘friendly,’ it’s wise to be cautious and ensure they’re under control to safeguard your finances against ugly incidents.

Choosing the Wrong Business Partner


Selecting a poor business partner is a fast track to bankruptcy. As noted by Catherine Cooper of Catherine Cooper Qualitative Research, one dishonest partner can incur massive debts and deplete business funds, leaving the other partner in financial ruin. 

Awareness and vigilance are key to preventing such disasters.

Delegating Complete Financial Control


Relying solely on an accountant for financial oversight can lead to a disastrous situation. A workshop participant who earned a $35 million contract found himself receiving $46,000 monthly without knowing his actual bank balance. 

This lack of personal engagement with his finances set the stage for potential insolvency, reminding everyone of the importance of staying informed and involved in financial management.

Committing Financial Infidelity


In any marriage, being open about finances is key for both relationship harmony and financial health. Sharing details about income, debts, and spending habits can prevent misunderstandings and foster mutual trust. 

A case highlighted by Navicore Solutions involved a woman who accrued $45,000 in credit card debt without her unemployed husband’s knowledge. This form of financial infidelity strains relationships and also leads to severe economic consequences, often culminating in insurmountable debt.

Overspending on Cosmetic Surgery


Heidi Montag’s excessive investment in plastic surgery serves as a stark warning about living beyond one’s means. Known for her role on MTV, Montag had undergone significant cosmetic enhancements by the age of 21, including a nose job, collagen lip injections, and breast implants. 

Her obsession with emulating celebrities like Angelina Jolie led to frequent consultations with her surgeon, as she admitted to People magazine to being absolutely beyond obsessed. While these decisions shaped her public persona, they also heavily impacted her finances.

Gambling on Penny Stocks


Investing in penny stocks is fraught with risks similar to gambling. 

Despite some success stories, such as Timothy Sykes, many investors find themselves facing total losses. The U.S. Securities and Exchange Commission warns that such investments often result in financial ruin, especially for those who cannot afford to lose their invested capital.

Consulting Psychics for Financial Advice


Emotional vulnerability can sometimes lead to poor financial decisions, such as spending excessively on psychic services. 

Niall Rice spent over $718,000 hoping to reunite with his ex-girlfriend through psychic interventions—a decision that left him financially depleted and still without the desired outcome.

Ignoring Sound Financial Advice


Failing to heed professional financial advice can lead to significant losses. 

A client of Janis, Randall Janis, founder and owner of Clear Income Strategies Group, despite having over a million dollars, chose to manage his finances independently, resulting in a substantial decrease in his wealth. 

Playing Banker with Personal Funds

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Edwin Cruz of Prosperity Financial and Insurance warns against turning personal funds into personal lending ventures. 

He recounts the story of a couple who went broke within five years after trying to fund various family members’ business ideas with their settlement money. This highlights the risk of informal lending and the importance of investing wisely.

Losing Lucrative Endorsements


Athletes and celebrities often rely on endorsements as significant income sources. However, changes in popularity or career status can abruptly end these deals, as noted by financial analysts. 

Those unprepared for such losses are at risk of depleting their wealth quickly.

Betting on Fame


Lady Gaga’s gamble on her Monster Ball tour is a prime example of risking it all for potential success. With only $3 million in hand, she invested everything in the tour’s production, aiming to catch the eye of Live Nation’s Arthur Fogel. 

This bold move initially left her financially drained, although it eventually paid off when Live Nation advanced her $40 million, dramatically changing her and her family’s financial status.

Participating in Pyramid Schemes


Pyramid schemes, often dressed up as legitimate business opportunities, are notorious for siphoning money from participants. 

The FTC flagged Fortune Hi-Tech Marketing as such a scheme after it misled over 350,000 people, with more than 98% of participants losing money. These schemes can be particularly devastating, wiping out personal savings and leading to significant financial loss.

Gambling Beyond Limits

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For some, what starts as casual gambling can spiral into a destructive addiction. The National Council on Problem Gambling estimates the social costs of gambling issues—such as bankruptcy, job loss, and divorce—at around $6.7 billion annually. 

Gamblers can end up draining their savings and jeopardizing their financial futures, often continuing even as their financial security crumbles.

Diving into Unfamiliar Business Ventures

Bored office worker, annoyed businessman at workplace
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Dubbed ‘Entrepreneur Syndrome’ by Michelle Singletary of The Washington Post, this phenomenon involves diving into business ventures without adequate knowledge or need. 

NFL player Warren Sapp’s bankruptcy filing, with liabilities slightly surpassing his assets due to failed business ventures, serves as a cautionary tale against overextending in unfamiliar entrepreneurial waters.

Going to Prison

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Going to jail can exacerbate financial struggles as ongoing debts like home and car loans continue to accrue. 

Randy Tarpey, CPA, suggests making a financial plan or even filing for bankruptcy before incarceration to mitigate the financial damage and provide a fresh start upon release, preventing a prolonged ‘financial jail’ term.

Overinvesting in Education

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The ongoing debate between the Supreme Court and the Biden administration highlights the high costs of higher education. Take, for instance, the story from Forbes about a graduate from the University of Southern California’s film school. After earning her master’s degree, she faced limited job prospects and salaries too low to cover her hefty student loans, not to mention supporting a child. 

Her solution? She pursued a law degree, hoping for better prospects. However, after accumulating over $300,000 in debt and facing a starting salary of just $20,000 as a lawyer—a figure that might only rise to $50,000 with experience—she found the financial burden so overwhelming. 

Mismanaging Lottery Winnings


Winning the lottery might seem like a dream come true, but it can also lead to a financial nightmare. Statistic Brain research reveals that 44% of lottery winners burn through their fortunes within five years. 

Elle Kaplan comments on the irony of lottery winners being worse off than if they had never won at all, pointing out the pitfalls of poor money management and the temptation to overspend without considering the future.

Overindulging as a Single Parent


Single parents sometimes face financial ruin by overextending themselves to provide extraordinary experiences for their children. 

Instances like financing trips to Disneyland or luxurious hotel stays for special occasions can lead to overwhelming debt, driven by a desire to compensate for their own deprived upbringings.

Developing Costly Addictions

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Cocaine addiction is an expensive and destructive habit. 

The Pat Moore Foundation points out that maintaining a cocaine habit can cost up to $91,250 annually, quickly draining resources and leading to financial ruin.

Co-signing Loans


Co-signing can lead to unforeseen financial disasters, especially when the primary borrower defaults. Michael Eckstein shared a story of a young woman who faced ruined credit and financial burden after her aunt defaulted on a co-signed loan. 

Consider this your reminder not to co-sign loans, which might seem helpful but can result in significant financial liability.

Maintaining an Expensive Entourage

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In the movie Vegas Vacation, Rusty Griswold learns the hard way that keeping a large entourage can drain your funds quickly. This scenario echoes the real-life story of MC Hammer, who, despite earning over $33 million, went bankrupt due to the high costs of supporting around 200 people. 

His well-meaning intent to help friends and family escape street violence ultimately backfired, proving that generosity needs limits if you want to avoid financial downfall.

Falling for Forged Credit Scams


Discovering that a loved one has taken out credit in your name can be devastating. Victims often don’t realize the fraud until debt collectors come calling. 

This situation can lead to severe financial distress, including judgments and bankruptcy, particularly if the victim decides against legal action to protect family relationships.

Suffering from Failed Restaurant Ventures

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The high failure rate of new restaurants—60% in the first year and 80% by the fifth year, as reported by CNBC—often leads to significant financial losses. 

Investing in a restaurant can end with losing the initial investment and owning an empty property that’s hard to sell, compounding the financial loss.

Losing Money on Independent Film Investments


Investing in independent films can be risky, with high chances of financial loss. 

Many investors are drawn by the passion for filmmaking but fail to consider viable profitability channels, leading to total investment losses.

Falling Victim to Inheritance Scams


Inheritance scams can deplete savings quickly, as seen in cases where victims, driven by a mix of altruism and greed, send money to scammers under the guise of covering various fees for a large inheritance. Unfortunately, these scams can leave individuals financially devastated without any recourse.

Overspending to Maintain a Reality Show Image


Spencer Pratt from The Hills exemplifies how maintaining a facade for reality TV can lead to real financial issues. 

His confession about living a fake, extravagant lifestyle for the show ultimately resulted in him going broke and moving back in with his parents to save on expenses.

Failing in Alternative Housing Projects


Investing in unconventional housing projects like straw bale homes can lead to unexpected regulatory and financial challenges. 

William Seavey’s failed project in Washington serves as a stark reminder of the risks associated with non-traditional real estate investments, leading to both financial loss and the lack of a physical business location.

Kate Smith, a self-proclaimed word nerd who relishes the power of language to inform, entertain, and inspire. Kate's passion for sharing knowledge and sparking meaningful conversations fuels her every word.