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But that behavior can quickly leave them in the poor house.
Below are some major expenses that make the wealthy poor.
Ive observed that private jets are often the Achilles heel of wealthy individuals financial plans, according to Shahnazari.
To illustrate this point, Shahnazari shared a specific example from his experience.
I once worked with a client who purchased a Gulfstream G650 for $65 million.
He viewed it as a status symbol and a convenience for his frequent business travels.
He noted that the largest and most opulent models can cost upwards of $300 million.
A $300 million yacht might require $30 million annually to maintain and staff, Shahnazari said.
He recalled a client who bought a 300-foot custom yacht for $150 million.
He was thrilled with his purchase and envisioned luxurious vacations andimpressive business entertainment opportunities, Shahnazari said.
What he didnt anticipate was the annual operating budget of $15 million.
The yachts expenses quickly began to outpace his investment returns, Shahnazari explained.
He had to choose between selling other assets to keep the yacht or letting go of his prized possession.
Excessive Real Estate Purchases
Shahnazari has also seen fortunes dwindle due to excessive real estate purchases.
Each property has ongoing expenses: property taxes, maintenance, staff, utilities, and security.
One client I advised owned homes in New York, London, Miami, and Aspen, Shahnazari said.
Each property was worth over $10 million and sat empty for most of the year.
The world of high-net-worth individuals is rife with financial pitfalls that can transform substantial fortunes into cautionary tales.
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