Halsey Minor, who co-founded CNET, has filed for Chapter 7 bankruptcy. Minor was a mega-millionaire who once was pegged by Fortune magazine, back in 1999, as having a net worth of $350 million. Now his net worth could be negative $90 million, according to a Wall Street Journal blog post. He even owes money to his former executive assistant.
CNET was sold to CBS in 2008 for $1.8 Billion, although Minor had left years earlier before the DotCom bust of 2000. Minor, who is a relative of Admiral Halsey, also was a tech investor who picked some winners. One was acquired by Google and became Google Voice. Minor was also an investor in Salesforce.com.
CNET, Salesforce, Google Voice — clearly the man is a tech genius who knows how to identify tech’s next big thing. He made a fortune by the time he was in his thirties. So what went wrong?
Minor’s financial troubles seem to stem from expenditures and investments that later proved disastrous.
He bought expensive real estate. Case in point: a house in posh Bel Air that he bought for $20 million and put back on the market a year later for $12.9 million.
Then there was the house in Presidio Heights, San Francisco, that he bought for another $22 million — and claims to have put in another $15 million in improvements. There was other real estate, too, including the Landmark Hotel, Charlottesville, Virginia, that he was developing for $31 million — among other properties.
Let’s not forget the race horse. He paid $3 million for a Kentucky Derby contender that went lame before the big race.
And then there was the expensive artwork. He bought millions of dollars of artwork at Sotheby’s auction house, and then was sued for not paying for it. One of the paintings in question was Peaceable Kingdom (pictured above), by artist Edward Hicks. Minor ended up in litigation, lost and paid $6.6. million to Sotheby’s.
And now he’s bankrupt.
I don’t write about Minor to gloat about someone else’s misfortune. On the contrary, “there but for the grace of God go I” is more of my sentiment in such situations.
But it does suggest two points for entrepreneurs to take away from this saga of “tech millionaire goes bankrupt:”
- You can be a genius in one area and be a huge success — but get out of your element and it could be a completely different story. When it comes to diversifying, walk carefully. On the one hand, diversifying can reduce risks inherent in over-relying on a single area. But get too far afield from what you know best in your business, and it increases different kinds of risks.
- Financial independence is not so much about how much you make — it’s about how you spend it. Even multimillionaires can spend it all foolishly. Cost control in business, in government and in your personal finances is important. Don’t be the one who goes bankrupt.
Image: Peaceable Kingdom
Thanks alot for this post. Its goes a long way in showing how certain wrong decisions could be the downfall of an entrepreneur. And also for entrepreneurs to be careful in making certain decisions that may affect them economically.
Thanks for sharing this post. It has a great moral lesson to it. I am “poor” capitalist at the moment, but I will be able to handle when I am becoming richer, due to the fact that I have learned from my past business mistakes (see my post, Five Lessons Learned from my Start-up — And why I’d Do it Again, on Open Forum) and I have a sound approach to money and I can defend it in rational way. I am writing on topic on my new blog, Objective Argentum.
Yet another sad story of how successful entrepreneurs go bankrupt due to lackluster personal financial management.
I’ve got this great advice from my dad: “You know son, many people went bankrupt after they make more money than before; why? It’s because they also make more expenses – unnecessary ones. Therefore you need to manage your personal finance well, setting aside a good percentage of your income for rainy days, for your kids’ future and for your investment – then support your daily life with the rest.”
And no, he didn’t read Robert Kiyosaki’s book.
I was fortunate to have the advice and it has kept me grounded.
Ivan: I want to talk about this topic with you in more detail and show you a video by Robert Kiyosaki! 🙂
Let’s talk about this, Martin 🙂
I personally read most if not all Robert’s book – life changing, really.
Ivan: We will do that! Please send me an email with days and time when it is convient for you to have chat. I look forward to talk about Rober “Rich Dad – Poor Dad” Kiyosaki, diversifying your assets and how to achieve financial independence in the long run.
Hi Ivan, It’s sad indeed. Now your dad, he sounds like a wise man. 🙂
Many thanks for the praise 🙂
Spending more than you have is the quickest way to go into debt. What entrepreneurs and business owners need to remember is that cash can flow out of a company much quicker than it comes in. You need to continually track your income and your expenditures to make sure that you have enough cash in the bank to cover your costs.
The way to wealth is to spend less that you earn. It is pointless to earn millions, but spend all of it, if not more, resulting in a negative net worth on the whole.
Personally, I keep an Excel file with formula to keep track of all my expenditure and income.