Interesting article in AFR by a CPA: The top 6 reasons rich people lose their money, as told by a veteran accountant Some edited (by me) sections of the article They watch their pennies, but blow their dollars Many millionaires are frugal. By frugal, I mean they penny pinch dry cleaner costs, bank fees, credit card fees, landscaper costs, grooming expenses such as haircuts and manicures, professional service fees such as CPAs, attorneys, and doctor and dentist charges. They will fight like a Tasmanian devil if they think they were overcharged for a grocery item or a restaurant charge. And then these same penny pinchers will go out and buy a boat, Tesla, a diamond ring, or take an absurdly expensive vacation. They get too emotional about their investments But I've seen some wealthy individuals who invest aggressively and continue to do so until the economy turns south. Then they panic and begin unloading their investments. These so-called "aggressive investors" are actually conservative investors in disguise. They are sheep in wolf's clothing. And their wolf disguise comes flying off the moment they start losing money. They fail to realise the devil is in the details Most wealthy individuals become wealthy in one of four ways: They live below their means (save more than they spend) They expand their means (grow their income) They do both (save and grow income) They inherit their money Some of the individuals who fall into the expand-their-means or inherit-their-money categories have something in common: They often do not pay attention to the devil in the details. What I mean is that they don't review their monthly bank transactions, monthly bills, or monthly credit card statements in order to make sure there are no unauthorised transactions or fees. They also don't review transactions such as hotel bills, retail purchases, or restaurant tabs to make sure they were not overcharged and paid the correct amount. They also don't review their expenses at least once a year to see if they can reduce those expenses for the following year. They keep all of their eggs in one basket But some rich people make the mistake of tying the bulk of their assets up in one place, such as their own business or in real estate — two very illiquid investments. For these wealthy individuals, when something goes wrong, they are forced to sell some of their investments at a discount or increase their debt by securing a loan or tapping their credit line. They don't plan for the future in a realistic way Another common money misstep is lack of proper planning. The three big missteps in this category include: Lack of adequate retirement planning Lack of adequate estate planning Not having an updated will They're generous to a fault When you don't have to work very hard for your wealth, you simply do not value that money as much as you otherwise would, and there is a tendency to give too much of it away to family, friends, or charities. Once people find out you're rich, they hit you up for money. It can come from every direction and overwhelm you.