How did you lose your wealth?

My uncle (the brother of my father) never got married. He was born in 1950 and always lived the good life: he never had kids, not one Euro of debt, drove fast German cars, had amazing girlfriends (women literally adore him), made exotic travels, had tailor-made suits, knew literally most of the Bel Paese best restaurants in big and small cities alike, etc.

He started working in the Italian branch of a British company (at the time based in Naples) at 21 as a clerk and became a top manager in his late 40s. He was suddenly fired in the late 90s because of a restructuring and since he was already in his late 40s it was impossible for him to find a similar job at a competitor. Actually he could not find any job at all. Once out of the job market for a few years he basically gave up on looking for even a low-level job.

Nevertheless, he had saved enough money to make a (very good) living without any job: in particular his wealth consisted of 4 flats in the city center where he was living. Normally, he would sell one flat and make a living for the next 10 years. He calculated that his flats would allow him plenty of money for the rest of his life.

In 2004 he was driving on the highway late at night when a truck driver crashed on his sporty car (police ascertained that it was not my uncle’s fault).

The accident was very serious: my uncle was taken to hospital in critical conditions, had a few surgeries and eventually had a heart valve replaced during a very risky operation.

When he was still at the hospital, the insurance very ably tricked him into quickly signing an amicable settlement for 70k Euro: this seemed a lot of money right after the accident but soon revealed to be “peanuts” given the kind of injuries he suffered and the expenses he would have subsequently incurred in order to fully recover.

He got the insurance money immediately.

The surgery, rehabilitation and other expenses of the next 5 years basically cost him one of his flats (i.e. instead of lasting him 10 years, it lasted only 4-5).

Most importantly, after his heart was fixed he was not allowed to drive a car for some time and was very lonely (old friends disappeared quickly), slipped into depression and his lifestyle changed: he was buying a myriad of useless stuff like (admittedly majestic) Iranian carpets and expensive furniture, he was traveling continuously to some exotic locations with some new fake friends, had a few high-maintenance girlfriends scattered across Europe, etc.

The money from the second flat he sold lasted him only 4 years.

After he sold that second flat, he remained with only 2 more flats (and he was living in one of them).

He finished the money of his third flat in 3 years. He gradually started selling, one by one, all the useless stuff he bought (often times for very little money).

He then went into “panic mode” since he had no money, no other income and only his flat where he was living.

Also, because of the recent economic downturn in Italy and lack of expensive refurbishment works, his last flat was rapidly decaying and had dropped in value almost 40% in just a few years: to sell it would have been a disastrous decision.

At that point he was basically broke as he had one asset — the last flat — but had literally no cash.

He sold his last “substantial” asset (a Toyota Yaris he bought used just a year earlier) for 3k euro.

With this money he managed to live 3 more months when he received a letter confirming that the State will finally start issuing a pension.

This was summer last year: since September last year he is a happy – albeit very frugal – pensioner.

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