I know that a lot of you are sick of hearing about the Madoff scandal. I certainly am. I just wish they’d resolve his case already and make him pay his countless dues and debts to his riches-to-rags, hapless victims. But I can’t help but revisit the whole story after I stumbled upon concrete details of how Madoff lived.
Madoff’s Outrageous AmEx Credit Card Bill
While many of us are struggling to pay off credit card debt, others are enjoying unlimited use of their credit cards. ABC News reports just how hard Bernard Madoff, his family and cronies decided to live things up with funds from their investors. The evidence is preserved in a credit card bill from a company business platinum card which Ruth Madoff, Bernie’s wife, decided to use at her discretion.
How This Amex Credit Card Bill Came To Be
How about I try to explain where this credit card bill came from.
I think this whole story emphasizes a few interesting things about people and their behavior towards money. When you feel like you’re using someone else’s money, or imagine money growing on trees, you begin to experience an overconfidence and in some cases, even a delusional sense of invincibility that makes you feel that
(a) you may be above the law
(b) you should be entitled to anything and everything
(c) your appetite for consumption deserves to grow in line with your bank accounts.
Check out her January 2008 bill from American Express:
I experienced this strange effect of financial overconfidence first hand, albeit in a transitory and much smaller scale during the dot com boom. That was when we experienced a glut in IPOs and witnessed the emergence of well funded companies like the Silicon Valley startups I had once been part of. Deserving or not, many people were beneficiaries of this wild economic boom; its effects extended beyond the material as this dot com bubble had a hand in strongly altering the attitude and behavior of those who lived in the thick of it.
For many (except perhaps for the most serious tightwads among us), our relationship with money and our financial psychology shifts once we feel that there is easy and fast money to be had and used. For those swimming in dough, it becomes extremely likely that you’ll readjust your living conditions accordingly, if not now, then eventually. So a credit card bill of 6 figures in a month? That won’t be so shocking in such circumstances, when people become accustomed to the good life.
This of course doesn’t change the fact that this matter is ridiculous on so many levels. Granted, this credit card bill came to light before the massive financial crisis and recession hit; but it still remains as one that was going to be paid using other people’s money (through illegal means).
So here’s a question: do you think that if you ever found yourself living high on the hog, that you’d ever change your lifestyle so much so that you’d find yourself on the other end of a credit card bill like we just showcased here? While it’s something we may not feel compelled to justify or even admit to a public audience, it’s something we may want to be honest with ourselves about.
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