One Million Dollars Down The Drain

by Silicon Valley Blogger on 2009-06-1024

A million dollars is a lot of money that’s certainly not easy to accumulate. But is it so easy to lose? There are a couple of stories I’d like to present regarding the foolish loss of a million dollars.

Story #1: Money In The Mattress
Why shouldn’t we hide our cash at home? Well, our first story warns us of why money kept in or under our mattress can be problematic. This particular tale would break your heart if it did happen to you (though there’s question of its veracity). In Tel Aviv, there was this unfortunate woman who lost her mattress. She had been sleeping on the same old, ratty bed for decades, and her daughter felt she would do her mother a favor by trading it in for something nice and new. What her daughter didn’t realize was that the old mattress housed her mother’s life’s savings. Cash padded its interior which amounted to a million dollars. There are apparently still people out there who literally keep their money in their mattress (note: there are much better places to keep your money safe). Although I scratch my head wondering a few things:

  • How do you know when you’ve got a million dollars stuffed in your mattress? It seems hard to account for that much money.
  • Can a mattress truly house all those bills?
  • Was the exchange rate taken into consideration? $1 million is equivalent to 3.928 million new Israeli shekels. Or do people store their life’s savings in dollars? Maybe.
  • When the daughter tossed the bed by the curb, didn’t she notice just how heavy it was? Lugging down a million dollars to the garbage heap just sounds like it would be so…. heavy.

To gain some idea about what exactly was thrown in the dump, let’s visualize a million dollars here:

personal property insurance
Image from the Huffington Post.

Could you really drag a mattress with this much dough in it anywhere? Is this truth or myth? Whether or not this is an urban legend, it serves us with lessons about what not to do with a significant amount of money.

Story #2: The Bankrupt Game Show Winner
This story is about a bankrupt millionaire. Apparently, it’s possible to win a million dollars and still file for bankruptcy in 2 months!

Let’s start with how one woman got lucky. Winning a game show is one way to make a million. But check out the story of this “millionaire”, which I can only describe as a tale of riches to rags, or maybe of rags to riches to rags.

This woman, no other than a State School Superintendent, won a million dollars on the game show “Are You Smarter Than A Fifth Grader”? She snagged the grand prize and pledged to donate it to various schools. But 2 months after her win, her husband’s home building company failed, forcing her family to file for bankruptcy.

Goes to show you just how tenuous our financial situation can be at any point in time. For many people, it only takes a layoff, one bad business cycle, one bad trade in the stock market or one major illness to wipe out the family’s fortunes. I covered a lot of these eventualities when I wrote about the only 3 reasons why people go bankrupt.

millionaire, winner, bankruptcy
School superintendent wins, then loses $1,000,000.

The game show winner is still honoring her promise to gift her winnings to schools, with the funds sheltered in a “gift foundation” that is supposed to be protected from her creditors. Hopefully, her donation stays intact and untouched throughout bankruptcy proceedings.

How can we become millionaires? How about trying to hold on to the money we’ve earned?

Copyright © 2009 The Digerati Life. All Rights Reserved.

{ 24 comments… read them below or add one }

Peter November 26, 2008 at 10:10 am

It’s funny, no matter how much money you have, it always seems to just drain right through your fingers like water. Income goes up – so does the spending!

Vincent Scordo November 26, 2008 at 10:12 am

Goes to show that managing money is not about money, but rather lifestyle and priorities. So, even with a bonus of $1MM the superintendent above (and her family) could not control money problems.

Best,
Vince

Paul November 27, 2008 at 5:29 am

That’s really interesting.

Even if the superintendent had kept the money, it seems that she would still end up bankrupt?

hmmm.. thanks for the post.

Foobarista November 27, 2008 at 5:45 am

On the bankruptcy story: I suspect this is a “chain bankruptcy” of the sort that often happens in the building business.

My guess is that he did work for various bigger developers who themselves have gone bankrupt due to not selling houses and/or not being able to roll over debt, so he didn’t get paid. But doubtless he’ll be back building once the economy improves.

Austin Real Estate Broker November 27, 2008 at 6:14 am

Shoot. I feel bad for that lady who won the game show. Can you imaging the swing from having a million dollar win and then feeling that the world turn against you? Man. I don’t envy her. It’s one thing to always have been broke, but to be built up and then destroyed is likely much worse psychologically. My thoughts go out to everyone struggling now. I know how tough it is, but with luck, everything will pick back up and start recovering in the spring. Hang in there.

Joe

Moneymonk November 28, 2008 at 10:18 am

If you’re 3.5 million in debt, 1 million that you win wouldn’t have done any good!

jim December 1, 2008 at 6:43 am

Story #2 — that’s kind of sad… but at least she’s honoring her promise.

Escape Somewhere December 7, 2008 at 4:19 am

I think builders can go bankrupt pretty quickly. Compared to other investments you really have to put a lot of money on the line and if the market turns it can wipe out years of profits in a few months. For a small developer each month can eat up 100k and if nothing is selling its very hard to stay afloat.

Eric June 11, 2009 at 1:52 am

The mattress story sounds unbelievable to me. Seems like it was exaggerated as an oversensationalized story.

Manshu June 11, 2009 at 6:48 am

It’s really sad, and to think that there are several other people who bought bonds of huge car companies and now their savings are all gone. This would be equally bad. When the bad times hit, no one is spared.

Silicon Valley Blogger June 11, 2009 at 7:06 am

Eric,
It sounds like it would be impossible, I agree. I can’t believe it made CNN news. Who knows what really happened? Makes for an interesting cautionary tale (fable?) though.

Todd @ The Personal Finance Playbook June 11, 2009 at 7:29 am

I, too, find that story very hard to believe. Like you said, who knows?

Annuity Quotes Guru June 11, 2009 at 1:59 pm

Yes, this story reeks of internet fodder. The weight alone would let you know you were throwing out something more than a mattress.

Frank Curmudgeon June 11, 2009 at 3:16 pm

This is certainly a too-cute-to-be-true story, but a mattress could easily have $1M in Benjamins in it without somebody noticing the weight. US Currency is 6 x 2.5 inches, so a single sheet of 8.5 x 11 paper is the equivilent of 6.233 bils, meaning that 10,000 of them are about 1600 sheets of paper, a little more than three reams. You could sneak that into a queen sized mattress and nobody carrying it would notice.

And look at the photo more carefully. Those bundles are each $5000, i.e. they hold 50 bills. There should only be 200 of them. Count the layers. It should be pretty obvious that the center of the pile is hollow.

Truth is, as anybody who has amassed a million will tell you, it’s just not that much money.

Harris June 12, 2009 at 12:00 am

Though it sounds too much, exaggerated as some have said, i just simply pull out the red line of the story that one should not put all things in one basket. or simply saying ‘don’t put all eggs into one basket.’

in business, investment is a matter of prudent. all business people will say ‘business diversification’ which simply means not to have only one income streams, but a long list of ways to invest money.

mattress June 15, 2009 at 6:53 am

So sad, if true.

That’s a big IF however, as you’ve pointed out some serious holes in the story.

I’ll stick with putting my money in the bank……..

Alex June 15, 2009 at 5:14 pm

I’m with Frank on this one. I think the real illusion to be uncovered here is just how much space a million dollars takes up. If you look closely at the image, you’ll notice that you can see the top of a black shelf just behind the first stack of bills. Also take into account that they are stacked in a way that maximizes the volume of the pile. I think Hollywood’s been tricking me.

Perhaps the money was why the mattress seemed so “ratty”. The daughter thought the stuffing was falling apart or something.

kosmo @ The Casual Observer June 18, 2009 at 9:22 am

I’m with Frank – it’s definitely possible, from a technical sense. As I heft the ream of paper on my desk … yeah, you could easily sneak the weight of three reams into a queen sized mattress. Queen mattresses are kind of heavy.

Ann June 29, 2009 at 8:38 am

It’s really hard to believe. But if that is true??? My heart would surely break. :-(

nick July 10, 2009 at 1:36 pm

One million U.S Dollars weighed in at 1100 pounds. Goes to show that the story is full of shit. I think they would have figured it out when they needed a forklift for a mattress.

Silicon Valley Blogger July 10, 2009 at 1:51 pm

Some of it was local currency, I wonder how much of that would make a difference in poundage. Yes, sounds fishy. Maybe the story tellers wanted the attention through this type of sensationalism. For the life of me, I can’t believe it would be make the “news” at all. And here I am propagating it, of course. Perhaps we should just segue into a discussion about the forlorn state of our “news” channels, shall we?

Andrew September 6, 2009 at 12:35 pm

I really feel sorry for that woman, no matter whether this very story is truth or fake, anyway, it’s not the problem of just single citizen, it is a problem of many people. Life of the retired in Israel is not that sweet. Certainly, Israel is rather developed country, developed in many aspects, including medicine, so on the medical level the old citizen are well maintained, but on the social one they are really not. They don’t get the pension from the national budget, they just get little sums of money accumulated during the years of their work, which they paid over to the Institute of National Insurance. Moreover the situation has worsened by the tough reforms held by the Finance Ministry, which increased the retirement age and decreased the pension size.

What I really don’t understand is how she could hide it from everybody, especially from her daughter…She slept during years on one and the same mattress without even causing even any suspicions?

Johnny December 27, 2009 at 3:58 pm

That is a really crazy story, I have heard of lots of older people hiding money in their walls and all sorts of creative places. It’s too bad they choose to keep their money in places like this, because you always take the risk of something strange happening like a daughter selling your mattress, or a house fire. There was a guy in my local town who was rumored to have all of his savings in his house, and a couple of punk kids caught wind of it, and went to his house and pistol whipped him until he gave up the location. Luckily they were morons and were caught less than a day later, and the man got his money back, but he had to have facial reconstructive surgery.

Regal Sleep November 26, 2010 at 1:57 pm

I would love to get that old mattress as a gift and find all that money in it! That would me amazing…

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