Page 47 - Psychology of Money - Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

And yet, the fraud.

COBACOBA
The question we should ask of both Gupta and Madoff is why someone
worth hundreds of millions of dollars would be so desperate for more
money that they risked everything in pursuit of even more.

Crime committed by those living on the edge of survival is one thing. A

Nigerian scam artist once told The New York Times that he felt guilty for
hurting others, but “poverty will not make you feel the pain.”¹³

What Gupta and Madoff did is something different. They already had
everything: unimaginable wealth, prestige, power, freedom. And they threw
it all away because they wanted more.

They had no sense of enough.

They are extreme examples. But there are non-criminal versions of this
behavior.

The hedge fund Long-Term Capital Management was staffed with traders
personally worth tens and hundreds of millions of dollars each, with most of

their wealth invested in their own funds. Then they took so much risk in the
quest for more that they managed to lose everything—in 1998, in the
middle of the greatest bull market and strongest economy in history. Warren
Buffett later put it:

To make money they didn’t have and didn’t need, they risked what they did
have and did need. And that’s foolish. It is just plain foolish. If you risk
something that is important to you for something that is unimportant to you,
it just does not make any sense.

There is no reason to risk what you have and need for what you don’t have
and don’t need.

It’s one of those things that’s as obvious as it is overlooked.