Why do so many Founders and Athletes who make so much money lose it all eventually?
I admire Floyd Mayweather. He's earned over $1B+ and had a net worth of $400M. And somehow he's selling his homes, his jets, and facing criminal charges for failing to pay for a watch.
His burn-rate is crazy, apparently:
- 100 vehicles
- Blew $50M on gambling
- Has a full-time barber
We all know that a lack of financial discipline is one of the root causes but that's not what this post is about. You can go ask GPT if you want to learn about his financial mishaps (it's fascinating).
The Lawsuit
I'm more interested in the fact he's suing his former wealth manager for $175M.
He met Jona Rechnitz at a basketball game. They became friends and Jona became part of his entourage as a jewelry seller.
"I trust Jona. Not just 10 percent, 20 percent. 100 percent. Jona is my friend!"
By 2024 Jona became Floyd's de facto investment manager, real estate adviser, and banking liaison.
The Allegations
Now he's being sued for:
- $7.5M wired for a 12-month investment that never existed
- $15M in settlement proceeds moved to a shell company without authorization
- $100M in jewelry pledged to two Miami jewelers for a $13M loan
- Sold his $60M Gulfstream jet with the buyer field left blank
- Embezzling distributions from his real estate portfolio
To make matters more absurd, Jona was a convicted felon for wire fraud and it was always in the public record. This is a classic case of founders financial blindness where trust overrides due diligence.
The Root Problem
The root problem is that many Athletes and Founders trust their "guy" and this NEVER ends well.
I believe the solution is to hire a real wealth advisor, e.g. a licensed RIA.
I caution against hiring smaller one-man firms or teaming up with other family offices. This is one area you want to be super conservative as the risk of fraud or being taken advantage of is very high.
Focus on the reputation of the firm as much as the individual wealth advisor. If you're wondering how to become a better CEO, understanding wealth management is part of that equation.
My Approach
For me... I personally trust UBS with most of my liquid assets.
There are plenty of other great firms out there such as J.P. Morgan, Goldman Sachs, and Morgan Stanley.
The Bottom Line
Don't trust friends with your fortune. Hire a professional wealth advisor from a reputable firm with a proven track record.
The risk of fraud when working with friends or small operations is simply too high. Your financial future deserves the protection of established institutions with real accountability.
If you're building wealth, treat protecting it with the same seriousness you treat earning it.
