Not too long ago I wrote an article entitled The Rich are feeling the pinch and only one month later my predictions became even more revealing. This story of German Billionaire Adolf Merckle has been in the news for a few days now. But I wanted to take time to elaborate on this trend of Rich people falling on hard times, and just how much more of this we can expect to see.
His Empire was falling apart...
Mr. Merckle - whose estimated $9.2-billion fortune ranked him 94th on Forbes' list of the world's richest people, and ranked as Germany's fifth-richest person. In today's economy he became just like everyone else, desperately seeking emergency financing from a group of more than 30 banks led by Commerzbank AG, Deutsche Bank AG, Royal Bank of Scotland and the Landesbank Baden-Wuerttemberg.
This man's empire spanned the cement, machinery and drug industries. What kills me...is that he owed about 5 billion in debts, and just like in my previous article I had mentioned that for some wealthy people, dropping from billionaire to multi-millionaire is just too much to bear despite the intrinsic monetary values that these companies still have.
The Merckle family - stakes in Heidelberg Cement, Germany's biggest cement maker, Phoenix Pharmahandel, a drug wholesaler, and Ratiopharm GmbH, a generic drug maker, these were powerful conglomerates with assets well beyond projected worth. I've spoken with a few of my friends in the mental-health profession and they've all told me that Merckle is one of many in a lengthening list of high-profile investors around the world to take their own lives. Merckle's livelihood was certainly not threatened by his risky investments, but he was threatened by shame, a loss of face in society and a loss of honour.
Now it's left to the trickle down effect that will be felt as a result of his death, and his shares and companies being sold to creditors will plummet his entire life's work, already his building-materials supplier, based in Heidelberg, slid as much as 13%. Mr Merckle started his climb in 1967 at a time when his company had only 80 employees and 4 million deutsche marks (US$2.5-million) in sales, too bad he couldn't remember those times...and use it as his motivation again.
A lesson for all aspiring entrepreneurs...
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