Don’t Try to Get Rich Twice

Don’t Try to Get Rich Twice

December 6, 2022 by Ben Carlson

Before becoming one of the most important movie studio executives of the 1970s, Robert Evans took a break from the glitz and glam of Hollywood to work for his brother’s apparel line, Evan-Picone.

The company was so fashionable in the 1960s that every investment bank was pushing them to go public.  Before going that route, Robert’s brother Charles put a call into Charlie Revson, the founder and owner of Revlon.  After six months of back-and-forth negotiations, Revlon agreed to buy Evan-Picone. The deal was for $12 million (which would be more like $100 million today).

The brothers Evans each owned a piece of the company, although Charles received a bigger payout since he helped found the brand.  They both earned a life-changing amount of money from the sale but the risk profile of the brothers was polar opposite.  Charlie wanted to conserve his wealth while Robert wanted more.  Evans explains what happened next in his wonderful biography, The Kid Stays in the Picture:

As brothers, Charles and I were so alike yet so different. Charles ultraconservative, me a gambler. Today, Charles is a millionaire a hundred times over. Me, I’m still in hock.

Our first investment, after selling Evan-Picone, was in a speculative mutual fund. Charles, the far richer, put in $25,000; me, a quarter of a million. Two months later, the fund went bust, I mean bust—zero back on the dollar. How depressing it would have been to know then that it was a portent of our financial futures. Even in the gold-rush eighties, I came up a loser.

Evans spent much of his life going from boom to bust and back again — making a lot of money, losing it all and repeating the cycle.  He later admitted, “Going for broke rather than going backward had always been my style.”   This style helped him in the movie business but hurt his finances.

There’s nothing wrong with taking some risks, in your career or with your money. There is no reward if you take no chances.  But there are certain risks that are avoidable and unnecessary depending on your circumstances.

To continue reading, please go to the original article here:

https://awealthofcommonsense.com/2022/12/dont-try-to-get-rich-twice-2/