Houstonian, former heavyweight boxing champ and now successful businessman George Foreman is featured in this Timothy O’Brien/New York Sunday Times article from last weekend that explores the question of why many prominent people are incapable of maintaining their wealth and end up wrestling with insolvency.
Foreman, who is a remarkable and fascinating fellow, tells the story in the article of how he blew his first fortune from winning the heavyweight championship the first time around and how that experience drove him to make the attempt to win it again at the age of 45. Big George rebounded from his insolvency experience by earning several multimillion-dollar purses during his brief return to boxing in the early-1990ís and then making millions more by reinventing himself as a good-natured entrepreneur and pitchman, cleverly peddling the popular hamburger grills that bear his name.
Interestingly, Foreman’s flirtation with insolvency did not involve the usual story of corrupt managers taking advantage of a young, uneducated and unsophisticated boxer. Rather, Foreman experienced insolvency the right way, taking risks and learning from them:

Mr. Foreman, unlike most entertainers and athletes, had homegrown financial antennae, and his budgetary acumen surfaced at a relatively early age. He slugged his way into prominence by winning a gold medal at the 1968 Olympics, and a year later, when he was 20, he turned pro. Schooled, he said, in the perils of errant spending by the financial predicament of the boxing legend Joe Louis, he decided to form the George Foreman Development Corporation in 1971.

ìI had so much time alone,î he recalls. ìNot many people thought I would be champ of the world. Didnít have any friends at all. And what I would do is walk to the bookstore, and Iíd buy books. And they were books on taxes, accrual taxes, estimated taxes, and you better make a corporation.î
Mr. Foreman says his homework persuaded him to put about 25 percent of what he earned at every bout into a pension and profit-sharing plan controlled by his corporation. ìI had all this time dreaming of this, so that when money came upon me I was already prepared,î he says.
Despite how closely Mr. Foreman tended his nest egg, most of his assets remained exposed. He describes the way he invested his unencumbered cash, about $5 million, as a series of blunders: ìOil wells, gas wells, banks, flop, flop, flop.î

Despite a present net worth of several hundred-million dollars, Foreman is not complacent:

ìI will never feel secure again,î he says. ìIíve got to earn, earn, earn, earn.î
Respect every dollar, Mr. Foreman reiterated, respect every dollar.
ìYou can become complacent,î he says. ìYou can say, ëIím successful,í which is the kiss of death. In America itís hard to wake up hungry. Itís frightening. You can become complacent and wake up tomorrow totally homeless.î