Sometimes rich people lose their wealth. Things can go wrong. Sometimes those things that go wrong are outside the control of the wealthy (that is, random bad luck) but more often than not they are things that are completely within their control.

 When Prince died, he had no will and no estate planning.

You would think they’d know better, but they don’t. The wealthy who make these mistakes all seem to be reading from the same script. So, I thought I’d share a few of the most common blunders of the rich that steal their wealth like a thief in the night:

1. They watch their pennies, but blow their dollars

Many millionaires are frugal. This means they penny pinch dry cleaner costs, bank fees, credit card fees, landscaper costs, grooming expenses such as haircuts and manicures, professional service fees such as CPAs, attorneys, and doctor and dentist charges. They will fight like a Tasmanian devil if they think they were overcharged for a grocery item or a restaurant charge.

And then these same penny pinchers will go out and buy a boat, Tesla, a diamond ring, or take an absurdly expensive vacation.

There are far too many wealthy business owners who fight to keep wages down at their business only to spend those hard-fought savings on yachts, big homes, or expensive cars. It’s as if they have Jekyll and Hyde battling it out inside their very own body.

2. They get too emotional about their investments

The vast majority of the rich are long-term investors. They buy, hold and never panic. In fact, when the economy turns south they might even double down on their investments, buying more at a discounted price.

But there are some wealthy individuals who invest aggressively and continue to do so until the economy turns south. Then they panic and begin unloading their investments. These so-called “aggressive investors” are actually conservative investors in disguise. They are sheep in wolf’s clothing. And their wolf disguise comes flying off the moment they start losing money.

3. They fail to realise the devil is in the details

Most wealthy individuals become wealthy in one of four ways:

* They live below their means (save more than they spend)
* They expand their means (grow their income)
* They do both (save and grow income)
* They inherit their money

Some of the individuals who fall into the expand-their-means or inherit-their-money categories have something in common: They often do not pay attention to the devil in the details.

They don’t review their monthly bank transactions, monthly bills, or monthly credit card statements in order to make sure there are no unauthorised transactions or fees. They also don’t review transactions such as hotel bills, retail purchases, or restaurant tabs to make sure they were not overcharged and paid the correct amount. They also don’t review their expenses at least once a year to see if they can reduce those expenses for the following year.

For example, cable and cell phone costs keep going down due to increased competition. If you don’t spend any time trying to find the lowest price, it could result in you to paying more than you should.

4. They keep all of their eggs in one basket

When one stream dries up due to economic downturns, the other streams of income can come to the rescue like a knight riding on a white horse.

But some rich people make the mistake of tying the bulk of their assets up in one place, such as their own business or in real estate — two very illiquid investments. For these wealthy individuals, when something goes wrong, they are forced to sell some of their investments at a discount or increase their debt by securing a loan or tapping their credit line.

5. They don’t plan for the future in a realistic way

Another common money misstep is lack of proper planning. The three big missteps in this category include:

* Lack of adequate retirement planning
* Lack of adequate estate planning
* Not having an updated will

When Prince died, he had no will and no estate planning. Settling an estate with an old will or no will at all increases the costs of probate. Also, without an estate plan in place, you will pay higher federal and state estate taxes and inheritance taxes. Millions of dollars of Prince’s estate will now go to paying the salaries of politicians.

6. They’re generous to a fault

Too much of anything is bad, and this applies to giving away your money.

Once you give away your money, it’s gone. Self-made millionaires are pretty responsible when it comes to distributing their wealth to others in need, but those who inherit their money or those to whom the money comes with little effort have a tendency to be irresponsible with their giving.

When you don’t have to work very hard for your wealth, you simply do not value that money as much as you otherwise would, and there is a tendency to give too much of it away to family, friends, or charities. Once people find out you’re rich, they hit you up for money. It can come from every direction and overwhelm you.

Those who anticipate this deluge establish a maximum amount of money they are willing to give away every year.

Staying wealthy is not as hard as getting wealthy, but it’s still hard. Any one of these six blunders can act like an anchor dragging you down off your mountain of wealth. Being aware of them is probably the most best insurance you can have to preserve your wealth.