Becker Private Equity & Business Podcast

Host: Scott Becker
Episode: “Even the Rich Go Broke”
Date: December 20, 2025

Episode Overview

This episode of the Becker Private Equity & Business Podcast, hosted by Scott Becker, delves into the theme “Even the Rich Go Broke.” Using the real-life story of billionaire Gary Winnick, Becker explores how excessive leverage and living off borrowed money can lead to financial disaster—even for those who, on paper, seem untouchable. The underlying message: debt can destroy families, companies, and countries, regardless of wealth.

Key Discussion Points & Insights

The Gary Winnick Story (00:30 – 03:30)

• Background: Gary Winnick was considered a highly successful entrepreneur and investor, known for founding Global Crossing (an ambitious Internet infrastructure company).

• Perceived Wealth: At his peak, Winnick was believed to be worth about $6.5 billion. He maintained a lavish lifestyle, investing heavily in real estate and other illiquid assets.

• Leverage and Lifestyle:

  • Instead of liquidating assets to fund his lifestyle, Winnick borrowed heavily against his portfolio and companies.
  • Many wealthy individuals use this tactic to avoid paying taxes on realized gains, as recommended by some advisors.

  "…what the tax advisors are very bad about preaching and the money management people are very bad about preaching is that you may take on these massive debts, but if in fact your asset portfolio goes down, you could end up in a disastrous spot."
  — Scott Becker (02:36)

The Danger of Illiquidity and Leverage (02:10 – 03:30)

• The Hidden Risk:

  • The value of Winnick’s assets fell over time, but his debt remained constant.
  • Upon his death, his family faced a financial crisis, with his widow struggling to maintain any semblance of their previous lifestyle.

  "The thing about debt, and this is why you always say that debt kills families, countries and companies, is that debt doesn't go down in value unless you pay it off."
  — Scott Becker (02:47)

• Life Lesson:

  • Leverage magnifies risk: if asset prices drop, debts can quickly overwhelm net worth.
  • The Winick story highlights the dark side of leveraging—regardless of initial wealth.

Becker’s Key Advice (03:30 – 04:10)

• Personal Stance on Debt:
  • Becker is debt-averse, even suggesting he might have become wealthier by embracing more leverage, but he values financial safety over potential gain.
  • He emphasizes the destructive power of debt: "Debt kills families, it kills companies, it kills countries. Even the rich go broke." (04:03)

Notable Quotes & Memorable Moments

• On Living off Borrowed Money:

  "Rather than converting assets into cash to pay for it, he had borrowed against his portfolio and borrowed against his companies to live the lifestyle he was living."
  — Scott Becker (01:30)

• On the Perils of Debt:

  "Whenever anyone ever tells you that leverage is the way to get rich... I would tell them the Gary Winick story."
  — Scott Becker (03:45)

• Core Takeaway:

  “Debt kills families, it kills companies, it kills countries. Even the rich go broke.”
  — Scott Becker (04:03)

Important Segment Timestamps

• Gary Winnick introduction & background: 00:30 – 01:10
• Explanation of asset borrowing & tax avoidance: 01:15 – 02:05
• Crash of asset values & aftermath for family: 02:30 – 03:15
• Becker’s personal views on debt and risk: 03:30 – 04:10

Tone and Style

Scott Becker’s delivery is straightforward and cautionary, blending storytelling with practical financial wisdom. He uses real-world examples and direct language to make his points resonate, maintaining a conversational yet authoritative tone throughout the episode.

Takeaway

This episode is a cautionary tale for anyone tempted by the promise of leverage as a path to wealth. Scott Becker warns that true financial stability comes not from maximizing debt, but from prudent management and understanding the relentless, unchanging nature of borrowed money—even when you seem rich on paper.