That Time Someone Gave a Homeless Person $100,000 Just to See What Would Happen

reversal-of-fortuneIn 2005 a homeless man called Ted Rodrigue stumbled upon a briefcase filled with crisp $20 and $50 bills totaling $100,000 (about $123,000 today). Ted was then told by screenwriter Wayne Powers that the money was his to keep and do with as he wished, so long as he would allow a film crew to document the result. Rodrigue, understandably, jumped at the opportunity, leading to a somewhat controversial documentary- Reversal of Fortune.

According to an interview with Powers, the genesis of the documentary stemmed from his time in LA where he was frequently asked for money by the homeless, prompting him to ponder, “What would a homeless person do if I gave them a million dollars?” Powers was curious if such a substantial amount of money could change a person’s life for the better or if it’d simply make it worse. He took this idea to an executive at Showtime where he’d briefly written a short-lived series called Out of Order. The executives loved the idea, but weren’t exactly thrilled at the idea of paying out a million dollars, eventually talking Powers down to $100,000.

With funding in hand, all Powers needed was a homeless person to give the money to. According to him, he picked Ted after filming several conversations with him and coming to the conclusion that Ted was a man who’d been dealt a bad hand and deserved a break for once.

As Ted put it, “When I look back at my childhood, I think it was screwed up. My mother was an alcoholic. We used to have parties all the time at the house. We used to as kids sneak in and grab a beer; sometimes they’d even give us one. I started drinking- I’ve been drinking since about 13.”

After he moved away from home, he noted,

Basically I spent my twenties in prison. And that’s when it really seemed like nobody gave a sh*t anymore. When I got out of prison, I got no help from anybody.  That’s when I started to learn to survive on the streets myself…

If I could have my dream, I’d just live in society like a regular citizen. But I don’t see it happening.  It’s too easy for me to say, “To hell with it.” Because I know how to survive out here.  If things don’t go my way or I get pissed off at a boss, it’s too easy for me to say, “To hell with you,” and move on, because that’s what I’ve done all my life.

Mostly homeless for about two decades when filming began, the then 45-year-old Rodrigue survived by collecting cans and bottles. On an average day, he noted he could make about $20 or so doing this- enough to buy himself food, alcohol, and cigarettes. On a good day, he could sometimes earn as much as $35.

Despite his homelessness, Ted revealed that he was relatively happy. “I kind of like recycling because I don’t have [anybody] telling me what to do. I go do it when I want. Quit when I want. Take a break when I want. I have nobody to answer to. If I choose not to go out today, if I just want to sit in the park, I can do that.”

He even had a prized possession in the form of a bicycle, which he lovingly cleaned on a weekly basis at a car wash- much more rigorous cleaning than he afforded his own body.

According to the documentary, prior to his windfall, Ted’s only real friend was a young man called Mike who worked at his local recycling plant. Ted noted he considered Mike something of a son. Whether the feeling was mutual or not isn’t clear from the documentary, though Mike did seem genuinely friendly towards Ted.

Besides alcohol and cigarettes, Ted avoided drugs owing to bad experiences he’d had with them earlier in his life. “I’ve used every drug there is. I see what it does to people. You get scandalous. I started breaking into people’s houses… You steal from your friends…”

In short, after passing a drug test to prove he really was drug-free (outside of alcohol and nicotine) as he said and undergoing psychiatric screening, Ted seemed like the ideal candidate for Powers’ little experiment.

After the screening was done, Powers and the rest of his film crew, rather than simply giving Ted the money, chose instead to hide it in a dumpster they knew he frequently searched for cans and bottles in. Presumably because originality is a scarce resource, they chose to hide the money inside of a non-descript briefcase with a note reading:

What would a homeless person do if he were given $100,000?

Upon finding the briefcase, Ted, showing remarkable restraint, immediately thought about leaving it behind, wryly quipping in a later interview: “I thought I was going to get shot. I thought it was drug money. Then I thought it was a prop for the movie, and I would have to give it back.

Once he was reassured by the filmmakers that the money was his to do with as he liked, the gravity of his cash windfall finally struck home.

From this moment on, the filmmakers didn’t interfere with Ted’s life or his spending in anyway, merely observing and documenting his day-to-day life. They did, however, give Ted access to a financial advisor whose advice he was free to solicit or ignore as he chose.

So what was the result?

After a brief meeting with the financial advisor, Ted bought himself a new bicycle and took it and his friend Mike to an amusement park. Following this, Ted rented a room in a motel, but due to years of sleeping rough, he found it hard to adjust and ended up sleeping on the floor. As you can see, up until this point, Ted’s financial decisions were reasonably restrained and probably not too dissimilar to what any of us would do.

But what happened after very closely resembles what happens to many big ticket lottery winners, 1/3 of which go bankrupt within five years, most of which subsequently suffer social problems and often depression, even if they are sensible with their money, and occasionally they even get murdered by former friends and family. (Luckily Ted avoided the third of these gruesome outcomes.)

As financial advisor Szifra Birke says:

For many people who come into wealth suddenly – whether they win the lottery, receive an insurance settlement, or an unexpected inheritance – if they have not acquired good money skills prior to this windfall, often they struggle and make poor choices.

(Interestingly, those who get the money and then choose to start a business with it, rather than just blow the money, are often no better off than those who just spent the money on hookers and blow. For more on the reality of the aftermath of winning the lottery, see our article here: On Average, People Who Earn Less Than $13,000 a Year in the U.S. Spend 5% of Their Gross Earnings on Lottery Tickets)

So what specifically happened to Ted? Soon after finding the money, news of Ted’s wealth spread to his associates in the homeless community who came to him asking for help. Being a generally nice guy, Ted kindly obliged, paying off many of his “friends” debts and providing for them financially. Around this time, Ted also met a woman who magically became attracted to him the moment she found out he’d acquired $100,000.

And she wasn’t the only one. “The women were just flocking all over. I’d walk out of the bar just to get away from everything and they’d just follow me out.  It’s not about me. It’s about the money.  I know that. I’m not f*&king stupid.”

It was at this point that Ted adopted the policy of, as he put it, “bang ’em and leave ’em,” though he did spend lavishly on the women as well, including buying one of them, who he would later marry, a car. (He bought his young friend, Mike, a car as well, though did not marry him…)

Next up, Ted left Pasadena to visit his family in Sacramento. Previous to his windfall, he stated his mother had long since stopped talking to him and his relationship with his sisters was somewhat strained. However, unlike most people in Ted’s life at this point, his family, at least as far as the footage shows, showed genuine concern for his well-being, and rather than asking him for any money, invited him to stay with them in Sacramento and encouraged him to save the money and get a job. His sisters even made phone calls on his behalf to find him work doing something he liked, like construction.

Ted, however, didn’t appreciate their efforts- not liking them trying to meddle with his life, as he saw it. He brushed off their concern and even refused to continue meeting with his financial advisor, believing that he just wanted his money like most everyone else.

Speaking of which, it was eventually revealed that Ted wasn’t interested in finding work, as he believed, or at least he said, he thought the $100,000 was enough money to last the rest of his life… a statement he made shortly after spending $34,000 dollars on a truck and several thousand more dollars renting and lavishly furnishing a luxury apartment.

This said, the documentary clearly shows Ted, while perhaps quite under-educated, is no idiot, and it’s more likely this was just talk, and he knew well the money wouldn’t last forever; but having lived for so much of his life day to day, never thinking about tomorrow, and as he said, “Because I know how to survive out here,” he perhaps wasn’t at all concerned that he was going to end up back on the street if he didn’t find a job. Instead, he seemed focused on enjoying the moment, as he had for pretty much his whole life.

Once again, this may all seem amazingly short-sighted and even moronic of Ted, but if big ticket lottery winners or others who suddenly come into a lot of money are any indication, even the most intelligent and previously financially stable of people tend to do pretty much the same thing- spend it wildly on themselves and everyone they know until it’s not only all gone, but generally they’ll continue from there and drive themselves into massive debt. In the case of big ticket lotto winners, this all happens despite likewise being given a consultation with a financial advisor who specializes in helping lotto winners and who advises them against the pitfalls that befall many in their situation.

And as for those who spend frugally and save the rest, not giving any away to friends and family, according to the Certified Financial Planner Board of Standards, many end up ostracized from their loved ones over their unwillingness to share and have a much higher risk of suffering from depression, drug abuse, divorce, and suicide than their peers. This has led to the dark joke among those who work at the Board of Standards, “If you really hate someone, buy them a lotto ticket.” Again, see our article on the subject here.

As for Ted, he later sum it up: “You never think … ‘the money’s going to run out sooner or later’.”

A mere few months after Ted was given the $100,000, the filmmakers became concerned with how much of the money Ted actually had left, causing Ted to become more paranoid about his financial situation, and ceasing to share his bank statements with them.

About a year later, Ted appeared on Oprah in an episode entitled “Are You Ready for a Windfall?” that dealt with various individuals who acquired massive amounts of money very quickly, whether by winning, being given, or even earning it by their own hard work- with the overarching connection being all of them went from meager means to great almost overnight.  In the cases of those who appeared on the show, they saw their lives go on a downward spiral because of the windfall. It was on this episode that Ted sheepishly revealed that he’d spent or given away all $100,000 within 6-8 months of receiving it, and that he was, once again, homeless.

Curiously, Ted appeared resentful about the whole thing and expressed that, while not happy with his situation, he was at least very content to once again be homeless and back where he started.  It’s also noted that Ted’s marriage broke apart as soon as the money ran out and all of the “friends” he’d made and helped abandoned him. (He did not mention if his one former friend, Mike, who he’d bought a car for likewise left.) To top it off, due to his splurging, Ted revealed that he was now in debt, though he did not specify how much.

Ted’s current whereabouts and situation aren’t known. The most recent update we could find on his situation is from 2007- two years after the documentary. At this point, he was still homeless and recycling cans and bottles for money.

Powers noted of all this,

It was a frustrating process, in a way, because I think that there were a lot of opportunities sent Ted’s way… And while you’re with someone, and the closer you get to them, and the more that you kind of root for them and understand them, the more frustrating it gets when those opportunities are passed by. I think that it shows that, from a personal story, people that are homeless, there are certain demons inside them. … I think alcoholism plays a part of that. I learned that in providing somebody with the necessities to be able to turn their life around, a car, a telephone, a roof above their head, a driver’s license, all the things that we hear is what somebody needs to be able to turn their life around, it still, unfortunately, in this particular case, was not enough.

So to answer the question of what happens when you give a more or less drug-free, reasonably psychologically sound homeless person $100,000… pretty much the exact same thing that often happens when you suddenly give a non-homeless person a relative fortune compared to what they’re used to- as with many big ticket lotto winners, they often end up worse off or in the same state as before they got the cash, perhaps with a little depression added in for good measure, something of a Flowers for Algernon effect.

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Bonus Fact:

  • According to the National Coalition for the Homeless, there are approximately three quarters of a million homeless people in the United States, with the average age being a shockingly low 9 years old, with this number driven so far down due to how many homeless families there are on the streets.  Interestingly, they note that about 40% of homeless adults are regularly employed in some fashion or other.
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  • Snidely Whiplash

    It’s hard for many to believe, but there is a segment of homeless people that just prefer it that way.

  • Momojoe

    so…. 750,000 homeless people * 100,000 = 77 Bi could make not homeless anymore…. for 6-8 months, then back to where they like most… so, the hell with it: give that to me !