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Spending Habits Examined

I think we have had several people in the finance business fall into this trap and some are now in prison or on their way to prison. I sometimes wonder which came first - the chicken or the egg. Is it possible for a person to swindle millions from innocent people and live lavishly (million dollar homes in several locations, expensive toys, etc) without the people around him/her questioning where all this money is coming from? Do they enjoy the lifestyle of the rich and famous to the degree that they don't question? My husband and I certainly do not have a lavish lifestyle (we're both educators - lavish isn't part of our vocabulary!). However, I do know when he has extra money and I always ask where it came from - not because I don't trust him but rather as a point of reference since I handle the finances for the family. We both do extra teaching jobs which give us extra money to do something special or to get a bill paid sooner. I am thinking that if all of a sudden we have money all over the place - I probably would be asking a lot more questions. Explain.

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The real-life example that comes to mind is with Madoff and his wife. Whether or not she knew, or wanted to know, are much debated questions and it certainly is interesting to look ...

Solution Summary

The solution provides a brief response to the questions posed by the student on business management.