Money

Man who became a millionaire after living on $200 a month says these are the downsides of a windfall

Loren Krytzer walked into a California auction room broke and unemployed, surviving on disability checks. Seventy-seven seconds later, he walked out a millionaire — all thanks to a blanket.

His life changed forever when he discovered that a forgotten old family heirloom, a Navajo blanket from the 1800s that had been sitting in his closet for seven years, was actually worth $1.5 million. And just in time, too. He had been scraping by, living in a shack on the edge of California's Liona Valley, having lost a leg to a near-fatal car accident. Now he's living in a $250,000 home.

The sale of the blanket "gave me a new lease on life," Krytzer tells CNBC Make It. "It truly did."

But that new lease on life hasn't come without its own set of new unexpected challenges, including tax hurdles and family drama. As Krytzer explains, those are some of the biggest downsides to a windfall.

Loren Krytzer, 53, hikes with his wife Lisa.
Loren Krytzer
Loren Krytzer, 53, hikes with his wife Lisa.

Even after being braced for realistic expectations by advice of the CPA that worked for the auction company that sold his blanket, Krytzer was still shocked at how quickly a pile of money can dwindle.

"It's not like it was 40 or 50 years ago," he says. "If I'd have gotten $1 million 50 years ago, I'd be rich right now, I would literally be rich."

Instead, after having used most of his newfound fortune buying two homes in Central California, Krytzer says he is losing about $10,000 a year in insurance and property taxes alone. With no income stream now that his disability checks were cut off, Krytzer says that, to continue living off his windfall, he'll have to relocate to somewhere where the costs of living are lower.

Krytzer says his doctors told him he had five years to live after suffering a car accident. Ten years later, he's seen here enjoying a dune buggy ride with his wife Lisa.
Loren Krytzer
Krytzer says his doctors told him he had five years to live after suffering a car accident. Ten years later, he's seen here enjoying a dune buggy ride with his wife Lisa.

"We're getting taxed to death here, I can't afford it," he says. "I'm from California, I grew up here, but without working it's just hard to survive."

He and his wife are now looking into selling their house and moving north to Idaho where taxes aren't as burdensome and life is more affordable.

And then there's the issue of dealing with family members that hear about newfound wealth. In the immediate aftermath of the auction, Krytzer says he got calls from distant relatives asking for a cut and suffered from frequent anxiety attacks. Things got so bad he stayed in a hotel for five nights to decompress.

His sister even threatened to sue him, Krytzer says, for a portion of the profits from his family's blanket.

"People you haven't seen in years, family members that don't talk to you ... You get some money and they're like, 'Where's mine?'" -Loren Krytzer

"I had people calling me and bugging me and stuff," Krytzer says. "People you haven't seen in years, family members that don't talk to you ... You get some money and they're like, 'Where's mine?'"

It's been just as difficult to explain to his children that just because he received $1.3 million after fees doesn't mean he's able to buy them whatever they want.

"When I first got the money, I helped them out," Krytzer tells CNBC Make It. "But now it's like I can't do it, I don't have it, and they are like, 'You have millions of dollars, you're being selfish.'"

Krytzer was brought to tears once the price of his blanket crossed the $1 million threshold at auction.
John Moran Auctioneers |
Krytzer was brought to tears once the price of his blanket crossed the $1 million threshold at auction.

And yet, with all the problems that came with the windfall, Kryzter says the positives have outweighed the negatives. He spent wisely, for the most part, dedicating most of his funds to real estate, stocks and bonds, and he allowed himself some "splurge" purchases that he couldn't afford when he was living on just $200 a month after paying rent.

He took his new wife Lisa and his three daughters on a cruise to Mexico as part of a pre-honeymoon trip. And he bought a 2012 Dodge Challenger SRT8 that came souped up from West Coast Customs, the mechanic shop made famous by MTV's "Pimp My Ride."

"I never had nothing like that, so I wanted a nice car and I did, I bought one," he says.

Krytzer's first big purchase, a brand new 2012 Dodge Challenger SRT8 couldn't have come at a better time. His last car had over 200,000 miles and was burning oil.
Loren Krytzer
Krytzer's first big purchase, a brand new 2012 Dodge Challenger SRT8 couldn't have come at a better time. His last car had over 200,000 miles and was burning oil.

Overall, he says money hasn't changed him. Krytzer says with a smile that life has just gotten a bit easier since the auction — in fact, he credits it for saving his life.

"I firmly believe I'm here because years ago I turned my life around," he says. "The things I've been through, I tell people it's a strong faith and a strong mind. Without those things you're not going to make it."

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