Prince Moneybags was born as a prince in Mesoequestria's Underground Kingdom with his brother, Hippus. His parents, the current rulers, have chosen Hippus to be the next ruler since Moneybags was too unfit for ruling a kingdom due to his arrogance and greed. They instead gave Moneybags a job as a bank clerk, where Moneybags was excited to be near wealth and profit. He eventually got better at helping out with money, and gained his cutie mark, a bag of money with a dollar sign on it.
Moneybags soon got bored with controlling the money of his home instead of running it. He decided that he should be the rightful king of Mesoequestria, and that nobody would stand in his way. Since then, Moneybags began secretly studying the dark arts of black magic after sneaking a book from his brother's room, and replaced it with a fake life-like version. For years, he had improved in his abilities, and has even developed a way to control people's minds by using their worst fears and using their lifelong wants to corrupt them. These kinds of powers he decided would be the most useful. So he studied more on these powers while improving himself on others. Then on the day of the birth of his nephew, Calypso, he improved his most favorited skill at a vast level. Unfortunately, by doing this, his own subconscious gives him a vision of his future where he is in court, being told that he will lose his privledges in royalty, he is fired from his job at the bank, he is turned into an earth pony and will never use magic again, and he is banished to Tartarus where he will forever be shamed of his own greed.
Seeing this vision, Moneybags is devastated. But he would not take it so easily. In his time learning black magic, he is trained to overcome his fears. He wanted to prevent this future from coming true by training more and gaining enough power to become unstoppable. He spent the next few years improving his abilities, and when he was sure he was ready, he went into action. He went to the kingdom gates where he bewitches the guards into serving him, and explains to them what he is prepared to do. But unbenownst to him, Calypso, being a young filly, has overheard him, and attempted to warn his father before it was too late. Sensing this, Moneybags ordered Calypso's arrest. Calypso was knocked out, and taken to an isolated prison cell where Moneybags would decide what to do with him later.
Meanwhile, King Hippus, wanting to read, rummages through his bookshelf, only to find something odd about the forbidden black magic book. He has just discovered it to be a fake. But by that time, Moneybags appears and sends him to an underground cave the same way Chrysalis did to Twilight while taking his own crown. There, Hippus is trapped and isolated from the rest of his kingdom, and to discover from his brother that he has been overthrown and that Moneybags had total control of the kingdom. Hippus was unable to get out due to Moneybags placing a curse on him before he was sent to the cave, which haunted his mind with his worse fears whenever he tried to get out. Over time, this curse weakened his magic abilities, making him powerless to stop Moneybags. After taking care of Hippus, Moneybags returned to Calypso to tell him that his father will not come to his aid anymore, and that he has taken control. He explains that he did not simply kill him and risk being arrested for murder, nor will he do the same to Calypso. Instead, he cursed Calypso into being haunted by his worse fears whenever he tries to get help. Then, Moneybags ordered his banishment to the surface world where no one would think to look for him. Over time, Calypso lost his memories of what he saw concerning Moneybags' plan, leading him to forget the situation, and to only have the want to go home.
After Calypso's banishment, Moneybags began his tyranny by placing a curse on all of Mesoequestria which would prevent any rebellion or revolt, and begin levying evil taxes on the land, taking away homes and property from those who failed to pay the taxes, and imprison those who couldn't pay. This resulted in a time of Great Depression. It seemed that unless someone came to their aid, all may be lost. But there would always be a way to fix even the most impossible task possible. Soon, Moneybags will be defeated.