I’ve known 3 fantasists in my life: one a teacher as this guy was, with a very similar background. He’d create some type of fantasy life and then act it out until found out. He didn’t gain from these monetarily at all. A wonderful inspirational teacher who was much loved despite his oddities.
The second also believed his own dreams and did bizarre things like apply for public roles he’d have no hope of getting and be manifestly unqualified for, eg head of BBC despite having a normal job. Harmless but the mental illness got the better of him in the end.
The third was a woman which is relatively unusual. She claimed to own mega houses she absolutely didn’t, saying she lived modestly for “security reasons”. Of the 3, she was the most sneaky - no public profile etc. - and didn’t respond to challenge well.
My personal opinion is that it’s a form of grandiose illusions. They’re not happy with their (nice) lives and create fantasies where they are “better” versions of themselves. They know they’re not believed.. Basically it’s mental illness.