A few things need to be understood about the Spanish Empire to explain this. First off, the Spanish managed their overseas empire using a sort of pseudo-feudalistic system, in which nobles retained their titles and presided over estates and then handed over some of their profits to the Spanish crown. If you've ever learned about Feudalism, you'll know it's a horifically inefficient way of managing land. If you haven't, it essentially consists of giving a few select people, with no training or qualifications, enormous amounts of hereditary power, and asking them to give some of their money to you. It simply doesn't work. The Spanish discovered this in the 1600s.

In the early 1500s, the early colonial period, Spain was indeed riding high. The empire was paying for itself, just, and so every bit of land that could be added to the empire would just be more prestige and gold for the empire, what could be better? Through some weird dynastic crap, they also managed to inherit the Netherlands and much of Italy. They held an insane amount of land.

Holding that much land is difficult, very difficult. When the Dutch revolted against Spain in the mid 1500s, sustaining the army in the Netherlands nearly bankrupted the nation. She lacked the technology to look after an Empire that had been built more or less by accident.

The Dutch revolt set of a total shitstorm of events, the Spanish empire would then repeatedly file for bankruptcy, the colonial feudal system was no longer paying for itself and the costs of maintaining the empire ballooned. By 1701, Spain was doing so poorly, it was about to be inherited by France.

The other Europeans didn't like the sound of that mega-France, so all dogpiled on top of Spain-France and destroyed the Spanish in a war called the 'war of the Spanish succession'. By 1714 she was utterly ruined. This is generally considered the end of the Spanish golden age.

Things went from bad to worse by the 19th century, when the colonial empire declared indepdence, Spain was reduced to total irrelevance, and thus, by the late 1800s, she was a complete and utter pushover.

The Spanish Empire is amazing, she exploded into the world first global superpower in an astonishingly quick amount of time almost entirely by accident, and then completely collapsed, all in the space of like 200 years.

Hope this helps!