What You Can Learn from These Rich and Famous Investors
Actors, athletes and entertainers earn the biggest of bucks. But what separates the one-hit wonders from the superstars and moguls is foresight, savviness and an eye for good investments. As tempting as it might be to splurge on yachts and exotic sports cars, the best celebrity investors have parlayed the income from their day jobs into smart and hugely lucrative investments.
These superstars have found success by diversifying their income streams and being early adopters of some of the most successful companies ever. If you’re ready to start investing, it pays to listen to these celebrities’ indispensable and sage investment advice.
LeBron James
Not many are able to replicate the success that LeBron James has created on and off the basketball court. The world watches as James continues to collect accolades and NBA championships, but it’s James’ financial and investing acumen that caught the attention of Warren Buffett. James uses his $85.3 million annual NBA salary to invest in companies like Blaze, a fast-casual pizza chain, and the English soccer team Liverpool FC.
Notoriously frugal, James doesn’t spend more than he needs to. “I’m not turning on data roaming, I’m not buying no apps, I still got Pandora with commercials,” James told ESPN. If an NBA superstar can get by on the free version of apps, so can you. Take that money you’re saving by being frugal and start investing in a Roth IRA to grow your wealth.
Ellen DeGeneres
Ellen DeGeneres doesn’t have her own HGTV home-flipping show, but she has a lot of experience with the practice. The queen of daytime TV has made a fortune in flipping homes over the years. She’s one of Hollywood’s real estate heavy hitters, and Forbes reported that she’s bought and sold 12 properties across Southern California. Her crowning achievement to date: a $15 million profit on a $40 million mansion.
If there’s one takeaway you can get from DeGeneres’ investing habits, it’s that real estate is still king. Even if you can’t afford to buy property, there are many ways to invest in real estate.
Ashton Kutcher
It’s tough for audiences to disassociate the dimwitted characters Ashton Kutcher often plays on screen from the real Ashton Kutcher. But it turns out that Kutcher is laughing all the way to the bank thanks to his investments. In 2011, he co-founded A-Grade Investments, a venture fund, and he was famously an early investor in Uber, Airbnb and Spotify.
Given his successful track record and eye for promising startups, Kutcher wrote that the secret to his success is simple, he will continue to, “keep working with great people on the problems that I want to work on.” Surround yourself with smart people — be it your financial advisor, co-workers, friends or spouse — and pay attention when the topic of investing comes up. You’ll likely learn a thing or two just from the company you keep.
Shaquille O'Neal
Since retiring from 19 seasons in the NBA, Shaquille O’Neal hasn’t slowed down a beat. O’Neal became the envy of every investor when he invested in Google in the 1990s on a whim. With his massive Google returns, O’Neal has continued to make smart investments in household companies like Apple, Five Guys, 24 Hour Fitness, Auntie Anne’s and Ring.
Rather than throw money into Bitcoin or other flashy status symbols, O’Neal’s investing philosophy is rooted in how the company he invests in will impact the greater good. “I invest in things that are going to make it better for the world that we live in,” O’Neal said in an interview with GOBankingRates.
When you invest in companies and products you truly believe in, you align your money with your values, which will leave you feeling good no matter the outcome.
Jay-Z
Jay-Z famously rapped, “I’m not a businessman; I’m a business, man!” and he wasn’t exaggerating. The rapper-turned-mogul has a hand in everything from a sports team to a luggage company and more, including Rocawear, a clothing company; The 40/40 Club, an upscale sports bar and restaurant chain; spirits brands Armand de Brignac champagne and D’Ussé cognac; The Brooklyn Nets, an NBA team; on-demand private plane service company JetSmarter; Roc Nation Sports, a sports management agency; recording labels Roc-a-Fella Records — then Def Jam Recordings — and Roc Nation; financial trading platform Robinhood; luggage maker Away, and Tidal, a music streaming service that Jay-Z owns with other music A-listers.
Jay-Z’s investing lesson is a classic one: diversify, diversify, diversify.
Alex Rodriguez
Alex Rodriguez was just a teenager when he was drafted into Major League Baseball and scored a $1.3 million contract. Instead of letting the money go to his head, Rodriguez had the foresight to recognize that his time on the baseball diamond would only be a small percentage of his entire life. It took some discipline, but Rodriguez exercised frugality and socked his money away. Thanks to compound interest (and an impressive baseball career), Rodriguez accumulated a massive nest egg that allowed him to create A-Rod Corp, an investment firm focused on wellness, sports and real estate.
Compound interest is a powerful concept that helps supercharge your money’s growth, making it a fundamental part of any investment’s success.
My Story: How Compound Interest Set Me Free
Jessica Alba
Jessica Alba’s fortune proves that identifying a gap in the consumer products market and creating your own company can pay off. The Honest Company was born out of her desire for organic and ethically sourced ingredients in household and cosmetic products for her small children.
The Honest Company, which has been valued at $1.7 billion, has weathered its share of PR nightmares due to unhappy customers, product recalls, leadership changes and lawsuits since the company’s founding in 2011. In June 2018, the company received a $200 million cash injection from L Catterton, a private equity firm.
PR nightmares aside, Alba never gave up on her hustle and has continued to grow her business and attract new investors. Whether the market is down or the company you have stock in is roughing it in the media, if you believe in your investments and stick with it, green pastures (usually) lie ahead.
Magic Johnson
Retired NBA Hall of Famer Earvin “Magic” Johnson has the magic touch when it comes to making a lifelong career out of basketball. He sits at the helm of the eponymous Magic Johnson Enterprises, an investment company valued at an estimated $1 billion. The swath of the company’s current and former investments range from Starbucks, T.G.I. Friday’s and Burger King locations; movie theaters; gyms and, in 2012, he shelled out $50 million for partial ownership of the Los Angeles Dodgers.
You’ve surely heard the adage, “It takes money to make money,” and Johnson epitomizes just that. The more money you have invested, the better chance you have to grow that money. Johnson’s nest egg would never have become so big if he hadn’t invested sizable sums from the getgo.
Robert De Niro
Robert De Niro lives a quiet life far away from the spotlight, so fans would be surprised to know that the Oscar-winning actor and producer is a savvy investor. De Niro’s decades-long career has afforded him the opportunity to marry his passions: moviemaking and hospitality. “They both have budgets, they’re creative in different ways. It’s like any enterprise. The movies are a business of a sort,” he told CNNMoney.
In his hometown of New York City, De Niro has carved out a piece of the restaurant industry with swanky hotspots like Tribeca Grill and Locanda Verde. De Niro founded Nobu, the upscale Japanese-Peruvian restaurant, and since the restaurant’s opening in 1994, Nobu has become a worldwide brand of 39 restaurants and eight luxury hotel properties.
In order to succeed in the market, even if you’re just investing for fun, you’ll need to treat it like a business. If you’re not keeping track of things, sticking to a budget or making regular progress toward your goals, you’re only failing yourself.
George Clooney
If it seems like George Clooney gets all the breaks in life, it’s because he does. The A-list actor-director-producer-screenwriter made a fortune from selling Casamigos, a tequila brand he co-founded, for approximately $1 billion in 2017. The sale of Casamigos even surprised Clooney, who told CNBC, “If you asked us four years ago if we had a billion dollar company, I don’t think we would have said yes.” Considering the founders each invested $600,000, Clooney and partners were rumored to take home $700 million with a potential for another $300 million over the next decade based on the spirit’s sales performance.
The lesson here is yet another classic: Buy low, sell high. In order to profit, you need to earn your initial investment back and then some. If that’s not in the cards just yet, wait it out.
Related: How to Know When to Sell Stocks
Francis Ford Coppola
Francis Ford Coppola is responsible for directing cinematic classics like the “Godfather” trilogy and “Apocalypse Now,” but he’s shared with Wine Enthusiast that his wine label, Coppola, is more lucrative than his movies. Following the success of the first “Godfather” in 1972, Coppola purchased a Napa Valley, Calif., winery for $2.2 million. Some years later, Coppola said the winery was yielding $60 million in sales. The director has expanded his brand to include three wineries, Italian restaurants and food brands, and resorts in Belize, Guatemala, Argentina and Italy.
Don’t limit yourself only to what you know. With some thorough research and advice from a financial advisor, you could find massive investment success in industries you’d otherwise disregard due to it being unfamiliar.
Read: 25 Money Experts Share the Best Way to Invest $1,000
Jared Leto
Oscar-winning actor Jared Leto has an eye for compelling roles and promising tech startups. You might not know it, but Leto has been quietly investing in tech for the last 12 years and carries the distinction of being an early investor in Uber, Airbnb, Nest and 50 or so other early-stage tech startups. During an interview with CNBC, Leto reflected on his investment strategy and considered his style as “incredibly proactive, really aggressive.”
Unlike Kutcher, who is famous for his investments, Leto’s financial endeavors haven’t garnered as much public attention, which could very well be intentional. Many of the most successful investors out there are often the most modest. They practice what’s called “stealth wealth.” Rather than showing off their money with fancy cars or a Rolex, they keep a low profile in part to avoid squandering their fortunes. Take a page out of Leto’s book and let your success be yours, and not something the whole world needs to know about.
Ryan Seacrest
Ryan Seacrest is one of the hardest-working guys in show business with gigs on radio and TV. Apart from being a master multitasker, Seacrest is responsible for bringing the world runaway hits like E!’s “Keeping Up with the Kardashians” and Bravo’s “Shahs of Sunset.” Seacrest also has his sights on tech ventures like Pinterest, FlightCar and DigiTour Media, according to The Hollywood Reporter. Additionally, he’s invested an undisclosed amount of money into the meditation app Headspace, according to Crunchbase.
The takeaway? Don’t be complacent. You’ll never grow your wealth if you’re sitting around waiting for it to happen. Do like Seacrest and hustle like it’s your job.
Click through to find out what Mark Cuban says you should do with your money.
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Laira Martin contributed to the reporting for this article.
This article originally appeared on GOBankingRates.com: What You Can Learn from These Rich and Famous Investors
