Acquiring wealth is one thing, but keeping that wealth is another. Here are five things rich celebrities do to stay rich.
1. Investing and saving in tandem.
Saving is all about keeping money tucked away until you’re ready to use it while investing is about strategically putting your money forward in order to gain healthy, long-term financial growth.
Both of these strategies are vital to maintaining wealth because they strike a balance between growth and maintenance, all for the sake of reward.
Actor Ashton Kutcher, known for That 70’s Show and Punk’d, is a good example of building and persevering wealth by breaking into investing.
He made early bets on now wildly successful companies such as Airbnb, Uber, and Spotify, and in 2010, he co-founded a venture capital fund that increased $220 million in value in just 6 years.
As a result of making these strategic investments, Kutcher’s net worth is estimated to have grown by $108 million over the last 10 years.
Becoming an entrepreneur and owning one or more businesses is the dream of millions. And for celebrities, their resources and connections not only make business owning a very feasible reality for them, but it gives them a higher chance of being successful in their chosen industry. Take George Clooney for example.
In 2013, he co-founded Casamigos, a high-end tequila brand, and just 4-years later was able to sell it for $700 million in addition to a further $300 million based on future brand performance.
Similarly, legendary singer Patti Labelle made yet another hit in 2015 when Walmart made $2.3 million in sales in just a single weekend from her $3 sweet potato pies alone.
For celebrities, entrepreneurship is often times the key to introducing a much-needed career rebirth, as well as using their passions and interests to create a wide-open door to additional success and fortune.
3. Creating multiple income channels.
Building multiple streams of income can be anything from investing in mutual funds, creating a profitable blog, or even offering up your home for rent—as long as there is income from multiple places.
No matter what your career may be, having supplemental income outside of your main job is a huge contributor to wealth. Celebrities are perhaps the biggest example of this because they regularly crossover into other industries, ink endorsement, and partnership deals, and serve on boards and panels for various companies.
That’s why you’ll notice so many athletes like Steph Curry usher in deals with athleisure brands like Under Armour for $20 million a year; or why you’ll spot your favorite actress like Gwenyth Paltrow building multi-million dollar lifestyle brands like Goop; or why you just saw comedian Mindy Kaling showing off her cute new clothes from DSW on their latest commercial.
Wealth—especially if you’re trying to build and maintain it—rarely comes from just one source.
4. Wealth management and advisory.
When you really think about it, managing millions of dollars is likely very different than managing a few hundred or thousand dollars a month.
One key difference is that celebrities deal with a lot more uncertainty and instability around the work they do because the constant ebb and flow of the entertainment industry don’t guarantee that their talents and skills will be in demand the same amount next year as they were the last.
In most cases, celebrities will amass a considerable fortune in a relatively short period of time and be expected to stretch it for years to come. Because of this, knowing how to manage their money is crucial.
Financial managers, advisors, and accountants have the role of guiding celebrities in conservative spending, setting boundaries with what and who they can and cannot invest in, as well as teaching them how to not live too far beyond their means.
5. Continually going outside of their comfort zone.
No matter what effort celebrities may take to become and stay rich, they all have one thing in common: they consistently veer from what is familiar and push the envelope.
None of their wealth has been achieved by doing what is comfortable and conventional, so it is fair to assume that it cannot be maintained by playing it safe.
Oprah became the first African American woman to host a nationally syndicated talk show and it led her to launch her own network, writing books, and even being the spokesperson of the partial owner of Weight Watchers.
Author Stephenie Meyer took a risk with writing Twilight and it eventually led to 5 different movies that were instant box office hits.
Whether it’s at the beginning of their career, the middle, or all throughout, celebrities have a keen understanding of the fact that it sometimes takes a seemingly unfathomable risk to achieve the ultimate reward that you seek.