Jul 14, 2017
USA Today: Kate Hudsons’ Fabletics featured in The George Clooney Guide to Getting Rich
Column: The George Clooney Guide To Getting Rich
Tired of toiling for the man? Ready to get rich?
Then be like George Clooney!
No, don’t go into acting. That requires youth, looks and luck and can’t make you megarich. No one ever made the Forbes 400 simply acting. A-listers may earn $20 million a movie but the earned income tax rates, luxury villas, private planes, spa treatments, diamond studded yoga coaches, drug dealers and hangers-on devour it. (Just ask Johnny Depp.)
Like Clooney, all uber-rich celebrities launched businesses. He just made headlines selling the tequila brand he and two buddies started four years ago to Diageo. They get $700 million now plus $300 million over 10 years when their baby, Casamigos, hits sales goals.
Clooney and crew, Mike Meldman and Rande Gerber (aka Mr. Cindy Crawford), did what most of the Forbes rich list’s richest did: start a company. Seven of America’s top 10 billionaires are self-made. They had an idea, made a product, gathered capital, marketed it, worked hard, found the right sidekicks and made mountains of moola.
Oprah Winfrey’s talk show did her proud, but her wealth comes from starting Harpo, her production company. George Lucas’ real moneymaker was Lucasfilm and its ongoing merchandising juggernaut. Stephen Spielberg? His bucks come from Amblin Entertainment and Dreamworks, not director’s fees.
Endless more entertainer crossovers aren’t on the Forbes multibillionaire list, but are multimillionaires. Rapper Dr. Dre could be a billionaire soon, due to his record outfit and a little endeavor called Beats. Killer headphones make more money than killer rhymes. Jessica Alba is on it, too — not for her roles in Fantastic Four and elsewhere but for co-founding The Honest Company, currently valued at $1.7 billion. Kate Hudson’s active-wear brand Fabletics is worth $250 million and growing. Sarah Michelle Gellar’s baking start-up, Foodstirs, is only two years young but is stirring the money pot.
Starting businesses can be intimidating. But it’s easier than you may fear. Ask yourself: What do people want or need — yet not even realize it? What do you want? What product or service could be better? Think of potential customers and talk to them about your ideas. Get them to brainstorm for you. Get their buy-in. Maybe they’ll be ground-floor investors. Then enter “starting a business” on Amazon. Read 10 how-to books on it — it doesn’t matter which ones. You’re smart. You’ll get it. Then jump in. Yes, celebrity entrepreneurs had a leg up via name recognition, but prior fame isn’t necessary. Scan down the Forbes 400 list to see how overwhelmingly true that is.
Still skeptical? OK, entrepreneurship isn’t for everyone. But Clooney has another lesson for you — one he may not even know. His megamillions from Casamigos isn’t Forbes 400 material yet, but he gets there if he invests decently. It’s the magic of compound growth — magic anyone can wield, famous or not. Since 1929, stocks averaged about 10% annually. Suppose they average 6% annually in the future. If George invests a third of a billion from Casamigos now and gets 6% a year investing passively in an S&P 500 index fund, he has $1 billion in 20 years. If he beats the market at 10% a year, he’s there in 12 years.
OK, so you don’t have $330 million to start with. No biggie! Simply maxing out your 401(k) and IRA contributions each year and investing in broad index funds makes you a millionaire quicker than most fathom. A 25-year-old starting now, saving the maximum tax-deferred amount of $23,500 annually, will have more than $6 million by age 60 if stocks match historical averages. Even late starters can invest their way to retirement riches.
So if you haven’t got George Clooney’s looks and talent, never fear. You can still hit it big, by George!
Fisher is the founder and Executive Chairman of Fisher Investments, author of 11 books, four “New York Times” bestsellers and is No. 184 on the current “Forbes 400” list of richest Americans. Follow him on Twitter @KennethLFisher.