Celebrity Investor Success Story
How do celebrities invest their money?
Celebrities do not invest differently just because they are celebrities. No. That’s completely a wrong notion. Apart from being guided by the best financial advisors Los Angeles, using brokerage accounts and stuffs, celebs do have the liberty to invest in a business that’s connected to their passion. They only need to find it to be profitable or at least hope so before taking the investment leap!
The fact is, we can always take examples. Instead of contemplating that those people were just lucky enough to be born that way, we could take a closer look at their struggles. And an even closer look at their investment choices that had indeed contributed to their big fortune.
The story of George Clooney’s investment choices
While celebrity investor blunders are often cited, stars can invest successfully as well. A case in point is movie A-lister George Clooney, who recently sold his tequila company Casamigos to spirits company Diageo for $1 billion. $700 million of that comes up-front, with as much as $300 million available depending on the company’s performance over the 10 years following the sale.
Clooney won’t get all of that, as he had partners: Michale Melmand, a real estate investor, and Rande Gerber, husband to legendary model Cindy Crawford. Still, the actor likely made a pretty penny indeed when taking into account his original investment in the company. The growth of tequila sales worldwide doubtlessly helped to motivate the deal, with tequila presently among the most rapidly-growing spirits around the world. Casamigos shared in that growth, selling 120,000 cases of whiskey last year, mainly in the United States. The company is slated to grow that number substantially this year, with sales of 170,000 or more cases expected.
What investment lessons can be learned from Clooney’s success with Casamigos? While investing in private equity type investments such as this is certainly risky, it seems that Clooney followed a dictum taken from Warren Buffett in doing so: “invest in what you know.” Whatever an investment’s level of risk, if you know a lot about it you are more likely to be able to calculate the risk you are taking.
From all reports, Clooney not only enjoyed drinking tequila but also understood the market for it, therefore one might infer that an investment in a tequila producer was something he would be more comfortable making than an investment in, say, a high-tech computer company. This is not to say you should never invest in things you are not an expert in, or at least very familiar with, just that you should be more cautious than usual when doing so.
Do celebrities invest in stocks?
Quite like the ordinary you and me, celebrities these days, often choose to invest in things like: real estate, bonds and securities, the stock market, and so on.
‘This is one reason why mutual funds and ETFs are so popular with investors, as they allow you to invest in a variety of industries and technologies that offer growth potential, using the power of diversification to reduce risk. If you are investing in a single stock or a private company (like Clooney did with Casamigos), on the other hand, it is more important to know as much as possible about the investment, given the greater risk of such undiversified investments.
The job of a celebrity financial advisor not only involves dealing in colossal amounts of money but also managing the lifestyle and spending habits of these media tycoons.