You may think that celebrities have enough money. After all, many get paid millions to act, sing and dance, as well as live a life of luxury: what more could they possibly want?
Well, the fact is that many of them take an active interest in increasing their wealth and look to make smart investments as a result. What’s more, their money also buys them the best financial advice around, so keeping an eye on what your favourite celebs are investing in might turn out to be a clever idea.
Here’s a look at the smart financial decisions some stars have taken, and whether we could learn something from them.
Jessica Alba
Alba is famous for her starring roles in TV’s Dark Angel and the Fantastic Four movies, but not so many people know that she’s a shrewd investor as well.
Her start-up ‘The Honest Company’ broke the $1 billion valuation mark in 2015 after only a few years of trading. Customers are attracted to its range of consumer products that focus on naturally-sourced ingredients, including cosmetics and baby food.
Ironically, The Honest Company has faced legal action over ‘dishonest marketing practices’ but there’s no denying that Alba’s brand has been a huge success.
Takeaway tip: Alba was smart enough to see a growing trend for environmentally-friendly products, and her focus on natural ingredients subscribes to that. Reading the market is a key tool for any investor.
Ashton Kutcher
It’s safe to say that Ashton Kutcher likes to play with money. A regular poker player, there are many photos of him testing his skills at big-name casinos with his pals, and he’s had a fair bit of success. You could say that his poker prowess is a sign of financial wisdom: he chooses to play a casino game in which you can make calculated decisions – unlike in games of chance which favour the house.
Key decision making has served him well in the finance world, too. After setting up venture capital firm A-Grade Investments in 2010, the actor has invested in unicorn companies such as Spotify, Uber and Airbnb. Following three years of trading, A-Grade held a $100 million valuation, and it goes without saying that the three companies mentioned have rocketed in value over the last few years.
Takeaway tip: If you want to know who’ll be the next big thing then it might be worth keeping an eye on A-Grade’s latest investments. Their track record speaks for itself.
Dr. Dre
Dr. Dre knows a good pair of headphones when he sees one. Music has always been his driving force and his search for the perfect accessory led him to co-found the Beats Electronics in 2006.
The headphone company — a combination of Dre’s headphone knowledge and the marketing nous of Jimmy Iovine (his partner) — was a stunning success. Apple bought the enterprise for $3 billion in 2014, netting Dre a cool $500 million for his stake.
Today, the headphones still dominate the market and, with Apple’s eye for technological advancement, it appears that Dre’s creation is going to continue headphone innovation for some time to come.
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Takeaway tip: Knowing the right time to sell is crucial. Beats was a big hit from the start and the Dre partnership could have sold several times previous to the Apple deal. Knowing how long to hold out for netted them an incredible fortune.
Jared Leto
Actor, rock star, investor…is there anything Jared Leto can’t do? Well, yes, he seems unable to make a bad business decision.
The Thirty Seconds to Mars front man counts investment among his passionate hobbies and has helped to fund over 50 super-successful start-ups, such as Uber, Airbnb and Nest Labs – the latter just days before Google acquired it for $3.2 billion in 2014.
You could argue that Leto can afford to pay for financial advice, but the star takes a keen interest in finance and is known to make his own decisions after a lot of research. He also advises other celebrities on their own decisions, so he can add that to his list of skills, too.
Takeaway tip: You might wonder how Leto has the time to do so many things. The key has to be organisation: keeping a well-run schedule is crucial to success and helps to keep a clear mind for big decisions.
Bono
Bono’s U2 had a hit song with Elevation in 2000, and the star’s Elevation venture capital firm has also hit the heights since its formation in 2004.
Facebook and Yelp are just two of the companies the firm has invested in, and they’ve brought huge returns alone, earning Bono millions in the process.
While Elevation is on the backburner these days, Bono continues to look out for up-and-coming projects with his The Rise Fund which looks to achieve social and environmental goals as well as returns on investment.
Takeaway tip: Having a social and environmental outlook often helps business performance. Aside from the obvious moral aspect, it also registers well with the general public. Bono’s personal motivation to help these causes is also a smart business decision.
Kim Kardashian
You can mock Kim Kardashian all you want, and many people do, but there’s no denying that she has a steely eye for business. Name an industry and she probably has a stake in it: mobile apps, cosmetics and books have all been the subject of Kim’s attention in the recent past, and she recently became a billionaire, much to husband Kanye West’s delight.
Among the big sellers from her range are the Kim Kardashian: Hollywood app which made an estimated €160 million in two years, while a simple book of Kim’s selfies sold 125,000 copies.
Takeaway tip: Never judge a book by its cover. Often the shrewdest business operators don’t fit the stereotype, so keep a look out for their business potential rather than whether they wear a suit or not.
