What investors can learn from Dr Dre and Justin Bieber
- 10 September 2012
Whether music, movie or reality tv stars, or another famous personality – when they're hot, they're hot, and there's big money to be made from their fortunes and stamping their name on anything.
But whatever a celebrity is famous for, you can guarantee that a large proportion don't make the majority of their money from this particular pursuit.
It's their brand that becomes the valuable commodity – so whether they put their name to perfume, make-up or headphones, the big bucks roll in.
Dre managed to pip his peers like Diddy, Jay-Z, Kanye West and Lil Wayne to the post, although they made up the top five on the Forbes list.
However, like Dre, Diddy's annual payday had little to do with album sales or touring revenue. Most of his $45 million came from Diageo's Cîroc vodka, according to the Forbes report.
More than half of Jay-Z's $38 million came from his pieces of the Brooklyn Mets, cosmetics company Carol's Daughter and other ventures.
These guys take chances – but then, they have the cash with which to do so.
Yet their name doesn't always guarantee success.
Seeking out hot investments
Meanwhile, Justin Bieber may only be 18 years old, but he's earned a whopping $108 million over the past two years.
With several quiet tech startup investments – including the success that is Spotify – he is now trying to make similar conquests in Silicon Valley.
Forbes notes: "Bieber's tech savvy infuses more than his music–it's also a core strategy for how the entertainer intends to translate all that fame and fast money into enduring riches.
Bieber embraces a Peter Lynch model of investing –"I'm not going to invest in something I don't like; I have to believe in the product".
He has been quietly plowing millions into private tech startups, says Forbes. Although it's his business manager, Scott Braun, known to all as Scooter, who is the man behind the deals.
He's among the most prominent examples of fame and financial success, when celebrities use their fame to secure stakes in Silicon Valley companies.
An eye for technology and trends
There is a message for investors here, whether opting for business start-ups or putting a name to a brand – and you don't need a humungous bank account to learn from this.
It goes back to Richard Branson's key message: "You fail if you don't try."
"If you try and you fail, yes, you'll have a few articles saying you've failed at something.
"But if you look at the history of American entrepreneurs, one thing I do know about them: An awful lot of them have tried and failed in the past and gone on to great things."
So while most of us don't have pots of cash with which to take risks, sometimes going down this route is the most profitable.
Take risks, and be creative – and limit your fear of failure. After all, do you remember Virgin Cola? I don't think so. Branson's attempt to take on Coke and Pepsi wasn't exactly a success, but a terrible failure.
"The brave may not live forever – but the cautious do not live at all!" adds Branson.
These stars have achieved their fame despite setbacks, and put their faith in success. They are now translating this belief in themselves and their ability to investment aptitude.
So for the average investor, the message is clear when it comes to useful investment tips – be brave, be prepared to go with your gut, and know that if you stumble, all you have to do is get up and try again.
More on Mindful Money
To receive our free daily newsletter sign up here
Mindful money Mortgage Tool Box
Looking To Re-mortgage
How Much Could You Borrow
How Much Is Your Home Worth
Find a Mortgage Advisor
- Retirees who raid pensions will be blocked from state benefits
- Debunked: The top 10 most common pension myths
- US giants Kraft and Heinz to merge and form North America's third largest food and beverage company
- An investor's guide to peer to peer lending
- Gocompare launches current account switching service which pioneers the use of the government’s ‘midata’ initiative
- Private equity group 3G reportedly in $40bn takeover talks with Kraft
- Making the most of low inflation – and where to find today’s best savings deals
- Five tips to avoid the pitfalls of last minute ISA investing
- Rising motoring costs proving a major problem for young jobseekers
- Non-advised annuity and drawdown sales will harm retirees, warns consumer panel