The Terminator earned half a billion at the box office but even more from early bets on everything from California real estate to a now $718 billion investment firm.
From the very beginning, Schwarzenegger put his cash to work. Soon after arriving in California in 1968, he used his bodybuilding, along with extra income from his side hustles – laying bricks with friend and fellow bodybuilder Franco Columbo, and a mail-order business selling fitness pamphlets – to start buying up apartment buildings in Santa Monica. Thanks to these early real estate bets, Schwarzenegger claims he was a millionaire before getting any major movie roles in the 1970s.
Now at 76, Schwarzenneger is worth an estimated $1 billion.
0:00 Introduction
0:22 Schwarzenneger's Humble Beginnings
1:26 Schwarzenneger Acting Career Fortune
4:00 How Else Did Schwarzenneger Make His Fortune?
6:04 Schwarzenneger's Ohio Mall
7:15 Schwarzenneger's Misses
9:35 Schwarzenneger And Donald Trump
11:16 Schwarzenneger In Politics
12:15 What Kind Of Investor Is Schwarzenneger?
14:54 What's Next For Schwarzenneger?
Read the full story on Forbes: https://www.forbes.com/sites/jemimamcevoy/2024/05/30/how-arnold-schwarzenegger-became-a-billionaire/?sh=41df6e6b74fb
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From the very beginning, Schwarzenegger put his cash to work. Soon after arriving in California in 1968, he used his bodybuilding, along with extra income from his side hustles – laying bricks with friend and fellow bodybuilder Franco Columbo, and a mail-order business selling fitness pamphlets – to start buying up apartment buildings in Santa Monica. Thanks to these early real estate bets, Schwarzenegger claims he was a millionaire before getting any major movie roles in the 1970s.
Now at 76, Schwarzenneger is worth an estimated $1 billion.
0:00 Introduction
0:22 Schwarzenneger's Humble Beginnings
1:26 Schwarzenneger Acting Career Fortune
4:00 How Else Did Schwarzenneger Make His Fortune?
6:04 Schwarzenneger's Ohio Mall
7:15 Schwarzenneger's Misses
9:35 Schwarzenneger And Donald Trump
11:16 Schwarzenneger In Politics
12:15 What Kind Of Investor Is Schwarzenneger?
14:54 What's Next For Schwarzenneger?
Read the full story on Forbes: https://www.forbes.com/sites/jemimamcevoy/2024/05/30/how-arnold-schwarzenegger-became-a-billionaire/?sh=41df6e6b74fb
Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1
Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript
Stay Connected
Forbes newsletters: https://newsletters.editorial.forbes.com
Forbes on Facebook: http://fb.com/forbes
Forbes Video on Twitter: http://www.twitter.com/forbes
Forbes Video on Instagram: http://instagram.com/forbes
More From Forbes: http://forbes.com
Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.
Category
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LifestyleTranscript
00:00The Terminator earned half a billion dollars at the box office but even more
00:04from early bets on everything from California real estate to now a 718
00:08billion dollar investment firm.
00:12Hi everybody I'm Brittany Lewis a reporter here at Forbes. Joining me now
00:16is my Forbes colleague Jemima McAvoy. Jemima thanks for coming on in. Thanks
00:21for having me. Forbes has some interesting news to report. You're
00:25reporting that Arnold Schwarzenegger is a billionaire. We all know who the actor
00:30Arnold Schwarzenegger is but he comes from very humble beginnings. Tell us
00:34about them. Yes I'm not sure if a lot of people know Arnold Schwarzenegger's
00:39background but he's from Austria obviously. He's from a small town called
00:44Tal which has a population today of about 2,500 people but back when he was
00:48born there he's 76 years old so 76 years ago it was a lot smaller just a few
00:55hundred people. He you know explains his background was very you know they
01:01didn't have a lot growing up but he obviously made a name for himself first
01:05in bodybuilding and then in acting and then probably a lesser-known part of his
01:11legacy is as an investor. He's been a very aggressive investor over the years
01:15and has turned his celebrity into a fortune. And the investor side of him is
01:20what helped him propel over the line of billionaire and we will get to that in
01:24a moment but first what most people know Arnold Schwarzenegger as is the
01:28actor so take us to the beginning of his acting career and then walk us through a
01:32turning point for him which was the comedy Twins and how he leveraged that
01:38to make a decent chunk of change. Sure so Arnold moved to the US in I think 1968
01:44and he got his first acting role in 1970 in Hercules in New York. It was a pretty
01:51small film didn't end up doing very well but it was his you know bridge into
01:56acting and the interesting thing about Arnold is that he was a millionaire
02:00before he ever even took a big role in a film so this meant that he was and this
02:06was from investing his money from bodybuilding and some side hustles into
02:10real estate in California so he managed to make a million dollars and this gave
02:13him a financial freedom that meant that he didn't have to take the first acting
02:17role that came across his plate so instead of taking you know like side
02:21characters he held out for you know the big role which was a pretty interesting
02:27thing to do considering the fact that when he moved to the US you know here's
02:31a guy with a thick Austrian accent a lot of people didn't want to take him for
02:35their movies they didn't want to be his agent so he really had to fight for this
02:38but he did end up getting his breakout role in Terminator in the 70s and he was
02:44paid about $750,000 for that role which you know was a huge blockbuster but as
02:50you mentioned Twins was really a big moment for him in the 1990s he stars in
02:55this buddy comedy with Danny DeVito and he had only done action movies up until
03:01this point and he'd been making a lot of money doing them he'd been getting 20
03:05even 25 30 million for movies in the 90s but he decides he doesn't just want to
03:12be you know cast as this action hero who can't do anything else so he pitches
03:18the studios with Danny DeVito of a comedy and they're hesitant to make it
03:24because they just want to make another action movie so what he does is he says
03:27okay I won't take a salary instead I'll take a portion of you know the sales of
03:32how the movie does so they come to this agreement where he's gonna get just
03:36under 20% of all of the back end so that means like any DVD sales any kind of
03:42money that the film makes and this ends up being you know his biggest financial
03:46success as a film he makes over 35 million dollars from it so it kind of
03:51just shows how he was very early to invest these I mean early to negotiate
03:56these smart profit-sharing deals ended up making him a fortune in Hollywood how
04:00he made his money from Twins was a gamble but that seems to be a theme in
04:04Arnold Schwarzenegger's life especially when it comes to investing you mentioned
04:08he's an aggressive investor he's not risk-averse he's been in nearly 50
04:13movies but what else contributed to that fortune yeah definitely so you know the
04:17big foundation of his fortune comes from films so as you said he made 50 movies
04:23they grossed 5.5 billion dollars at the box office and he took home after taxes
04:28and fees and everything about 200 million dollars and instead of sitting
04:32on that spending it like a lot of you know Hollywood people do he made some
04:37pretty big and out there investments and some of them paid off and some of them
04:42didn't he invested a lot in commercial real estate in Los Angeles in Santa
04:47Monica specifically so he started up by buying apartment buildings and then he
04:52would sell it you know a few years later for double the price and ended up owning
04:56a significant amount of real estate and then he branched into office buildings
04:59and commercial properties too and these are you know multi-million dollar
05:03properties that he was buying and flipping and so he became a pretty
05:06significant landlord outside of that he was also pretty active and forward
05:11thinking and investing in the stock market so he was a relatively early
05:15investor in Starbucks he participated in the series a round of Google but then
05:22his biggest investment at least that I was able to find is he owned he bought
05:28less than five just under five percent of dimensional fund advisors which was
05:32a at the time when he invested in the 1990s was like a pretty small investment
05:37firm it's ballooned to it's about sixty sixty times the size of what it was when
05:43he invested it's now seven hundred plus seven hundred billion dollars in assets
05:47under management and so his investment has grown by you know roughly sixty
05:52times and that's worth nearly five hundred million dollars today so you
05:57know he took some early gambles on small companies or companies that were up and
06:01coming and these turned out to be really successful. I want to get back to
06:05his real estate portfolio you mentioned he has places in Santa Monica in
06:09California I want to go across the country to Ohio a bit and talk about the
06:14Easton Mall and why that connection is so relevant today. Yeah so a little known
06:20thing about Arnold Schwarzenegger is he does own a stake in Easton Mall which is
06:24a mall outside of just outside of Columbus that was started by Les Wexner
06:29the former owner of Victoria's Secret and L Brands which was a big retail
06:34conglomerate so Les Wexner had a bit of a fall from grace or a significant fall
06:39from grace when he was caught up in the scandal around Jeffrey Epstein he was
06:44Jeffrey Epstein's a big financial backer and he so he started this mall and
06:50Arnold was a early investor and has continued to invest so it's not clear if
06:56it's not clear if Les Wexner still owns a stake in the mall but it was his
07:01project and so at some point Arnold did credit Les as a as a mentor slash
07:07teacher of his so we know that they had a close connection at some point but
07:11it's unclear if that still exists today. You mentioned some gambles that did pay
07:17off for Arnold Schwarzenegger but not everything has always been rosy for him
07:21financially can you walk us through those times especially the failure of a
07:26Planet Hollywood as well as his divorce from Rhea Shriver. Yeah so I'm sure some
07:31people will remember Planet Hollywood it was a restaurant chain like Hollywood
07:36themed that was started by the same guy behind the Hard Rock Cafe and so they
07:42got a bunch of actors including Arnold and Sylvester Stallone and Bruce Willis
07:47to invest in this chain it went public in the early 90s I think 1991 at a
07:54three billion dollar valuation so it was a pretty hot IPO back at the time and
07:58then just a few years later it went bankrupt it was kind of a bit of a
08:02financial disaster a lot of people lost a lot of money a lot of investors did
08:07and actors did but Arnold was actually smart and took two years to negotiate
08:13his ownership stake which meant that he actually came out without losing any
08:18money and did make money according to his financial advisor so another big
08:23splashy investment that he made was he bought an $130 million Boeing commercial
08:30jet which he then rented back to or leased back to Singapore Airlines and so
08:35this was a big investment at the time everybody was talking about you know
08:39this crazy 130 million dollar purchase and it didn't end up doing as well as
08:44they had anticipated but he didn't lose money on it so those are a couple of
08:48things but you know as you mentioned the divorce from Maria Shriver who is a
08:53Kennedy heir and a former newscaster that is probably his most costly mistake
09:00if you will we we don't know the arrangements that he had with her
09:06whether they had a prenup or not it's not public so we did our math assuming
09:11that they didn't have a prenup so we took away 50% of his assets when they
09:17divorced in 2021 and so he could be worth double the amount that we put him
09:23at which is a billion today if he hadn't been through the divorce so that is
09:27probably on the list of you know investments that didn't go right that's
09:32the top of it Arnold Schwarzenegger was also mentioned
09:35recently in Donald Trump's New York City hush money trial can you elaborate on
09:40that for us yeah absolutely so David Pecker the the former publisher of the
09:45National Enquirer was a key witness in Trump's trial and he was testifying
09:49about you know paying for and killing stories from women about Trump and it
09:55also came up that he was doing the same thing for Arnold Schwarzenegger when he
09:59was running for governor in 2003 so David Pecker testified that he made an
10:06agreement with Arnold where he would basically buy stories from women that
10:12were coming forward to him with allegations of affairs or sexual
10:16harassment even and then he would buy the stories from the women and then
10:20quote kill them which means like pay for the story and then you make sure it
10:24doesn't go anywhere and he testified at trial that he did that was either
10:29somewhere between 30 and 40 women so we knew that in the past he had faced
10:36allegations of sexual misconduct the LA Times had this big blockbuster report
10:43from when Arnold was running for governor where they outlined over a
10:47dozen allegations from women of groping and harassment and Arnold at the time
10:53denied them but he since admitted he's admitted wrongdoing and said and
10:59apologized for those allegations but this was new at the trial because just
11:03of the scale that David Pecker outlined of 30 to 40 women is a lot higher than
11:08you know what was previously reported so that did bring him back in the headlines
11:11and his representatives didn't respond to requests for comment there for me I
11:16do want to talk about that foray into politics 20 years ago how did that
11:21affect his fortune if it did in any way yeah so Arnold famously did not take any
11:27salary when he was governor of California and you know one of the
11:31reasons for that was he was so wealthy already but he did forgo he's estimated
11:36around 200 million dollars worth of movie paychecks when he was governor you
11:42know he was turning out two films a year and taking home 20 million plus for each
11:47film so over his two terms in office that equates to about 200 million and he
11:55also wasn't able to play an active role in managing his investments so all of
11:59his investments had to go into a blind trust that was managed by his investment
12:03advisor so for about eight years he wasn't you know actively bringing in new
12:09income but he was still generating income off of his previous investments
12:13and some like small roles that he played so and can you talk about a moment that
12:17you mentioned in your story when he was sitting I believe at a basketball game
12:21and was talking to his financial advisor what did he indicate that he do yeah so
12:27I did speak with his financial advisor for the story and he was kind of
12:32outlining to me what type of investor Arnold is and how he is so he likes
12:38taking a risk and this was during the financial crisis and so they weren't
12:42allowed to talk about his investments as part of the his governorship and the
12:48blind trust but he says they were at a Lakers game and I think 2009 and Arnold
12:55turned to him and was like you better not be selling right now and he said
12:59that that's you know all his other clients were panicking during the
13:02financial crisis and telling him to offload assets but Arnold knew that this
13:06was just a dip and things would come back up and so he thought that that was
13:11a pretty good example of you know this guy being very smart when it comes to
13:15investing and not afraid of risk at all aside from his financial advisor who
13:23did you speak to and what did you learn about who Arnold Schwarzenegger is yeah
13:28so unfortunately Arnold would not speak with me for the story I think generally
13:32he kind of shies away from talking about wealth slash financial matters but I did
13:38speak to his his longtime financial advisor Paul Wachter who is the founder
13:44of Main Street Advisors which is a celebrity advisory firm that was founded
13:49basically because he was advising Arnold and realized that there was a
13:52market for more celebrity clients but so Paul knows him very well was gave me a
13:58lot of you know background on his investments and then also spoke to his
14:02chief of staff who is also a longtime employee of Arnold who's worked with him
14:08since his days as governor and then his former press secretary from when he was
14:13governor so I really wanted to speak with people that you know have worked
14:17with him a long time and know him and could kind of get into his brain a
14:21little bit and tell me how he managed to you know become so successful in
14:26investing and then finally I spoke with the head of the Schwarzenegger Institute
14:31which many people might not know this but in in the year after he left his
14:38position as governor in 2011 I think he arranged for a 20 million dollar
14:43donation to USC to start the Schwarzenegger Institute which is a
14:47public policy think-tank he's still involved today so I spoke to the head of
14:51that about his involvement there something interesting an interesting
14:55anecdote you included in the story is that I believe that during his time as
14:59governor no one was allowed to use the word tired around him it was referred to
15:04as the T word I'm wondering if now in his mid-70s if he's still on the go on
15:09the go not slowing down not using the word tired what does a typical day in
15:14Arnold Schwarzenegger's life look like yeah so I'm not sure if the word tired
15:18is still banned but he does seem to be as active as ever you know according to
15:23his chief of staff he's up at around 5 every morning to feed his animals he
15:29lives and has a donkey and a pig and a bunch of other farm animals on his house
15:35so then he is working all day you know he's like shooting movies he's running
15:40his Institute his charity so even though he was fitted with a pacemaker earlier
15:45this year he is as busy as ever according to his chief of staff so I
15:50think that's also another key reason that he's managed to be so successful
15:55you know there's only 14 other celebrities that we have on our
15:59billionaires list of you know 2,500 plus billionaires around the world only 15
16:05celebrities 14 celebrities in the u.s. have managed to do this so it's not
16:09easy and a big part of that seems to be his work ethic his acting career alone
16:15didn't get him on the Forbes billionaires list his investments played
16:18a huge part in that as you said so is there any indication that his
16:22investments will keep him there I it seems at this point that he he should
16:28stay on the list unless there's a big you know economic downturn and his
16:32investments don't perform well then he could potentially dip off but if
16:36anything he's been it's been his fortune has been growing a lot as far as we can
16:41tell so I wouldn't expect him to drop off anytime soon unless there's some
16:47other big you know thing that we can't predict coming up but yeah I think he'll
16:53he'll be on there for the foreseeable future
16:55Jemima McAvoy thanks for joining me thank you very much for having me
17:02you