How is it that professional basketball star Vin Baker, earned $100 million during his 13 NBA seasons, PLUS is a 4-time NBA all-star and Olympic gold medal winner, became so broke that he took a job as a Starbucks manager for a while? How does someone blow through $100 million in a few short years?
AND… how is it that Michael Jackson, who has been dead for almost a decade, is still making more than $400 million a year? In fact, despite the fact he is no longer alive, he earned more than Beyoncé’s, Lady Gaga’s, Madonna’s, and Jay-Z’s combined $275 million in a single year.
How is it that Vin Baker who went to college, got good grades, worked hard, became an all-star professional athlete and Olympian, struggled to make more money? How is it that Michael Jackson only graduated from high school and became so wealthy that he earned $1.1 billion during his career and $2.1 billion after his death?
Both Jackson and Baker were hardworking, intelligent role models that were iconic in their fields… and yet Jackson, with less education, is still creating wealth from the grave. How is that possible? The answer will surprise you!
Jackson knew how to create wealth. Baker knew how to make money.
It wasn’t that Jackson had more talent than Vin Baker They were both extremely talented. The secret difference is that Jackson learned how to create wealth. He didn’t just make more money. He didn’t just build a career. He didn’t just have passive income streams. He built real wealth overtime.
This is the key difference most people believe they understand, but usually don’t. That’s why most people keep trying to learn how to make more money. This is the issue for most people in the world. We are only taught how to make money. We go to college to get a degree that infers on us a money-making skill set and the ability to get a job, so we can make more money. This is the first step to becoming wealthy; most people treat it like it IS the step into wealth.
The masses most often are guided into learning how to make more money and save for retirement, but not how to create true wealth. In fact, “how to make more money” is one of the number one searches on the internet. Often times we don’t understand that making more money isn’t the solution. The solution is how we use the money we make.
It’s also how we use our skill sets and talents. This was the secret of Michael Jackson’s underrated business acumen. Everyone was focused on his talent and his money. However Michael Jackson created an empire with the money he earned by purchasing and creating long-term wealth components.
What’s interesting with Michael Jackson’s earnings is that most of what he created had nothing to do with his own music or his own talent. He understood that just building his career and making more money wasn’t the solution to creating long-term wealth.
In this Smart Story, we are going to explore how Jackson built wealth. We will share some components of his wealth creation and how you can begin now. We will share 3 keys to creating strong income structures that will allow you to grow wealth and see the way Michael Jackson utilized the same system that you can use.
Most of the time, people talk about Michael Jackson’s legendary spending habits because he would easily spend $10,000 a night for a hotel stay or go on shopping sprees after-hours in retail stores where he would spend millions.
Because the media loved to focus on Jackson’s talent and lifestyle, but not his brilliance as a business man, we missed out on what he actually did to create wealth. So, let’s look at one of the most controversial ways he created long-term wealth…
In 1985, Jackson shelled out $47 million to buy a publishing catalog that included 250 Beatles songs. Ten years later, Sony paid Jackson $90 million for just half of the rights forming a joint venture called Sony/ATV. The portfolio of songs included big names in the music industry. Bob Dylan and Elvis Presley, as well as Eminem, were part of his portfolio.
At the time, the portfolio was valued at approximately $1.5 billion, based on its yearly earnings of between $50 to $100 million per year. That was an increase of approximately 3,000% per year without him having to release any new material himself! Owning this asset meant it did better than owning a return of 1990 Class-A shares from Warren Buffett’s company, Berkshire Hathaway. That only produced a return of just over 1,600% that year.
Jackson purchased assets. He didn’t create passive income. He purchased or created assets. THAT is the big difference.
The next thing Michael Jackson had that helped him build wealth was to have the best advisors around him. Jackson’s attorney specialized in the entertainment industry and negotiated several lucrative deals for Jackson. He had top music producer Quincy Jones, work on the thriller album.
Jackson hired the best advisors in each industry he could. He had billionaire advisors David Geffen and Ron Burkle help him keep his portfolio and stake at Sony/ATV. This protected Jackson even when he was having financial issues in the 2000s. Publishing is one of the best ways to create long-term wealth. If you look at publishing in all its forms, you can see that whether it is music, movies, videos, or books, growing a catalog of wealth is a smart business move. It also made Michael Jackson the highest-paid dead celebrity.
In 1987, Jackson purchased the Neverland Ranch for $20 million. It grew in value to over $90 million. Even after he added $35 million worth of improvements, he still made a profit. But let’s not overlook Jackson’s relentless hard work. It’s something that grows over time, not overnight. There’s no “get rich quick scheme”, shortcut, or fast track to wealth.
There is a big difference between being rich and being wealthy.
Being rich is learning to make more money. Being wealthy is understanding assets, how they grow, and how they can benefit you.
Let’s look at another sports icon, Michael Jordan. How did Michael Jordan become a billionaire while Vin Baker went broke? Both were iconic basketball stars, as well as Olympic Gold Medal winners. Although Jordan is considered an all-time great, he earned less in basketball than Vin Baker did. Jordan’s career spanned 15 seasons, during which he made approximately $90 million. Vin Baker played 13 seasons and received $100 Million. So how did Jordan become so wealthy?
Jordan’s biggest earnings came from endorsements and investments. He had endorsements with companies like Hanes and Gatorade, as well as a brand subsidiary of Nike. More than $100 million per year in endorsement income allowed Jordan to make other asset investments, including a minority stake in the Charlotte Hornets. These combined actions are what placed Michael Jordan’s net worth at over $1 billion.
In the case of Jackson and Jordan, they understood the power of assets. They didn’t make risky investments. Instead, they purchased assets that would build long-term wealth. The secret was they moved themselves from short-term riches to long-term wealth.
Here Are Three Things You Can Do To Begin Creating Wealth:
- Stop Procrastinating: Building wealth begins now. Wealth happens over time, not overnight. You must look at the long game when building wealth because wealth isn’t a place you arrive at. It is a mindset and acumen you have about how you grow, utilize, and create flows of income.
There are no shortcuts and you have a better time at becoming generationally wealthy when you start young. However, the truth is you can start at any age and still leave a legacy. Once you begin, it grows over time.
- Passive Income Lies: Passive income streams are monthly income development, not asset development. It is one of the biggest time sucks ever. Most people create volatility income flows. This means the income structures go up and down at the whim of the economy. When it’s up, your income is up and when it’s down so is your income.
For example, an oil well portfolio is a passive income source. However, it goes up and down based on the price of oil. It isn’t a reliable source of income, especially since we are moving into renewable sources of energy. The price fluctuation means you have no way of knowing what your monthly income can be.
Don’t get stuck in this lie.
- Learn about building and growing assets: One of the best ways to become wealthy is study what wealth is, and how to grow and protect it. Building your career is simply one way to create money. This is important, but then take the money, like Jackson and Jordan did, and turn it into wealth.
Vickie Helm is a bestselling author, business and asset strategist, and the CEO of Smart Group Firm. She has improved the success of more than a thousand companies and the lives of thousands of individuals throughout her career. You can learn more about Vickie at https://thesmartlifeclub.com or https://vickiehelm.com.