Not many are aware that the Hollywood star and former professional bodybuilder Arnold Alois Schwarzenegger first achieved financial stability not from the fascinating movie business but from investing in the much less spectacular real estate business. In fact, he was already a wealthy man before he made it big in the cinema.
Arnold, who besides his acting in many Hollywood action films was also the 38th Governor of California from 2003 to 2011 and won the Mr. Olympia title seven times, was born in a village in Austria named Thal, on 30th July 1947. He is regarded as one of the greatest bodybuilders. From a young age, he nurtured the dreams of becoming a champion bodybuilder, a movie star, and achieving financial independence through real estate.
Having such lofty dreams was not unique, millions had or have them, but what is spectacular is that Arnold achieved each one of those dreams, whose translation into reality are challenging to say the least.
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Savvy Vision
In one of his interviews, Arnold said that “Early on, I did not rely on my movie career to make a living. That was my intention, because I saw over the years, the people that worked out in the gym and the people that I met in the acting classes, they were all very vulnerable because they didn’t have any money, and they had to take anything that was offered to them because that was their living. I wanted to avoid getting into that kind of situation. I figured if I made wise choices in real estate and carefully saved the modest earnings I made from bodybuilding, seminars, and selling my courses, I could eventually save enough to invest in properties. I realised in the 70s that the inflation rate was very high and therefore an investment like that is unbeatable.”
From this smart quote of his, people in the real estate business or thinking of entering the real estate business can get the idea of the business savvy mind of Arnold. Like Arnold, they too should invest in real estate while taking into account of the state of the economy on which they are investing on.
Begin Modestly and Research
One of the important lessons that a person thinking of investing in real estate can learn from Arnold is to start modestly and not go ambitious before having a thorough knowledge of the market. Arnold began his journey in real estate by purchasing a small apartment building in the 1970s that afforded him stable rental income early on. However, he didn’t remain satisfied with that and continued to wisely invest the huge amounts of money that he earned from movies wisely, in real estate assets.
From Arnold, investors in real estate should imbibe the habit of thoroughly researching before investing. Before purchasing his first rental property he studied the market and newspaper for months to get all the possible relevant information for the investment.
Holding on to Investment
He also made the smart decision of holding apartment buildings purchased decades ago, which are giving him huge rental income. People investing in real estate should get inspired by Arnold to invest and hold on to those buildings which streams a lucrative rental income over the years, instead of selling them for quick but one time profit. From Arnold people thinking of investing in real estate can learn to use real estate to earn a steady and lucrative source of income, perhaps even for a lifetime.
From Arnold Schwarzenegger, real estate players can also learn the art of patience and not resort to flipping properties in a volatile market. A write-up dated November 2023 informed that commercial buildings purchased by Arnold early on in his journey in real estate business were still owned by him, which had now skyrocketed in value due to long-term market appreciation.
Diversify to Grow
From Arnold, players in the real estate business or thinking of entering the real estate business can learn to not keep all their eggs in one basket and go for a diversified portfolio of investments.
For example, his real estate investments varied from investing in Planet Hollywood, a themed restaurant chain inspired by the popular portrayal of Hollywood, to a shopping mall named Easton Town Center to apartments.
The Right Mentor
People thinking of entering the highly competitive real estate business can learn from Arnold to get the right mentor. This can help a new entrant to this business from avoiding costly mistakes. In the early days of his real estate journey, Arnold learned the ropes of the real estate business from a successful real estate investor.
In fact, from Emerging Real Estate Digest we can come to know that in the early 1970s, Arnold was pushed by his mentor Joe Weider and an old lady to purchase real estate to combat the rampant inflation of the 70s in the US, which averaged out at 7.25 percent in the US, in that decade. He followed the advice and bought a 6-unit apartment building, moved into one unit, and rented out the rest.
The 6-unit property in Santa Monica was bought for $235,000 and sold three years later for twice that amount. From Arnold, real estate investors can develop the knack of heeding to the right advise to make it big in the real estate business.
