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Excerpted from AbcNews.com
Feb 7 – Baseball great Ty Cobb turned a small stake in Coca-Cola into a multimillion-dollar shareholding. TV legend Rod Serling sold rerun rights for The Twilight Zone for a pittance. And Thomas Jefferson amassed a massive debt before he died.
Tales of celebrity fortunes made and lost are found in Money Secrets of the Rich and Famous, a new book by Michael Reynard. Reynard documents the financial lives of 28 famous Americans, from Albert Einstein to Elvis Presley. Money Secrets of the Rich and Famous is unique for its illustrations that include autographed checks of many celebrities.
Reynard joined ABC News for a chat about his book. The transcript follows:
Mark from human-resources.pitt.edu.
Of all the American celebrities you researched, who was the most successful with growing their wealth?
Michael Reynard
John D. Rockefeller has the distinction of being the richest man in the history of America. When you compare the fortunes of extremely wealthy people relative to Gross National Product, Rockefeller would have the equivalent of about $190 billion in today's dollars. The primary threat to Rockefeller's estate was not the breakup of his company, The Standard Oil Trust, but the onerous burden of inheritance taxes. So Rockefeller gave away more than one-third of his estate to charity and philanthropic causes. During his lifetime he also transferred the equivalent of about $104 billion to his son. By using these maneuvers Rockefeller reduced his estate from $900 million to less than $27 million.
Kimberly from tnt19.lax3.da.uu.net.
Who, in your estimation, was the worst manager of his or her money, while maintaining public perception of financial solvency or savvy?
Michael Reynard
The financial story of Ulysses S. Grant is a lesson of how not to handle your investments. Grant invested all of his money in his son's Wall Street firm. When his son's firm went bankrupt, Grant was left penniless. The lesson learned is that all of us need to have diversification in our investments to prevent the failure of a single investment from becoming devastating.
Moderator
What's a good example of a contrarian investor?
After the stock market crash of 1928, while others scrambled to sell their stocks and stockpile their savings, John Paul Getty went shopping on Wall Street, buying stocks, particularly oil company stocks which were selling at all-time lows. Within a few years the stocks recovered and Getty was enriched by millions of dollars.
Moshom
What's the most common thread or trait you found in Money Secrets of the Rich and Famous? Wisdom with money? Saving? Investing? Luck? Eccentric?
One of the common features of the financially successful is that of having a long-term financial strategy. For Ty Cobb, this meant regular investments in the stock market during both bull and bear markets. His regular investments in Coca-Cola made him one of Coca-Cola's largest shareholders with over 24,000 shares. For George Washington it meant accumulation of land during his entire lifetime. At the peal of his land acquisition phase he owned over 60,000 acres in seven states and became one of the single largest landowners in America. So having a long-term financial strategy predicated on financial commons sense may be a very important factor in achieving great wealth.
Moderator
What famous person had a keen financial strategy?
Michael Reynard
The zany and ostensibly naïve housewife of I Love Lucy was in reality a very shrewd and smart investor. Lucy had a large portfolio of stocks and bonds, she co-owned real estate with Frank Sinatra, she owned oil wells in Montana with Marvin Davis, and even had part ownership of a gas station in Flagstaff, Arizona. She was a very well diversified investor and by the time she died, Lucy was considered one of the wealthiest women in Hollywood with an estate worth over $22 million.
Moderator
We're nearly out of time, Michael. Do you have any closing thoughts?
Michael Reynard
My closing thought is that from Money Secrets of the Rich and Famous (Allworth Press www.Allworth.com) we can learn how to better our financial lives from the examples of famous people illustrated in the book. Celebrity checks that are illustrated in the book may also be viewed at www.FamousChecks.com.
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