6 money lessons we could all learn from Dwayne "The Rock" Johnson
Whatever Dwayne "The Rock" Johnson is cooking, you better get a hold of his recipe for success! According to Forbes' list of the world's highest-paid celebrities, Johnson earned a cool $64.5 million in 2016, more than double of what he earned the previous year ($31.5 million).
He came from very humble beginnings, hustled his way through professional wrestling, and developed a successful career in the entertainment industry. The Rock never took himself too seriously (remember his role as thug Elliot on Be Cool?), and is still quite humble. Here are the six money lessons we could all learn from Dwayne "The Rock" Johnson.
Don't Put All Your Eggs in One Basket
This is one of the most well-known investing maxims. Johnson is a true believer on this mantra and he has diversified his sources of income, including wrestling, acting, and producing a number of reality shows and the HBO series Ballers. While the bulk of his net worth (estimated to be somewhere between $150 million and $190 million) comes from his movie roles, Johnson still applies the don't-put-all-your-eggs-in-one-basket concept by working in more roles than his fellow actors.
And this strategy has rewarded him handsomely. In 2013, actor Robert Downey Jr. was the king of the box office for his role as Tony Stark in the film Iron Man 3, which earned $1.2 billion worldwide. However, The Rock was able to earn $100 million more than Downey Jr. by working in more movie roles. While Downey Jr. only worked on Iron Man 3, Johnson worked on four movies, including Fast & Furious 6 and G.I. Joe: Retaliation. "Success isn't always about greatness. It's about consistency. Consistent hard work leads to success. Greatness will come," says Johnson.
RELATED: The net worth of "Friends" cast members:
Money Lesson #1: Get a Side Gig/strong>
"I never wanted to stay in one genre; I never wanted to be pigeonholed or defined as the actor who only worked in one genre," claims Johnson. Just like him, capitalize on your other talents and participate in the "gig economy" to get some extra cash on top of your regular salary. From driving with Uber to online tutoring to assembling furniture, you have a wide range of options to choose from. Who knows, if you're able to make more for doing what you truly love, you might even be able to bid goodbye to the good old 9-to-5 and long commute! (See also: 13 Ways to Make Money Online That Aren't Scams)
Money Lesson #2: Diversify Your Investments
Like Johnson, generate multiples streams of income to hedge against the risk of one of them drying up. By using different kinds of investments, you'll achieve, on average, higher returns and lower risk than any individual investment found within the portfolio. While socking away in a savings account is a source of guaranteed income, it'll never allow you to reach your financial goals. So, you need to invest in stocks. Still, don't put all of it on stocks: Experts suggest young savers allocate 10% to bonds and 90% to stocks.
Set Up Sources of Passive Income
While Johnson is able to command up to $20 million for a movie role, his most impressive source of income is his bonus and royalty contract with the World Wresting Entertainment (WWE). In 2016, wrestler John Cena is without a doubt the star of the WWE, with a star caliber $2.75 million five-year contract, including 7% on merchandise sales and hefty share of Pay-Per-View earnings.
However, Cena has to make extensive appearances and really work for that paycheck. On the other hand, Johnson has a $3.5 million contract that only requires him to appear on selected WWE dates and earns a 7% bonus for high merchandise sales. Between 2014 and 2015, he only appeared a handful of times at WWE events. Show up, raise an eyebrow, drop a "People's Elbow," and get paid a couple hundred thousand dollars (before bonuses!). Not a bad deal, at all.
Money Lesson #3: Negotiate More Than Just Salary
Like The Rock, don't just focus on salary when negotiating your employment contract. Think about other ways that you can get paid extra for the same amount of work. Some examples to consider are:
- A bump in your employee match to your retirement account;
- A subsidy to your commuting expenses;
- A reduction in your health plan monthly fees;
- A refund on professional fees or certifications; or
- A bonus in company shares.
Money Lesson #4: Consider Income-Focused Investments
While The Rock isn't sure whether or not he'll be able to secure $20 million for his next acting role for the big screen, he can always count on that $3.5 million paycheck from the WWE. Having a secure stream of income is key for better budgeting. It's great to invest your money in equities, but it's even better to have a portion in stocks that pay dividends on a regular basis. Whether you're closer to retirement and need to focus on income, or just need to stabilize your portfolio, look for dividend stocks or low-fee mutual funds focusing on income.
Protect the Engine That Powers You
From being evicted from his home during his childhood to having several run-ins with the law during his adolescence, to only having seven bucks to his name at the end of his football career, Johnson admits that he has had a messy life. So, how was he able to turn things around and achieve success? Johnson admits that the best advice he ever got was "Around every corner always protect the engine that powers you."
For Johnson, his support team consists of his mom Ata Johnson, his girlfriend Lauren Hashian, his ex-wife Dany Garcia, and his ex-wife's husband Dave Rienzi. While the first two make perfect sense, the latter two could leave you scratching your head. Turns out that Johnson and Garcia are co-founders of 7 Bucks Productions (named after the $7 that Johnson had left after his football career, the company is in charge of managing his projects) and Rienzi is Johnson's conditioning and strength coach. "I'm happy to say we're all together working nicely, but it took a lot of work. With Danny, it was going through the sludge of divorce and then having the clarity to say, 'We're still friends, we respect each other, let's do business. And let's do big business,'" says Johnson about his support team.
RELATED: The top motivational books you should read on Amazon:
Money Lesson #5: Buy Life Insurance
When you're the main breadwinner of your household like Johnson, you have to establish a rock-solid plan in case you pass away or are no longer able to provide for your loved ones. Nobody likes to think about their own mortality but you need to realize that right now is when your life insurance is at its cheapest. If you're covering the biggest portion or all of the monthly mortgage payment, who will cover those monies in your absence? Are you comfortable with the idea that your retired parents or that your children have to take over a debt? That's why you need to protect the "engine" that powers you.
Money Lesson #6: Listen to More Professionals
From executing a will to preparing the taxes of your small business to pulling out a tree, there are many times that you're better off hiring a professional. Not only will you get the job done right, but you'll also — and more importantly — prevent any financial damage. Just like in the case of The Rock, you'll have to cede control to somebody who you may not necessarily be too happy with but does an outstanding job, anyway. Two places that you can start with are your investment account and your retirement account. Depending on your accounts, you may already be paying or have access to a financial professional. (See also: Who to Hire: A Financial Planner or a Financial Adviser?)