Barbara Corcoran reveals the first time she ever felt 'financially successful' — here's what she did with the money and how you can copy her blueprint
Entrepreneur Barbara Corcoran has had an exceptionally successful career.
She’s been in the real estate business for over 40 years, appeared on every season of ABC’s hit TV show “Shark Tank," and is also a bestselling author who wrote columns for the New York Daily News.
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In an interview with CNBC, the 75-year-old revealed that she didn’t feel “financially successful” until the real estate brokerage firm she founded turned a profit. “I made $77,000 running my brokerage firm,” she said. “I had never made a profit. And I thought, ‘What do I do with the money?’ I was so surprised to have the money.”
Here’s what Corcoran did with that money and how you can copy her blueprint.
Risks and gifts
Corcoran said she spent part of her first profit from her company on gifting her parents a new car. “They had never had a new car,” she said. “I could afford to buy many people many things over my lifetime. But nothing has ever equaled that day.”
However, the rest of the money was reinvested in expanding her empire. In another interview with Inc. Africa, she revealed that the remaining funds were used to produce videos of her real estate listings to show potential buyers. Unfortunately, distribution was tougher than she anticipated. “No one wanted to give them out,” she said.
Her husband told her about the internet, which was still new then, and she created a website, uploaded the videos to it, and had two sales that same week. Corcoran greatly expanded her firm’s footprint and sold it to NRT for $66 million in 2001.
Read more: Jeff Bezos and Oprah Winfrey invest in this asset to keep their wealth safe — you may want to do the same in 2024
Reinvesting is extremely important for growth.
Warren Buffett’s Berkshire Hathaway doesn’t pay shareholders dividends because its earnings are kept to be reinvested. In his 2012 letter to shareholders, Buffett explained: “A profitable company can allocate its earnings in various ways (which are not mutually exclusive). A company’s management should first examine reinvestment possibilities offered by its current business – projects to become more efficient, expand territorially, extend and improve product lines or to otherwise widen the economic moat separating the company from its competitors.”
Jeff Bezos was similarly focused on reinvestments. “We are a famously unprofitable company,” he told Jay Leno in 1999. “And we are investing in the future, which isn’t unusual.” Amazon’s aggressive reinvestments into growth and innovation have turned it into a $1.9 trillion tech conglomerate.
It seems reinvesting capital for growth is the key to success for many of the most famous entrepreneurs we see today. Here’s how you can use some of this reinvesting magic in your portfolio too.
Dividend reinvestments
For retail investors there is a way to apply the same philosophy to their portfolio. A dividend reinvestment plan (DRIP) allows you to automatically reinvest all the dividends you earn from a stock back into the company. Experts recommend using DRIPs with blue-chip stocks to build wealth.
Some brokerages and money managers offer similar programs for mutual funds and exchange-traded funds too.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
