*Magic Johnson’s days as one of the NBA’s most iconic players have nothing on his days after retiring from the league more than 28 years ago.
Analyzing the basketball titan’s status post-pro basketball, Moneywise found that Johnson is now worth an estimated 30 times more than what he made as a player.
Can you say $1.2 billion? That is the sports icon’s estimated net worth, as it stands now, according to Forbes.
So how did Johnson elevate to the rare ground that only Michael, LeBron, and Tiger occupy?
According to Moneywise, the answer lies in a couple of smart business moves that have paid off in spades. Financially speaking, Johnson has come a mighty long way from the $40 million he earned competing in the NBA. Stakes in various sports franchises, direct investments in private companies, and introducing franchise locations to underserved communities are a few of the techniques that guaranteed his future, in addition to developing properties and launching new media brands.
On a deeper level, Johnson secured his fortune by focusing efforts on the demands of multicultural communities.
“I knew there was buying power in the minority communities,” the athlete/investor said during a speech at UC Irvine in 2015.
Armed with this philosophy, Johnson made it his business to bring popular franchises like Starbucks and Burger King to underserved communities. One of the ways he achieved this was through investments in mitú, the Latino-fueled media brand, as well as a controlling interest in EquiTrust Life Insurance Company, which he bought with the stated goal of providing financial services to minority groups.
The moral of the story: Don’t neglect the value in overlooked and underappreciated segments of the economy. They are a certified way in as a solid foundation is built that will reward the hard work you put in.
As with any strategy, it pays to be aligned with people who know more than you.
In Johnson’s case, the route he took was getting and working with well-established strategic partners.
Case in point: a partnership with Will Ferrell and Tony Robbins to co-buy the Los Angeles Football Club of MLS, on top of joining another syndicate of investors led by Apollo Global Management’s Josh Harris to buy the NFL’s Washington Commanders in 2023.
“Not all investors can strike such megadeals in the boardroom, but investors might want to pay attention to their “co-investors” while studying companies,” Moneywise stated. “For instance, Warren Buffett’s recent stamp of approval for Ulta Beauty may warrant a closer look for investors seeking to add an undervalued brand to their portfolio.”
Last but not least. Never put your eggs in one basket.
Translation: Diversify. Spread the effort out to include different types of investments.
Johnson did it with stakes in renewable energy companies, tech startups, infrastructure companies, media outlets, and, yes, an esports team.
“Other wealthy investors are similarly well-diversified,” mentioned Moneywise, which drew from the UBS Global Family Office report to mention that “ultra-wealthy families across the world allocated 28% of their assets to equities, 22% to private equity, 10% to cash, 10% real estate and 1% each in art and gold.”
Another moral to take in:
Splitting your assets in multiple ways (index funds, individual stocks, bonds, and perhaps gold) could open a stable door for the long term while promoting a long-term strategy for never being short on funds.
After all, if Magic can do it, you can too. Mold his strategy to yours and the sky will be the limit on how the work will benefit you in so many ways.
To quote Wu-Tang Clan’s The RZA (aka the RZArector) from The Gravediggaz’ track “Twelve Jewelz”), “He who works like a slave eats like a king.”
Let it marinate.
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