Oprah Winfrey at the 2011 Teen Choice Awards. Photo credit: Greg Hernandez. Licensed under Creative Commons Attribution 2.0 via Wikimedia Commons.
Oprah Winfrey was born in poverty to a single, teenage mother in Mississippi. Yet from these humble beginnings she became one of the wealthiest people in all the world. At last count she was worth well over $3 billion, every penny of which was self-made. While Oprah may be one of the highest-paid celebrities in America, her wealth didn't all come from wages. The secret is in her ownership of a great business and her investments in great brands. In fact, her path to wealth was similar to that of iconic investor Warren Buffett.
Taking ownership
Thanks to the success of her talk show, Oprah was a multimillionaire by the time she was 32. It was then that she made a decision that would change her life forever and vault her into the rankings of the world's wealthiest. Oprah negotiated ownership of The Oprah Winfrey Show, meaning that instead of simply earning a (very large) salary, she would partake in the success of the business she was creating.
Oprah went on to create her own production company, Harpo Productions. Harpo -- that's Oprah spelled backward, incidentally -- became the vehicle to create more wealth. Harpo has become a holding company for businesses that include Harpo Radio, Harpo Print, Harpo Studios, and her 50% interest in the Oprah Winfrey Network, or OWN.
Oprah and Buffett
The other thing Oprah did to build her wealth was to invest in great brands that she knows well. Through hosting The Oprah Winfrey Show, she became well acquainted with guests such as Dr. Phil, Dr. Oz, and Rachael Ray, who soon became viewer favorites and had regular segments on the show. These segments became the launching pad for spinoff shows produced by Harpo Productions. Oprah's early investments in people she believed in helped to turn them into well-known brands. These brands, in which Oprah owns a stake, multiplied her wealth by generating income for Harpo.
This is a path similar to the one that that Buffett took to amass his riches. Buffett has a particular fondness for great brands that he knows well, which is why he has taken large ownership stakes in world-class companies such as Coca-Cola (KO -0.14%), Heinz, GEICO, and The Pampered Chef. These brands earn Buffett a tidy profit each year. Buffett built even greater wealth by using the profit from these great brands to invest in other great brands.
How you can join Oprah and Buffett to create wealth
Oprah Winfrey and Warren Buffett are both self-made billionaires. The secret behind their success is pretty simple: They invested in great brands. Oprah invested in herself and owned her future by taking control of the brand and the business she was building. She then used that business to invest in (and profit from) other great brands like Rachael Ray and Dr. Phil.
It's a path that all of us can follow. We, like Oprah, can invest in ourselves to better our lot in life, whether that means earning a college degree or simply learning how to manage our money better. We can also invest in great brands that we know well. We might not be able to invest in Rachael Ray's show, but we can invest in Coca-Cola or one of the hundreds of other great brands that earn investors strong returns year after year. It might not put you on the path toward a billion-dollar fortune, but you could set your family up for a solid financial future.
