In this segment of the Motley Fool Answers podcast, Alison Southwick and Robert Brokamp seek personal finance advice from one of the greatest stars of 20th century film, Elizabeth Taylor. From brand management and entrepreneurship, constant hustling, and excellent estate planning, the violet-eyed icon made choices worth emulating -- even if you don't have $150 million worth of jewelry.
A full transcript follows the video.
This video was recorded on Nov. 14, 2017.
Alison Southwick: Speaking of breakups, Elizabeth Taylor loved getting married. Eight times, in fact. She also loved getting divorced. She was even married to the same man and divorced the same man twice. The drama that surrounded her life overshadowed the fact that she was actually pretty savvy with money.
Robert Brokamp: Was she?
Southwick: Do you want to learn all about it?
Brokamp: I would love to.
Southwick: Because today I am going to present you with three money lessons from Elizabeth Taylor.
Brokamp: Oh, great!
Southwick: Lesson No. 1 is make the most of your brand. When she died in 2011 at the age of 79, she was believed to be worth roughly $600 million.
Brokamp: Holy cow!
Southwick: Where do you think her money came from, Bro?
Brokamp: I don't know. I'm actually listening to this new podcast that's about the history of early Hollywood. This is a series about Boris Karloff and Bela Lugosi, and it sounded to me like actors and actresses back then didn't have any rights, so I would assume like royalties of some kind, but I don't know if they had any rights back then.
Southwick: No, you're right. So back in the early days she would refer to herself as "MGM chattel," because until 1961 she was under a studio contract, which means she made not very much money or had much control over her life. And while she was the first woman to make $1 million for her title role in Cleopatra, her real money came from her entrepreneurism.
Southwick: She recognized that, funny thing, she wasn't getting a lot of roles in her late 40s and 50s, and she needed another source of income. So, according to Bloomberg, Elizabeth Taylor was the first celebrity to really capitalize on her brand. It started with her perfume in 1991. Do you remember what it was called?
Brokamp: I don't. Eau de Michael Jackson?
Southwick: White Diamonds.
Brokamp: Oh, really?
Southwick: Yeah. It was followed by a costume jewelry company and other branding plays, so how successful was she? Well, at least in the case of White Diamonds, it had raked in $77 million in sales the year before she died.
Brokamp: Holy cow! I vaguely remember commercials about this.
Southwick: So even now, six years after her death, her estate is still raking in $8 million a year from all of the branding. A little bit from the residuals, but yeah.
Brokamp: Wow! That's impressive.
Southwick: All right, next lesson. Lesson No. 2. Always be hustling! Elizabeth Taylor's final wedding was to Larry Fortensky in 1991. I'm sure you remember this.
Brokamp: Wasn't he like the butler or something like that?
Southwick: No, he was 20 years her junior, and he was a construction worker that she met at the Betty Ford Clinic. And the tabloids went bananas, as they had her whole life. The wedding was at Michael Jackson's Neverland Ranch, because they were very good friends, and it cost between $1.5 [million] and $2.0 million.
Southwick: Apparently Michael Jackson actually footed the bill. And here's a side note -- a little mini-lesson from Elizabeth Taylor. She has a history of receiving very nice gifts from friends, including a 69-carat Cartier diamond ring. It was given to her by Richard Burton and he paid $1.5 million for it in 1969.
Southwick: So, yeah. Let's head back to the wedding. Here we are on the wedding day. It's a veritable Who's Who of celebrities including Liza Minnelli, Eddie Murphy, Nancy Reagan, Macaulay Culkin.
Brokamp: Of course.
Southwick: It was the early '90s. This is who you're going to get. A dozen helicopters flew overhead to get photos, and one determined paparazzo actually parachuted into the ceremony to get pictures.
Brokamp: Did he get arrested? Shot down?
Southwick: I hope so. What does Elizabeth Taylor do? She capitalizes on all this excitement and she sells her wedding photos to People magazine for $1 million and then uses the money to start an AIDS charity.
Brokamp: Oh! That's cool!
Southwick: I know! That's why I'm telling you about it. Last lesson, and this one is near and dear to your heart. As we mentioned before, Elizabeth Taylor was reportedly worth upwards of $600 million when she died, which included $150 million in jewelry...
Southwick: ... the aforementioned $1.5 million ring that she got in the '60s. She also had real estate that was worth at least $130 million, and we don't know a lot about what she passed on to her heirs because it was in a revocable living trust. Now Larry Fortenski, her last husband, admitted that she left him roughly about $800,000. You might assume that a nasty fight erupted, right? Because she's like super wealthy, and tons of kids, and tons of grandkids? Nope. Not so. The estate was settled peacefully, and only Larry had the loose lips. The rumor is that most of the money went to her children, grandchildren, and charities, but they all lived happily ever after honoring her legacy.
Brokamp: Right. So, as we talked about in the previous episode about estate planning horror stories, anything you pass on via a will eventually becomes public because a will is a public document. If you do it via trust, you can maintain a lot more privacy.
Southwick: There you go. I also have a bonus lesson. Do you want to hear my bonus lesson?
Brokamp: That would be grand!
Southwick: So, Elizabeth Taylor's life was always under scrutiny and in the public eye. If you think Jolie-Pitt-Aniston was a huge mess -- remember when Angelina Jolie and Brad Pitt like cheated, and yeah, yeah. Huge deal. It has nothing on when Eddie Fisher left Debbie Reynolds for Elizabeth Taylor.
Brokamp: Carrie Fisher's parents, yes.
Brokamp: Can you tell the story about that? That was scandalous.
Southwick: Yes. Debbie Reynolds and Eddie Fisher were best friends with Elizabeth Taylor and Mike Todd. Mike Todd was Eddie Fisher's best friend. They all hung out together. They did everything together. So, Mike Todd dies in a plane crash. It was something sudden. And as Carrie Fisher puts it, her father rushed to Elizabeth's side, gradually moving to her front. In a very short amount of time, Eddie leaves Debbie Reynolds and he marries Elizabeth Taylor. So, Elizabeth Taylor was always in the tabloids: for her marriages, her divorces, having the audacity to get old and gain a little weight. So, in an interview I once saw, she was asked by the reporter if all the criticism in the press bothers her. And she replied, "They didn't get me in my home." Have you ever heard that phrase before?
Southwick: I had never heard that phrase before, either. But basically, it was her saying they don't know what really bothers me. Their words don't hurt me because they don't know me well enough. And I just love how she was taking back the power. Like the Pope once condemned her and Richard Burton's wedding. And what did she say? Well, this was an indirect response to the Pope, but the idea that [he] didn't get me in my home and she's just going to keep on moving forward and being awesome Elizabeth Taylor. Marry whoever she wants.
So that is my extra bonus lesson. It's not about money, but it's the idea of don't let them get you in your home.
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