Kim Kardashian-West inked what is proving to be a massively lucrative deal with the mobile gaming company Glu Mobile (NASDAQ:GLUU) last year. Thanks to soaring royalties paid to her on Glu Mobile's top selling Kim Kardashian Hollywood game, the celebrity may have pocketed as much as an extra $6,600 per hour last quarter.
Since Glu Mobile and Kardashian have kept mum on the details of their deal, the exact amount paid to her isn't known. But based on Glu Mobile's sales from Kim Kardashian Hollywood totaling $44 million last quarter, its not a stretch to guess that Kardashian landed a big chunk of the $13.2 million more in royalties that Glu Mobile paid out between the second and third quarter.
If so, that's an impressive pop for the social media savvy celebrity, but mobile gaming is far from Kardashian's only money-making venture. Kardashian's willingness to open her life to the public eye has allowed her to create a self-named brand with 24 million Twitter followers, 23 million Facebook fans, and a net worth in the tens of millions of dollars. So let's consider a couple money lessons we can learn for her.
Invest in what you know
Kardashian's biggest investment has been in herself. In 2007, Kim spun a media frenzy into an E! Entertainment reality television series centering on her family life. Keeping Up with the Kardashian's proved to be a reality television smash that allowed her to star in a slate of spin-offs including Kourtney and Kim Take New York and Kourtney and Kim Take Miami.
The success of those series allowed her the chance to ink a seemingly endless string of deals that includes perfume and clothing licenses, marketing deals with brands like Midori Liquor and Sketchers (NYSE: SKX), and her deal with Glu Mobile. Thanks to those deals and a three-year extension signed with E! in 2012 that pays Kim $80,000 per episode, Kardashian's investments in herself have given her a net worth that is measured in the tens of millions of dollars.
She achieved that financial success by sticking with what she knows best. In September, she even negotiated into her Glu Mobile contract warrants that could allow her to eventually own up to 500,000 shares of Glu Mobile stock. You can bet she wouldn't have done that if she didn't have a solid understanding of the value her brand may bring to the company.
Although we can't all become A-listers like Kardashian, we can make sure that we similarly focus our investments on things we know and that we can easily understand. Maybe that means investing in retail stocks. Or maybe that means concentrating on technology companies. Either way, sticking-to-your-knitting may allow for investing insights that others just simply can't see or profit from.
Dividends that keep paying
Despite a high-profile marriage to Kanye West, who sports a net worth north of $100 million all by himself, Kim's money machine isn't showing signs of slowing down.
Industry watchers think that Glu Mobile's Kim Kardashian: Hollywood app could eventually generate up to $200 million in revenue for Glu Mobile. Such rosy forecasts that prompted Glue Mobile to extend Kim's contract by three years in September. That means that Kardashian will benefit for years from ongoing royalty payments for Kardashian branded mobile games. Kim's perfume, clothing, and book deals are likely to continue kicking off royalty income for her, too.
Kardashian's ongoing income stream is enviable, and while most of us won't be able to rely on our celebrity to guarantee us regular income payments, we can take a page out of Kardashian's book and invest in dividend paying companies that provide a steady stream of income for us, too. Many of the world's biggest and best known companies, including Coca-Cola (NYSE: KO) and Apple (NASDAQ: AAPL) return money to their investors every quarter, and over time those dividend payments can go a long way to securing investors' financial future.
Following Kim Kardashian's path to riches
Kardashian doesn't strike me as someone who puts off money-making decisions until tomorrow. She's building an increasingly bigger brand for herself by embracing opportunity and acting on it. Investors could learn a thing or two from that approach. Despite the significant advantages of investing when young, millions of people continue to put off taking the first step. Kardashian is young, yet she's already got a sizable fortune. Thanks to compounding, it's likely her wealth will continue to climb over the coming decades, suggesting that the best money lesson we can learn from her is simply to get started.
Todd Campbell owns shares of Twitter, Facebook, and Apple. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned.The Motley Fool owns shares of Apple, Facebook, and Twitter and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.