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Arnold Schwarzenegger reveals how he made millions before becoming a movie star — and it wasn’t from bodybuilding

Arnold Schwarzenegger reveals how he made millions before becoming a movie star — and it wasn’t from bodybuilding
Arnold Schwarzenegger reveals how he made millions before becoming a movie star — and it wasn’t from bodybuilding

Former California governor Arnold Schwarzenegger’s journey epitomizes the quintessential American Dream.

Born in Austria from humble beginnings, Schwarzenegger arrived in America with "empty pockets" in 1968 at the age of 21. He competed in bodybuilding shows, winning numerous prizes — yet even as a champion, he found himself working in construction. He once remarked that he considered the $5,000 he earned from building a wall to be “a big paycheck.”

In 1982, Schwarzenegger made his breakthrough in the movie industry with "Conan the Barbarian,” quickly establishing himself as a bankable star in Hollywood. With iconic performances in movies like "Terminator" and "Predator," he solidified his status as one of the highest-paid actors in the industry.

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However, movies weren't what brought Schwarzenegger his first taste of wealth.

In an interview with real estate mogul Grant Cardone, Schwarzenegger revealed the process that got him into the millionaires club.

“I was a millionaire before I ever did ‘Conan’ or ‘Terminator,’” Schwarzenegger told Cardone. “I became a millionaire because of real estate.”

Schwarzenegger proceeded to detail exactly how he amassed his first fortune. But is it possible to replicate his strategy today?

‘Arnold, listen to me’

“There was a real estate woman by the name of Olga,” Schwarzenegger recalled. “She was from Lebanon, and she was Danny DeVito’s height. She said to me, ‘Arnold, listen to me, you need income property. When you have a house or when you have a condominium, then you have to pay the mortgage, you have to pay for the expenses, but I find you a six-unit apartment building that has an owner's unit in front.’”

Schwarzenegger recounted that the apartment building Olga found cost $240,000. He emphasized that this was back in the 1970s.

For context, the median price of houses sold in the U.S. in 1975 was around $39,000.

Although the apartment building represented a significant investment, it proved to be highly worthwhile for Schwarzenegger.

“Two years later, I got $400,000 when I sold the building — I put only 27 and a half down,” he revealed.

In other words, Schwarzenegger made a tidy profit of $160,000 (subtracting $240,000 from $400,000). If the $27,500 down payment was his sole investment in the property (meaning the rental income covered mortgage payments and other expenses), the return on that investment would be 481.8%, not including the additional rental income he may have collected along the way.

Read more: The 5 most expensive mistakes in options trading and how to avoid them

Now and then

Given Schwarzenegger’s success with that investment, one might wonder if it's feasible to replicate that strategy today.

Well, the landscape has evolved significantly since the 1970s, with skyrocketing home prices demanding substantially higher investments.

While the fundamentals of real estate investment remain sound — you can purchase an apartment building and earn rental income — aspiring investors must navigate a market where entry costs have surged, posing greater challenges for those lacking substantial capital.

To put things in perspective, the median home price in the U.S. had reached $417,7000 in Q4 of 2023.

Apartment buildings with multiple units can command significantly higher prices.

However, these days, you don’t have to be a landlord to invest in real estate. Publicly traded real estate investment trusts (REITs) offer easy access for individuals seeking exposure to the sector. At the same time, there are also crowdfunding platforms that allow you to become part owners of diversified real estate portfolios.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.