Spending is easy but investing is the pathway to real wealth. Magic Johnson is, without question, a great businessman. His net worth is projected to be around $600 million. Johnson’s business career reads like a who’s who of companies, having been involved with Starbucks, Sodexo, Burger King, Best Buy and a couple of sports franchises. Still, his greatest regret, as he once told Ellen, was not understanding the value of investing. Coming out of school Johnson was offered lucrative shoe deals while a startup company, Nike, offered him shares of stock. He took the cash and that was, by his own admission, a big mistake.
Investing is the way ahead, something Magic knows very well. Johnson walked away from his playing career with about $18 million but chose to purchase a 4.5 percent stake in the Los Angeles Lakers for $10 million soon after retiring. By 2010 his stake had risen to an estimated $50 million in value. Johnson sold his stake in the Lakers and with the profit started Magic Johnson Enterprises, an investment company that has delved into everything from real estate to sports. In other words, Johnson learned his lesson. Through the vehicle of Magic Johnson Enterprises, Johnson has made a conscious effort to invest in Black communities and worked to create jobs in neighborhoods that sorely need them. That commitment starts at Magic Johnson Enterprises first, where a team of Black women lead the way:
Investing is for everyone and there are ways to get involved, no matter where you are in life. Some people, like Johnson, have formal entities that can do real estate investing on a large scale. On the other end, some people might be able to invest in $1 lots in distressed neighborhoods. The Jobs Act, signed by President Obama in 2012, has made it possible for everyday people to invest in companies through equity crowdfunding. Perhaps you have a talented family member with a startup company and to them, $100 is the equivalent of $1 million — rather than loan them the money they might gladly give you a piece of their company for your investment. It doesn’t matter where you are in life, the only sure way to advance is to invest.
Magic Johnson learned a hard lesson. He took a nice chunk of change for a shoe deal upfront but in the longterm missed out on even more wealth because he didn’t understand the value of investing, ownership and delayed gratification. At the time he was a young man entering the NBA but to his credit Magic obviously learned his lesson and is proving everyday that the winning team is the investing team.