How Actors Make Their Money

If you ever wondered how celebrities made their money or what is the celebrity net worth of an individual you are not alone. We are amazed by the vast sums of money a celebrity can earn in a short amount of time, something that will really blow your mind is how quickly the celebrity net worth rankings change as these celebrities begin spending more money than they earn.

It’s All About Residuals

Actors and actresses that star in a major Hollywood movie earn money a few ways but the bulk of their wealth will come from the residuals the movie generates. While the production company that is creating the movie will pay the performers a flat amount of money this is just the tip of the iceberg. If the celebrity actor/actress is well established then they will negotiate a residual on whatever the movie grosses. Whenever the movie is shown a percentage of the revenue generated from those viewings will go to the performer as a means of motivating them to do their level best in the movie. Aside from viewings inside the local cinema, another way that the performer earns money is when the movie appears on television via syndication. There are performers getting paid for movies they made several years ago so it is no wonder that some actors and actresses can earn upwards of seven or eight figures in a year.

Endorsements is another way that celebrities can earn money, whether it is for insurance, shampoo or makeup there is virtually no limit to the full range of endorsements these celebrities can associate their “brand” with. Since there is no additional work involved these endorsement deals are a great source of passive income for the celebrity and can actually pay better than their actual acting gigs.

Writing a book about their life is an additional way that a celebrity can earn money. In the past, the performer would write their autobiography just before they passed away or were retired but that model is no longer applicable, you can find autobiographies of relatively young performers who are trying to “cash in” on their recent popularity.

Easy Money, Lavish Lifestyles

Something we see quite often is when a celebrity becomes famous overnight is they tend to spend their newfound wealth on extravagance they cannot afford. While the money is rolling they purchase homes and a variety of expensive vehicles without giving a thought to what would happen if their career came to a sudden halt. This risk is very common with professional athletes who could at any moment in time sustain an injury that would end their career and income earning potential. Without practical financial planning these celebrities end up going bankrupt not long after their career comes to a halt, it is the primary reason these celebrity lists change often.

celebrity net worth

If there is something we can draw from the lifestyles of celebrities it is that money can’t buy happiness but it can really change your life around for the better.