Buying Shares of Models Gives Your Portfolio's "Asset Allocation" a Whole New Meaning
Each week, 5-10 companies write me to ask if I would review their site. 99% of the time, I take a quick and little that I would like to feature as a story. This past weekend, one company put themselves in that 1% with an interesting idea - selling shares of model's future earnings.
Investing in Models: How It Works
Models without contracts need some seed capital to get their career off the ground. Beauty Holding is here to help. Models put up a profile and ask others to invest in them. You can buy a share (called a $take) for $1. Once a model earns $10,000, she becomes a Golden Beauty. That simply means that she has enough money to pay for her transport to Paris and London for fashion shoots with top photographers. The money she makes over the next year is split down the middle between you are her. I'm not sure what Beauty Holding has to gain, unless it's a lucrative deal for the years after the first one. For those models who don't wish to go the Ashley Alexandra DuprÃ© route, perhaps Beauty Holding is a reasonable alternative.
Is Investing in Models a Unique Idea?
Perhaps investing models is unique, but investing in someone else's career isn't. I remember back in college my friend's father once said that he'd pay for medical school if he could get the earnings of that doctor in the 7th and 8th year or work (assuming they maximized their earning as best they reasonably could). Minor league pitcher, Randy Newsom,
is selling sold shares of his career earnings as well. This is much the same thing, but only for one year.
My Thoughts about Investing in Models
I think it's a very interesting "asset" class. However interesting it is, I'm not sold that it really has a place in your portfolio. It's extremely speculative to say the least. I don't know how much a model makes in the first year, but I feel like $100,000 is a fair starting number. After taxes that's probably closer to $70,000. If that's true, then all 10,000 shares would be worth $35,000. Your $1 would grow into $3.50. That's not bad, but what are the odds of success? What if it takes 9 months to ramp up and you only get 3 months of solid earnings. In this scenario, you could lose money even if the model becomes the next Giselle.
I look at it as I do going to the casino. It entertainment. If you lose your money, you bought yourself entertainment for the night. If you invest in a model and she doesn't become big, I think you need to consider it as part of your entertainment budget.
10 Responses to “Beauty Holding: Investing in Models?”
Next: Free Credit Scores from Credit Karma – No Scam