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.
Actually, yoru comment about Randy Newsom (baseball player) is incorrect. He gave all the money back from his “IPO” due to SEC concerns. If you read the article you linked to, you’ll see the update at the end. For now, you *cannot* buy shares in a US pro ball player.
[Editor’s note: Thanks, tense is fixed.]
I used to be a model. I don’t think money (or lack of money) is an important factor for an aspiring model.
If I would have a daughter who wanted to be a successful model, I would advise her to study marketing, online marketing in particular, public relations and business in general.
Modeling is like a small business. You don’t need a lot money to start a successful business now, all you need a good idea and some hard work. Same goes for success in modeling. You don’t need much money to be a successful model, if you really, really want it. But you do need to be focused, you need willingness to learn and work very, very hard.
If you really want to be a successful model, you will have to work so hard, that the return on your time and efforts will be almost non-existent at first. It will make the whole idea of modeling ridiculous. If you sill want it and continue working just as hard, there is no way you will not succeed. With the drive like that you will and, I say it again, you will guarantee to become a model or some other re-incarnation of it, a TV-personality or whatever.
But most people can’t be that focused and work that hard… Plus, other things come into play.. marriage, babies, self-doubt..etc.. etc.. etc…
Lack of money is a lame excuse for not being able to succeed. A talent needs to be hungry! LOL
This post is worthless without pics :D
Lazy Man says
Jeremy, plenty of pics on the link. I’m surprised you made it down to the comment box to be honest :D.
Beauty Holding get 10%
plus the right to say what happens in the model’s career (in fact they decide how and for what the $10,000 are invested :-) )
Lazy Man says
Good eye, WiseClerk. I think I was thrown off by the line:
“During that year, her net modeling income will be shared in equal parts (50-50) between her on the one hand, and all her Sponsors on the other.”
I see that the net modeling income is after Beauty Holdings “10% fee from your gross earnings.”
Like modeling VC? :) I’m intrigued enough to possibly try it.
Dividend Growth Investor says
I would say that if this was an asset class it would be riskier than small-cap stocks, but with a lower expected return.
Has Beauty Holdings ever been successfull in launching the careers of any models? Or are they simply taking people’s money away for a promise of someone’s earnings. It’s easy to trick someone into buying shares of a model’s next year worth of earnings, and then make the model work a normal job.
Actually I am tempted to list myself as a model, and then work as a blogger for one year ( assuming I gain at least $20K form than). What will stop me from doing this? ( I am not saying I am going to do it, I am just saying it could be done like that)
Just to add: Beauty Holding also gets money from the transaction costs. There’s a certain percentage added on the amount of money from a credit card or PayPal you transfer to your beauty holding account. And of course advertisement on their website is a source of income. Let’s see what will happen – the first golden beauty has yet to be launched.
trying to get rich says
Well, read your story but when I go to their webpage I see that they alreayd paid out for the first time. So, it could be worse, maybe it’s worth to invest in models!