Tuesday, January 24, 2006

George Foreman on trusts and investing

Quite a guy, George Foreman. Olympic gold medalist, he boxed his way to the world heavyweight championship, retired in 1977 and became a preacher, returned to the ring when his money ran low. In 1994, at age 45, he regained the world championship.

Big George made his really big money hawking George Foreman Electric Grills, initially for 40% of the profits. In 1999 he sold the rights to his name for $127.5 million in cash plus $10 million of stock in the grill-maker, Salton Inc.

In a recent Wall Street Journal interview, Foreman talked a bit about money matters. A few excepts:

On why one of his best investments was a trust

When I first started making money from boxing, I put 25% of all my earnings into a trust fund. I made other investments during that time, in cattle and gas wells, that I lost my shirt on, but I always had the trust fund. When I retired to become a minister, I survived on that money. I learned how important it is to have something to fall back on.

On his reaction as an investor to 9/11

After 9/11 . . . I took a lot of money and told my broker to buy American company stocks. He said, "Don't you want to wait?" and I said "No, this happened to New York for a reason, to scare us." That investment paid off greatly.

On his asset allocation

I have about 35% invested in stocks, about 35% in bonds and the rest in real estate. I like investing in real estate, it's first in my heart. I've bought and sold a lot of property all over the country. I have a ranch in east Texas that I particularly love and will keep until I pass. Then maybe my children can cash it in.

On obtaining investment advice

I have a lot of people who help me, but I've known from my boxing days that you should never rely on just one person. You must be diverse in the information you receive. Because investors are just like boxers, they get punch-drunk, they get burned out, and no one knows it until their legs start wiggling.

On his best investment

I still believe my best investment has been...the money I put into universities [to fund scholarships]. I never call them donations, I call them investments.

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