EP260: He List $38 Million… Here’s What We Learned

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Kevin Costner, the A-lister, just violated the cardinal sin of Hollywood, landing him in a lot of hot water.

What we can learn from Kevin Costner’s situation applies to our own lives and teaches us a crucial lesson about developing key financial strategies.  More on this later.

Now, you might think the Kitti Sisters can’t know Hollywood just because they grew up in Los Angeles.  Yes, we aren’t in showbiz, but we’ve mastered the art of raising capital for our real estate businesses. Take our latest multifamily project – we pulled together $38,000,000, matching what Costner personally poured into a passion project:  “Horizon.”

But here’s the kicker: our $38 million didn’t come from dipping into our own pockets. We pulled together high-net-worth individuals who are all about beating inflation with real estate, crave tangible assets, and chase the tax benefits to build a legacy that lasts.  Moreover, they lack the interest, knowledge, time, or energy to find and manage their own multifamily apartments. That’s where we come in, leveraging our expertise to create value for everyone involved.

Kevin Costner’s $38 million Horizon gamble was huge. He used his own cash and property to make a grand western epic. 

But he could have sidestepped this risk with one of the two simple strategies—one that could have been easily slapped right into his business model.

The Backstory: Kevin Costner’s Rise

To grasp the mistake Kevin Costner made, we need to start at the beginning of his Hollywood career.  He’s a risk-taker, famously cut from “The Big Chill” in 1983, but rebounded as a star in “Silverado” (1985). 

Despite warnings against making baseball movies, Kevin Costner achieved huge success with “Bull Durham” (1988) and ‘Field of Dreams” (1989), both of which became massive hits.

He then starred in “Yellowstone”, turning a series on a little-known channel into a hit, boosting his confidence to ignore Hollywood’s cardinal rule: “Never invest your own money in a movie.”

His first major risk, “Dances with Wolves” (1990), saw him invest $3 million of his cash, earning $184 million and seven Oscars. But this success and confidence might have encouraged even riskier bets.

The Movie Horizon and the Risks Involved

Although Costner has found success in the past by taking personal financial risks on his projects, the stakes are notably higher now. At 69 years old, Costner faces a tighter margin for recovery if the subsequent chapters falter.

Passion projects are always compelling, but what if Kevin Costner could have pursued his passion while taking on less personal risk? How can you continue to grow your wealth while doing what you love? True financial security hinges on smart financial strategies that we’re about to dive into.

A Passionate Project with Better Financial Strategies

So let’s begin with Strategy NO. 1 – Forfeit Financial Fortress. 

Here we’ve got three powerhouse pillars. 

First up, Active Income:

This is the cash you earn by trading your time for money. Consider Kevin Costner—his earnings from time spent on set. You might wonder how active income alone could bolster his financial security. Well, here’s the strategy: rather than simply banking that dough, imagine if he’d invested it into income-producing assets. This leads us to the second pillar.

Second, Passive Income:

Our two favorite words. This pillar is about putting your money on the frontlines so you can kick back. Wondering if truly passive investments exist? Absolutely. These are the setups that need minimal effort from you, but deliver substantial profits. 

Take real estate, for example. Skip the snail-paced equity game of single-family homes. Too slow, too risky. We go big with multifamily apartments—quicker, larger gains. Then there’s pocketing dividends from stocks, and more.

Over time, this pillar doesn’t just grow—it becomes rock-solid. This ensures your financial game isn’t just tied to your day job or whatever big project you’ve got next.

Imagine if Costner had supercharged his passive income machine. He could’ve funded his passion projects using this money-making powerhouse, tapping into the funds without risking his principal stash.

And the third pillar, Legacy Income: This is about cementing financial security and advantages for your future generations—something that most of us didn’t have growing up. It’s about creating a lasting impact and ensuring your family’s financial freedom. Something that Costner may be not be able to do as well as he’d like given his current financial entanglement. 

It’s essential to fortify all three pillars to effectively build your financial fortress. By doing so, you ensure your financial future, pursue your passions, and stand resilient against any challenges.

And if you’re wondering, “This strategy sounds great, but what if I don’t have enough active income to invest in passive and legacy income?” then this next strategy is especially for you. It’s also one that Kevin Costner could have used to fund his passion project.

Strategy NO. 2: OPM – Other People’s Money

This strategy shines in how we expand our multifamily real estate portfolio. Using OPM isn’t just about increasing our wealth; it’s about elevating everyone involved in our projects. This includes our passive investors, property management team, legal team, brokers, and more. 

Consider Ava DuVernay’s approach with her film Origin. Initially, she sought traditional financing but faced several roadblocks. Rather than relying on studio backing, she pivoted to an unconventional source: philanthropists. Organizations like the Ford Foundation and nonprofits supported by Melinda French Gates, Laurene Powell Jobs, and 23andMe CEO Anne Wojcicki stepped in. 

Many of these backers were new to investing in feature films, yet they were drawn to and believed in her vision. This strategy exemplifies using Other People’s Money (OPM) to not only fund a project but also to bring together a community of investors who are invested in the success and impact of the work.

Now, you might wonder, in Costner’s case, “Why should he use someone else’s money if there’s no clear profit?” To that we’d say, hey, investment isn’t always about direct returns. Think GoFundMe or university donors—do they see a tangible return? Nope. But they believe in the cause. Horizon could be more than just Costner’s passion; it could spark passion in others.

Think about GoFundMe campaigns—do those donors expect a return? Absolutely not. 

Or alumni who pour millions into their universities. Sure, they might get a building named after them, but there’s no ROI there. 

And what if Horizon turns a profit? What if Costner offered a model where investors could actually see gains? 

When we buy multifamily apartment complexes, sure, there’s risk—we’re upfront about that. But compare that to the film industry, where you gamble on box office hits, hoping crowds turn up. In contrast, multifamily properties are already generating cash. They’re established businesses with customers locked in on yearly leases.

Instead of risking his assets, Costner could’ve pitched to investors with the same spirit as venture capitalists.  VCs throw millions at tech startups, not flinching at failures because they’re hunting for the next tech unicorn. They play the averages.

Investors in Costner’s venture would likely back multiple endeavors, not sweating it if Horizon flopped. They’re in it for the portfolio’s overall victory. This might be a new playbook for Costner, but in real estate, it’s just another day at the office. We know this game inside and out.

Unfortunately, Costner didn’t tap into either of these strategies, and even an old-time gambler like Crash Davis can run out of luck.

Kevin Costner’s career is a testament to his relentless pursuit of passion and success. While Horizon represents a significant gamble, it highlights the critical need for financial planning and diversified income streams. 

Whether you’re a Hollywood A-lister like Kevin Costner or an everyday individual, adopting one or both of these strategies is crucial for securing your financial future. 

Now, if you’re interested in learning how to use other people’s money to buy large multifamily complexes—think 65 units and above—make sure to catch this video. We’ll see you there!