Arnold Schwarzenegger: Muscles, movies, money

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Welcome to Good Bad Billionaire.

Episodes are released weekly wherever you get your podcast, but if you're in the UK, you can listen to the latest episode a week early first on BBC Sounds.

It's spring 1984 in Los Angeles, California.

We're on the location shoot of a movie that will be a box office smash in the middle of shooting a scene that will become iconic.

A huge muscular actor with a crew cut clad in black leather and wearing wraparound sunglasses has walked up to a counter where a mustachioed actor is playing a cop.

Shot in extreme close-up through glass and from below, there is a genuine menace to this man's presence, especially when he leans forward and begins to laboriously intone his dialogue in a thick Austrian accent.

I will be back.

There's a shout of cut from out of shot and the movie's agitated director runs into view.

No, no, no, it should be I'll be back, he exclaims.

We've already been through this, says the Austrian actor.

I prefer I will be back, it's more robotic.

Eventually, the pair reach a compromise.

The actor will run through ten different readings of the line.

I'll be back.

I'll be back.

I'll be back.

I will be back.

I'll be back.

There is something you can use there, James, he says when he eventually wanders back to his trailer.

Welcome to Good Bad Billionaire from the BBC World Service.

Each episode, we pick a billionaire and find out how they made their money.

We take them from zero to their first million, and then from a million onto a billion.

I'm Simon Jack, I'm the BBC's business editor.

And I'm Zing Sing, and I'm a journalist, author, and podcaster.

And we are back with the first episode of a new season of Good Bad Billionaire.

And the actor in that scene, with my apologies, was of course Arnold Schwarzenegger.

And that film was The Terminator, one of the box office hits that made him one of the planet's biggest and best paid film stars.

Arnie, as he is often known, was already a champion bodybuilder by the time he got into acting.

But he amassed a billion dollars as much through his investments as from the two careers that made him famous.

Of course, he's had a fourth career too as a politician, serving as California's governor from 2003 to 2011, but that's not the thing that made him rich.

He was born in Austria and emigrated to the USA in 1968.

Having already been named Mr.

Universe in Europe, he then set himself the goal of becoming the most successful bodybuilder of all time.

And once he achieved that, he aimed to be paid a million dollars a movie.

He achieved all of that and more in a life that could have been taken from a Hollywood screen pay itself.

That's right, so let's go right back to Arnold's opening scene.

Arnold Alois Schwarzenegger was born in July 1947 in the rural village of Tal in Austria.

This was just two years after the end of the Second World War and the fall of Hitler's Third Reich, of which Austria was a part.

Now, Arni's mum and dad had actually met during the war.

His father, Gustav, had served in the German military and saw action across Europe, including in the Battle of Leningrad, where he was wounded and was awarded the Iron Cross.

After being discharged, he was reassigned to work for a rural police force, and it was there that he met Arnold's mother, Aurelia, who was herself a war widow working as a clerk in a distribution hall.

Aurelia was 23 when she and Gustav, then 38, tied the knot in 1945 just after the war had ended and Gustav continued with a career in the police force earning a pretty lowly wage but given free housing in an old forester's lodge in Tal.

So it was into a pretty modest working class home that Arnold was born.

There was no plumbing, no running water.

The nearest well was a quarter of a mile away, so someone had to go out and get water, whatever the weather.

Living quarters consisted of two bedrooms and a kitchen which meant that Arnold pretty much shared a room with his older brother Meinhard until he was 18.

So a pretty tough post-war childhood which was made all the tougher by Gustav Arnold's father.

Although young Arnold looked up to him, Gustav could be a violent and angry drunk.

He regularly hit Arnold and his brother and in recent social media videos warning against anti-Semitism, Arnold has attributed his father's violent outburst to the guilt he felt for his behavior during the war And he called his dad one of the many broken men that he was surrounded by when he grew up in Austria after the Second World War.

But there is one key element to his later success that can definitely be traced back to Arnold's childhood and his father working hard, both physically and for financial reward.

So physical exercise was a massive component of Arnold's early childhood.

It was even part of the household chores.

Get this, to earn their breakfast, Arnold and Meinhard were made to work out.

Can you imagine?

I'd like to know what they were eating for this breakfast.

You hope it'll be more than just a bowl of porridge, right?

I mean, Arnie said his dad would tell him he couldn't have breakfast until he'd done, okay.

I cannot believe this, 200 sit-ups and push-ups in the morning.

You can't believe that you don't do that?

I can do a plank for about 15 seconds.

So interesting then, I can imagine this rather austere, intense, physical, quite brutal upbringing, hard, but I suppose that prepares you for the grueling physical workouts he's going to do to hit his goals, if you like, later in life.

I mean, I can't imagine many adults doing 200 sit-ups a day, let alone a child.

Meanwhile, Arnold also had to earn his own pocket money.

And as with so many of our billionaires, his entrepreneurialism started young.

When he was 10, he started selling ice cream at a public park, and he'd invest the pocket money he earned from his parents into dozens of ice cream cones and then walk around the park, selling them for three Austrian shillings each.

And he claims to have soon been earning the equivalent of $6 in an afternoon.

So quite a lot of money in those days.

That would be worth closer to $70 today.

That's a lot of ice cream.

I mean, ice cream, sweets, newspapers.

I think we should almost have a separate show where we clock up how many things young billionaires sold.

Yeah, we've had sort of chewing gum, newspapers is a brown is a popular one.

Yeah, often buying stuff and selling it on.

And later in youth, Arnold had holiday jobs, shoveling glass in a factory, that sounds like fun, and a similar role at a sawmill.

He'd earn the equivalent of around $55 in a summer.

That's about $600 in today's money.

But it was also in his teens, right, that Arnold became obsessed with bodybuilding.

Yeah, he became captivated, funnily enough, by an English muscleman called Reg Park, a winner of the bodybuilding contest Mr.

Universe.

Arnold first saw Reg Park playing Hercules in this sort of swords and sandals romp in the Italian film, actually, called Hercules and the Captive Women.

I'm not sure you get that title across through there.

Not in Hollywood.

Not in Hollywood these days.

But it was picking up a copy of a magazine called Muscle Builder, which had Reg Park on the cover that really changed Arnie's life.

He'd read about Park's working class background in London and how he'd got into bodybuilding, become successful, moved to America, key point, and started a career in acting.

So this was the light bulb moment for Arnold.

He suddenly saw a way out of the life he was leading in Austria.

Yeah, a ticket to the big time.

So Arnold was 14 and his mission was set.

He'd become a strong man and moved to America.

Now, obviously, he was already used to working out every day.

Remember, those 200 sit-ups, but weightlifting became an obsession.

He started dreaming of becoming a professional bodybuilder.

He even covered his bedroom walls with posters of boxers, wrestlers, and weightlifters.

Arnold has often told the story of proudly showing his mother how he decorated his room.

But when she started to look at all the images of oiled up musclemen, she began to cry.

He says she even called a doctor to the house to try and figure out what was wrong with her child.

But despite his mother's misgivings, Arnold was undeterred.

Age 15 he got his first taste of athletic success.

He took part in his first weightlifting competition in front of a crowd of three to four hundred people.

He loved having an audience.

Their applause gave him a big boost.

He lifted 185 pounds.

That's 83 kilograms.

That is 35 pounds more than he'd ever managed before.

So that encouragement from an audience makes him go further.

At 18, just as he was starting to win trophies, however, Arnold had to complete mandatory basic training for the Austrian army.

Now, he claims he wrecked two tanks while in his brief stint in army training, and then he went AWOR to compete in a junior Mr.

Europe contest in Germany.

He did a night in military jail, but has said his superiors only sent him there so they could say they'd punished him officially.

Actually, they were proud because he'd won the competition.

Nonetheless, Arnold ended up getting an early discharge and he pursued a job managing a gym in Munich for Germany's biggest bodybuilding promoter of the time.

But his focus was on his own body.

And in 1966, Arnold took his first ever flight from Germany to London to compete as an amateur in Mr.

Universe.

He ended up coming in second place, but the following year, he returned to London and won.

And that made him the youngest ever Mr.

Universe at age 20.

And if you look at photos of this 20-year-old Arnold Schwarzenegger, he's already recognisably this enormously hulking, great muscle man who'd go on to become world famous.

And I have to say, looking at those pictures, he he is massive.

Yeah, I remember the famous late Australian writer Clive James, satirist, once described Arnold Schwarzenegger as looking like a condom full of walnuts.

And let me tell you, he does indeed look like a condom full of walnuts.

And what's worth remembering, when I was growing up as a kid in the 70s,

the musclemen thing was actually still a thing.

People knew who Charles Atlas was, for example.

Sean Connery had even come third in Mr.

Universe or one of those big Musclemen competitions.

It was a thing, you know, in a way that I don't think it is these days.

No, definitely not.

You became a celebrity because of it.

Yeah, but he has admitted that he had some help building that incredible physique.

In the run-up to the 1967 Mr.

Universe, Arnold tried anabolic steroids for the first time.

These are drugs which can help you put on extra muscle, and he put on an extra 10 pounds.

Now, he has since issued warnings about steroid use, but he also notes that steroids were relatively new at the time, and he got them simply by asking his local GP.

For many years, he said he had no regrets about that steroid use, pointing out that the dosages bodybuilders took back then were much lower than people use today.

I mean that doesn't come as a massive surprise at this point.

I honestly don't think that is a body that could be achieved just through sheer physical workouts alone.

It is immense.

I mean even by today's standards he is massive.

But it wasn't just Mr.

Universe there are there's a whole world out there.

Indeed having won the amateur competition Arnold discovered there were many other competitions.

There was a professional category, a US version of Mr.

Universe, a Mr.

World, and a Mr.

Olympia.

Someone had a lot of fun coming up with these names.

And over the next three years, Arnold would win them all.

Yes, first in 1968, he returned to London to win Mr.

Universe in the professional category.

That got him on the radar of Joe Reider, a bodybuilding impresario.

Yeah, he ran Mr.

Universe in America.

He created the professional Mr.

Olympia contest and was in charge at Gold's Gym in California, known then as the Mecca of Bodybuilding.

In fact, it's still pretty famous today.

You can get merch of Gold's gym and everything.

Now, Weida invited Arnold to be flown to Miami to take part in the US version of Mr.

Universe.

Arnold came second, but he impressed Weida enough that he offered to fund him moving to the States.

And there, Weida gave Arnie a weekly salary, a car, an apartment, and in exchange, Arnie wrote about his training program in, and perhaps most importantly, was photographed for Weida's Muscle Builder magazine.

So, in 1968, young Arnold had achieved his dream of moving to America.

He settled in Los Angeles and he began training at Gold's where he befriended a group of bodybuilders and worked on his goal to become the most decorated bodybuilder in the world.

He set about conquering the world of bodybuilding.

He won the American Mr.

Universe in 1969, Mr.

World in 1970, the professional Mr.

Olympia every year from 1970 to 1975.

And he won some prize money up to $2,000 a time.

Decent cash, but it's not going to make him a millionaire, certainly not a billionaire.

But he also began the career that would earn half his billion acting.

In 1969, aged 22, Arnold landed at the titular row in Hercules in New York, a low-budget spoon.

Sounds great.

Now, in the movie, he was billed as Arnold Strong, contrasting with his co-star, the largely forgotten comic actor Arnold Stang.

And his heavy Austrian accent was tough for English-speaking audiences to understand.

So his voice was actually dubbed over.

I have to say, the young Arnold was not the world's best actor.

Suffice it to say, Hercules in New York was was neither a classic nor a hit, and the production company went bust before it was even released.

So it wasn't exactly Arnold's big break, but he enjoyed the experience.

He made $1,000 for just one week of filming, and it set him on an unstoppable path to stardom.

His next film, Robert Altman's The Long Goodbye, was a bona fide classic, but he only had a tiny uncredited role.

But two films in the late 70s would really put him on the map.

So first, he had a lead role opposite Jeff Bridges and Sally Field, and Stay Hungry from director Bob Raffelsson, who just hits with Head, Five Easy Pieces, and The King of Marvin Gardens.

I had no idea about this.

I mean, that's a serious director.

Those are serious films.

Exactly, and these are serious actors as well.

Jeff Bridges and Sally Field were at the top of their game.

Now, Stay Hungry was not a hit, sadly, but it did win Arnold a Golden Globe for Best Acting Debut in a Motion Picture Mail.

That is a pub quiz question and a half.

Yeah.

Then came a documentary that really put Schwarzenegger centre stage.

You may have heard of it.

It's called Pumping Iron, and it followed Arnie as he trained for the 1975 Mr.

Olympia, focusing on the rivalry between Arnie and a newcomer named Lou Farino.

Now, Lou Farino, he was also a star of the small screen.

He was the incredible Hulk.

Yes, I thought I recognized his name, famously painted green for the freedom.

Painted green.

That culminated in Arnie's record six win in a row.

Yeah, and Pumping Iron really took his bodybuilding fame into the mainstream.

So it wouldn't be long until he was cast in his first major action film, 1982's Conan the Barbarian.

But having said that, Arnie was a millionaire long before that film even came out.

And that is because even while he was conquering the world of bodybuilding and starting his acting career, Arnie had other business ventures too.

In fact, when Arnie arrived in the US, he'd always planned beyond bodybuilding or even acting.

He said, I did not rely on my movie career to make a living because I saw over the years that people that worked out in the gym and that I met in acting classes, they were all very vulnerable, they didn't have any money, and they had to take anything that was offered to them because that was their living.

I didn't want to get into that situation.

What happened to that accent?

Okay.

No, don't worry.

I want to...

What didn't want to get into that situation?

Now, as soon as he got to the US, Arnie began taking classes at Santa Monica College and then at UCLA.

He actually eventually got a degree in business from the University of Wisconsin.

Now, unsurprisingly, for a guy who became a billionaire, he definitely takes business very seriously.

And he described the Nobel-winning economist Milton Friedman, who was an advocate of free market, said that shareholders' interests are the most important thing.

You know, that was Reaganomics.

It became Thatcherism.

And Arnie described Milton Friedman as his intellectual idol.

Even after Super Stardom, he's been known to attend business lectures in the 1980s.

He went to one given by another of our billionaires, Warren Buffett.

Check out that episode.

And Buffett actually became a mentor of Arnold, inspiring his investment style.

I'm like Warren Buffett.

I don't invest in things I don't understand, Arnold would tell the New York Times in 2021.

I would love to sit in on a business meeting between Warren Buffett and Arnold Schwarzenegger.

I wonder if Warren Buffett takes him to McDonald's, famously Buffett's favourite place to eat.

But back in 1971, Arnie was focused on starting his business career.

In fact, he was so busy that when his older brother Meinhart, who had turned to drink, was killed in a car accident, he didn't return to Austria for the funeral.

And the following year, when Arnold's father died, Arnold again did not attend the funeral.

Yeah, instead, while working for Joe Weida, he also ran his own seminars that earned him $500.

A pop, he set up a mail-order business selling training booklets for a dollar each or 20 bucks a set.

That brought in another $4,000 a year.

And he'd begun co-producing his own bodybuilding events, including a championship in Ohio that was later renamed the Arnold Classic.

But Schwarzenegger also had some side hustles that were completely unconnected to bodybuilding.

In 1971, him and his best friend, an Italian powerlifter and bodybuilding champion called Franco Colombo, had started a bricklaying business.

Now, in his autobiography, Total Recall, My Unbelievably True Life Story, great name, Arnold explains how the pair played out a complicated routine to confuse and overcharge their American clientele.

Arnold would take out a tape measure and take measurements in meters and centimeters to, in his words, add to the European mystic.

Love that.

Then he'd showed it to Franco, and then the friends would start arguing in German in front of the client.

And Arnold, who would play the good good cop, would tell the client he was getting them a lower price, you know, which they'd be very grateful for and accept without knowing the argument.

It was all an act and the price was a fix.

Acting in the blood, then, some acting practice there.

But then there was a serious earthquake that struck the San Fernando Valley in Southern California in 1971.

It caused half a billion dollars of damage to property.

Inevitably, there was a lot of work for bricklayers, and Arnold made so much money that he was able to make his first real estate investment.

And this is where he really starts getting rich.

Although not at first, Arnold and Franco initially bought 10 acres of land for $1,000 in a place called Antelope Valley because they'd heard a new supersonic airport was set to be built there.

Now, the airport never materialized, but it didn't stop Arnold investing.

But he was learning, he became smarter.

He noticed a building owner had paid him and Franco $10,000 to renovate a house that the owner had bought for $200,000 and sold for $300,000.

So he spotted where the profit was.

He began investing in property himself to renovate and flip, you know, buy and then sell.

In 1974, he spent his entire savings of $27,000 as well as a $10,000 loan from Reader as down payment for a $215,000 six-unit apartment building.

Three years later, he made a $150 grand profit on the building and immediately invested that money into another building, double the size with 12 units.

And then in 1977, he invested $70,000 from the Pumping Iron documentary to buy another building with a real estate developer.

Yeah, and that paid for itself almost immediately.

When they flipped it, they reinvested in his city block in Santa Monica and another one in Denver.

Meanwhile, Arnold traded up his 12-unit apartment building for a 31-unit one, and he just kept developing, trading up buildings, buying more and more apartments and offices across Los Angeles.

Arnold writes in his autobiography: By the time Ronald Reagan came into office in 1981 and the economy slowed, I'd achieved another piece of the immigrant dream.

I'd made my first million.

So at the dawn of the 1980s, he's a millionaire property tycoon, but it's the next decade that will see Arnold Schwarzenegger become one of the highest paid actors in the world.

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So by the start of the 1980s, Arnold Schwarzenegger was making millions from real estate, and soon he'd be making millions from the movies, too.

He seemed fully committed to the American dream.

You bet, in 1983, Arnold became a U.S.

citizen, setting the stage for his later move into U.S.

politics.

But he already had deep connections to the heart of U.S.

politics.

That's because he was dating Maria Shriver, niece on her mother's side of the former president John F.

Kennedy.

Her father was from another U.S.

political dynasty, the Shriver family, and he'd even been the Democratic candidate for vice president in 1972, so big political clownness.

Arnold had met Maria at a tennis event in 1977, where he recalls he blurted out to her mother, Your daughter has a great ass.

Not the finest beginnings for a relationship, I would say, but you know, it worked.

They moved in together around the time of her uncle Teddy Kennedy's 1980 presidential run, but they didn't tell Maria's parents, who were very conservative about such things.

The couple even rented and furnished a separate apartment so that when her parents visited them, Maria could invite them over for lunch there without arousing any suspicion.

The couple would eventually marry and have four children together.

Early on, Arnie told Maria, one day I'm going to make a million dollars for a movie.

And he soon signed a deal that guaranteed him just that for the film that made him an action star, Conan the Barbarian.

Arnie was actually paid only $250,000 for the film, but his contract signed him up for four sequels and he was due a million for the second, two million for the next, so on, plus 5% of the profits.

The five films would be worth a minimum of 10 million to him over the next 10 years.

Arnold actually cut the deal for the films in 1977, but it took a while for production to get off the ground.

But when the film came out in 1982, it was a hit.

So the sequel was quickly greenlit and Arnold got his first million dollar paycheck for a film when Conan the Destroyer came out in 1984.

Now that film wasn't quite the success the studio had hoped, so it earned considerably less than the original and further sequels got lost in development hell.

And Arnold's first movie franchise was over just after two installments.

But by the time Conan the Destroyer was released, Arnold had already filmed perhaps his most iconic role, one that would spawn far more successful sequels.

It is, of course, the film alluded to in this episode's opening sequence.

It was, of course, the Terminator.

Arnold actually only has 17 lines in The Terminator, another great pub quiz question, 100 words of dialogue, including the iconic I'll be back, which he argued should be I will be back.

Arnold got $750,000 for the role, described it as the movie that allowed him to be considered for parts that weren't purely based on his physique.

I would say it's probably about 70% based on his physique.

Now, The Terminator was a huge success.

It took around $80 million worldwide, and that began a string of hits that enabled Arnie to double his film fee every couple of years.

So, after the $750,000 he made for The Terminator in 84, he made one and a half million for Commando in 1985.

And by the time Predator came out in 1987,

great sci-fi film, he was up to $3 million.

And then for The Running Man, also a good film,

$5 million.

And by the 90s, he was commanding eight-figure fees.

So Total Recall in 1990 got him $10 million.

Do you like that one?

I love Total Recall.

It is such a fun film.

And by the time the first Terminator sequel came out in 1991, he made $14 million.

So that's a lot of money.

But as we know from previous episodes of Good Bad Billionaire, about filmmakers like George Lucas and Peter Jackson, you can make a lot more money in movies if you can get what they call points on the gross.

In other words, you get a percentage of the money the film makes at the box office, like right off the top.

And Arnie managed to cut exactly that kind of deal on a high-concept comedy released in 1988.

It was the movie Twins.

So Arnold, along with his co-star Danny DeVito and the director Ivan Rietman, agreed to forego a fee in exchange for a percentage of the box office.

And as Arnie could then command the biggest fee of the three, he took the biggest slice of the box office.

He took 20%.

Now that film took $200 million.

And in 2025, Arnold confirmed that he'd made at least $40 million from it.

Wow, that is not bad for a film about

two unlikely twins.

Now, Arnold has gone on to star in around 50 films, with Forbes magazine estimating in 2024 that he's pocketed roughly $500 million from his movies.

So movies have made Arnold half his billion.

But let's figure out where the rest of his money comes from.

There are of course many ways a film star can cash in on their celebrity.

One quick and easy method for Arnold to make more money was by appearing in international adverts.

He was paid as much as $5 million per ad to featuring commercial things like instant noodles, canned coffee, beer, Japanese vitamin drinks.

I've seen that and it is absolutely nuts.

I have no idea how you would even describe it.

I think it really flexed Arnie's acting abilities in that one.

Okay, right.

I'm intrigued.

I'm going to have to go and look at that now.

But there were more complicated ventures for Arnie as well.

You know, in 1990, he was approached by a couple of businessmen who wanted to set up a movie-themed restaurant chain they would call Planet Hollywood.

I remember it well.

Yes, well, Schwarzenegger was the first actor to sign up and invest, and he would be joined by fellow action stars Sylvester Stallone and Bruce Willis, and Willis's then-wife, Demi Moore, to launch the chain's first restaurant in New York in 1991.

So, plenty of star wattage there.

Planet Hollywood made a pretty big splash and soon started an aggressive expansion with locations across the US, franchises around the world.

The company went public with an IPO in 1996.

That's when you sell your shares on the stock exchange to the general public.

That valued Planet Hollywood at $2.8 billion.

Now, Schwarzenegger was only ever a minority shareholder, but has said at one point his stake was worth $120 million on paper at least.

however planet hollywood's popularity tanked it filed for bankruptcy in late 1999 and swarzenegger sold off his shares shortly after he said he did fine financially thanks to protections negotiated into his deal but he never saw anything like the 120 million dollars it was worth at one stage yeah it's a real cautionary tale for companies going public on one day you could be worth 2.8 billion dollars and the next day you're a punchline and a joker yeah Planet Hollywood was just the most high profile of Arnold's many ventures because throughout the 90s he'd been making bigger and bigger investments because he was determined to make the most of his movie star earnings.

He wrote in his autobiography, I always felt that the most important thing was not how much you make, but how much you invest, how much you keep.

I never wanted to join the long list of famous entertainers and athletes who wiped out financially.

Now a crucial figure in Arnold's financial dealings and success is the investment banker, a guy called Paul Wachter.

Having already established a relationship with Schwarzenegger, Wachter founded something called Main Street Advisors in 1997 with the sole purpose then of helping Arnold Schwarzenegger handle his money.

Now that firm since expanded to advise other celebrities, people like LeBron James, we've got an episode on him, Billie Eilish, not one for her yet.

But for a while, it was focused solely on expanding Schwarzenegger's capital.

And one of Arnold's boldest investments of Wachter came in 1997 when he purchased a Boeing 747 plane for $147 million.

He put down 10 million up front and then leased Jajumbojet jet to Singapore Airlines.

Weird, what a weird thing to do.

I know, but I guess if you're talking about multiple millions, maybe buying a jumbo jet is just the kind of thing that you do.

Now, Paul Wachter has actually admitted that the plane deal wasn't the huge hit they anticipated.

And this was in part due to a decline in airline values after the 9-11 attacks in 2001.

But there were other investments from that period that really did pay off.

Here's a much better and more sensible and more understandable investment.

He bought stock in Starbucks in the 1990s and still owns some of that today.

Those shares are now a hundred times more valuable than they were before it became a global coffee phenomenon.

He also invested, now this is smart, he invested early in Google.

He put money into Google's Series A round of stock.

That's one of their first fundraising efforts in 1999.

He sold those shares for a big profit and has since reinvested some of that profit back into the company.

Now that obviously one of the best investments.

Boy, I wish I'd done that.

However, his most significant investment under Wachter's guidance was in a mutual fund company called Dimensional Fund Advisors, which would go on to become his most valuable asset.

Now, I have to confess, I don't quite understand what a mutual fund company is.

Okay, so you can, when it comes to investing, you can either buy shares in an individual company, let's say Google.

Google, for example.

or you can buy into a fund which owns lots and lots of different shares.

So you're not actually making the decision about, I think this one's going to do well, I think that one's going to do well.

You're buying into a fund which is run by a manager who's an expert in these things, supposedly, and the fund charges you a fee every year for

being a member of that fund.

So you get your returns and they take a small piece of it.

And what happens is these funds can get incredibly big.

So that small slice that the fund charges you can become a massive number.

And the fund itself, the company that runs it, becomes very valuable in its own right.

And that's what he bought bought a slice of.

Right.

So I guess Dimensional Fund Advisors must have been a really successful fund to have made Arnie all that money.

Yeah, it was founded by two men who'd spent time at the University of Chicago.

And University of Chicago is where basically the ideas of Milton Friedman, the free market guy we talked about, he'd been a professor there.

They love Milton Friedman.

Arnie had called Milton Friedman his intellectual idol.

He was easily convinced.

So Arnold bought just under 5% of Dimensional Fund Advisors for an undisclosed sum in 1996.

And that stake would take Arnold a long way to becoming a billionaire in the 2020s.

But before he took that step, let's look at another sharp career turn into politics.

So bodybuilding, film stardom, investing, and then politics.

You can say what you like about Arnold Schwarzenegger, but he doesn't do anything by halves.

So in the early 2000s, he didn't just dabble.

He took on a major political office when he became governor.

of California.

And you remember, even though he was married into two big Democrat families, Arnold was avowedly on the other side of the political spectrum and he stood as a Republican.

Super interesting.

I wonder what the Sunday lunch sits around the table says.

I mean, Thanksgiving must have been a minefield.

Exactly.

Remember, he'd originally arrived in the U.S.

during the final weeks of the 1968 presidential election and says watching the Republican victor Richard Nixon in a debate made him declare himself a Republican.

As he became famous in the 80s, he'd campaigned on behalf of the Republican president George Bush Sr.

and later visited the president at Camp David.

He actually met Richard Nixon in 1991 and it was the former president Weirdley who first told Arnold that he should run for governor because you can be governor of a state if you're born outside the United States.

But crucially you cannot be president.

As Elon Musk knows only too well and who knows Arnie could have been president had he not been born in Austria.

Well by 2002 in any case Arnie was ready to run but he had the small matter of a world record foam contract to complete.

The year before he'd negotiated an enormous deal to make Terminator 3 Rise of the Machines.

He would be paid 30 million up front.

He'd get an incredible 20% of the net of everything the film made.

And as it took $430 million at the worldwide box office, the film is estimated to have made Arnie well over $120 million.

Even though, due to the cost of production and publicity, it barely made the studio a penny.

Well, he actually took most of the money.

That's interesting.

The point is, he's in a pretty strong bargaining position.

He can't say, I think we'll get someone else for this role.

No, exactly.

He's basically made himself an unkillable character.

Terminator 3 came out in summer 2003.

So Arnie was unavailable to stand in the 2002 California gubernatorial.

That's the governor's election.

But an unexpected recall election in late 2003 gave him the opportunity he wanted.

Although his financial advisor, Paul Wachter, estimated that if he was successful, serving two terms in office would cost him more than $200 million in earnings.

But he stood.

And like another businessman turned politician you may know about, he used his personal wealth as a selling point.

When he announced his candidacy on the Tonight Show with Jay Leno, Schwarzenegger said, I have plenty of money, no one can pay me off, trust me, no one.

But Arnold soon found a scrutiny on a politician actually far outweighed that on even the biggest Hollywood star.

So days before the election, the LA Times published a story on accusations that Arnold made unwelcome advances towards women dating all the way back to the 1970s.

There were also reports surfacing that his father, Gustav, had a bigger involvement in the Nazi party than had previously been reported on.

But he got some significant backing, including from his mentor Warren Buffett, who was named a senior economics advisor on his campaign, despite being a Democrat.

Arnold won the election and of course became the governator.

He won a second term too.

And although for eight years he led a state with a GDP of almost $2 trillion, that's in 2011, his political career is not how Arnold Schwarzenegger became a billionaire.

So that's not the story we're here to tell.

In fact, while in office, Arnold didn't take a salary and he put all his holdings into a blind trust managed by, of course, Paul Wachter.

So if you've never heard of this term before, let's explain what exactly is a blind trust.

So when you take office, there is a danger or there's a perceived risk that will use your policy-making power in a way beneficial to your own investments.

So what you do is you put your money and give it to someone else to look after so that you can't make any decisions.

You're not making your own investments and in fact, you don't even know what's being done on your behalf.

Therefore, your policymaking and your personal financial interests can't clash or, you know, help each other.

Although Wachter told Forbes about a conversation he did have with Arnold at a Los Angeles Lakers basketball game around the time the market crashed in 2009.

So mimicking his mentor, Warren Buffett, who believes in holding things for the long term, Arnold apparently said, you better not be selling anything.

Wachter wasn't.

And in fact, Arnold's assets grew in value in his absence.

But it was an event the day after he left office that led to him losing a big portion of his fortune.

That's because the morning after Arnold became a private citizen again in January 2011, his wife, Maria Shriver, confronted him about an uncanny resemblance to a child that they both knew.

Now, it turned out that in 1996, Arnold had had an affair with Mildred, his housekeeper, of 20 years.

She'd even had a son, Joseph Bayena, who Arnold didn't at first know was also his.

But as he'd grown to look more and more like a Schwarzenegger, both he and Maria suspected that he was.

And having looked up pictures of Joseph Bayana, I mean, the resemblance is pretty uncanny.

It must be quite funny to see this child suddenly growing into a version of Arnold Schwarzenegger.

Pretty unmissable, I would say.

Yeah, I mean, it's pretty, pretty undeniable.

Anyway, Maria decided they needed to separate.

Their divorce was finalised in 2021.

The settlement was never made public, but it's unlikely the pair had any kind of preen-up back in those days.

So under California law, they probably split their assets 50-50 so without his divorce Arnold could have been worth nearly double what he is today.

One positive for Arnold is that he has since built a relationship with that son Joseph.

So not all bad and although the scandal of his fathering a son out of marriage derailed some movie projects he soon started making action films again.

I love how action films are the ones that don't care about having an illegitimate child.

After an uncredited cameo in The Expendables which was shot while he was still California governor he had major roles in The Expendables 2 and 3 and Escape Plan, all co-starring with his pal, Sylvester Stallone.

More recently, he hosted a series of The Apprentice USA, largely regarded as an unsuccessful replacement for Donald Trump, much to Trump's delight, as you can imagine.

He also starred in the TV series for Netflix, Fubar, and has made many more millions from product endorsements and commercials.

But he's also continued refining his investment portfolio.

In 2013, he sold off a commercial building in Venice Beach he'd bought for around $12 million in the 80s for roughly triple the original price, having earned millions in rent in the meantime.

A good investment.

He's got a production company, Oak Productions, that he founded in the 1970s.

He owns a three-day-long bodybuilding and strength convention.

And last year, he launched a fitness app with a connected podcast.

He's also invested in TV channels AMC and the Yes Network and in vegetarian food producer Beyond Meat.

But the biggest reason he was named a billionaire by Forbes magazine in 2024 is the stake he bought in that mutual fund, Dimensional Fund Advisors, back in 96.

Now, when Schwarzenegger first got involved they managed around 12 billion dollars in assets today that is up to 777 billion dollars and arni's stake is worth at least 500 mil so add that to the half billion he's made from entertainment and he is easily a billionaire so now at the age of 78 despite undergoing several open heart surgeries and having a pacemaker installed arnie is still making his tv show and has several film projects in development including a possible neoconan movie Surely not.

Conan the octogenarian.

I mean it has a certain ring to it.

He will be back, but come on, let's judge Arnie.

So on the show, we judge all our billionaires on a number of categories, from wealth to philanthropy to controversy, and we rate them from zero out of ten.

So let's start with wealth.

Just how rich is Arnold Schwarzenegger?

He's estimated to be worth $1.2 billion.

Probably would have been a lot more if not for his decision to go into politics and Maria Scharber's decision to divorce him.

He owns an estimated $40 million in real estate, including a ski getaway in Sun Valley, Idaho, and a seven-bedroom mansion in Brentwood, California.

But in terms of, you know, absolute wealth, he's kind of entry-level, isn't he?

He is entry-level.

Like you say, he's just barely making it into the ranks of billionaires.

But there's something larger than life about Arnie.

Oh, definitely.

And I think part of the category for wealth is we judge them on their journey to a billion.

And he has had quite the journey, you know, from growing up in a household where you had to get water from a well and doing 200 sit-ups a day to being the governor of California, being a billionaire.

And also, I don't know if you follow him on Instagram, but he has a very cute donkey that he spends a lot of money and time with.

I've not seen the donkey.

But also, there's something about Arnie's story.

He's He's a self-confessed disciple of the American dream and actually refers to his own life as being a great example of it.

So it's quite the story.

So I think in terms of, you know, the rags to riches element of it, it is, like you say, worthy of a movie in its own right.

Yeah, I mean, I would give him a seven out of ten for wealth.

So you're getting him seven.

Okay, I'm going to give him a six because he is only entry-level.

And also, on our kind of how to spend it radar, a donkey is possibly the least billionaire blingy thing we've ever heard anyone spend any money on.

Well, you know, I'm a fan of the donkey.

But let's talk about philanthropy.

So Arnie's been involved with the Special Olympics since 1979.

It was actually founded by his former mother-in-law, Eunice Shriver, when he was...

So he had to put some money in there.

Yeah, so he had to.

He was named Global Ambassador for that.

He's also been a supporter of the Simon Wiesenthal Center for over three decades, to which he's donated $100,000 in 2017.

In the aftermath of some riots in Charlottesville, he also founded After School All-Stars, a large non-profit organisation working to close close the opportunity gap for low-income youth.

You know, he's given $1 million to frontline responders during the pandemic.

He also, and I kind of love this, he hosted an Oktoberfest poker-themed dinner party in 2023, which raised $7 million for his after-school clubs.

He enacted some major environmental policies when he was California governor.

And since the end of that governor term, he's continued that environmental work.

He founded the Schwarzenegger's Climate Initiative and promoting state and local clean energy efforts through the Schwarzenegger Institute at the University of Southern California.

And he hosts an annual climate conference in Vienna, which brings together environmentalists from more than 80 countries.

So this all sounds good, but I'm totting this up.

100 grand here, million there, 7 million.

That was not his own money.

He just raised that.

Out of over a billion, which remember is a thousand million dollars.

Yeah, I knew you would do this because initially I was impressed by the whole range of efforts.

But yeah, you are right.

Add it all up.

I'm not sure it's huge.

So I would give him maybe a four out of ten.

I'm going to give him a three.

Well, Arnie's consistently scoring low for you and higher for me.

So let's talk about controversy.

What has Arnie got into hot water for?

There were allegations of sexual misconduct that surfaced during his first run for governor in 2003.

Arnold apologised and later admitted in a 2023 documentary on Netflix that he'd gone over the line with women multiple times.

And also during President Donald Trump's hush money trial, the former National Enquirer publisher David Pecker said that he had a similar arrangement with Arnie to the one he had with Trump's team, in which he promised to bury bad stories with Arnold when he was running for governor.

Now, Pecker claimed that as many as 40 women approached American Media Inc., the then owner of the National Enquirer, with claims about the candidate.

He added that he shelled out hundreds of thousands of dollars to keep the stories out of the National Enquirer on behalf of Schwarzenegger, who at one point was also paid a million dollars a year by American Media Inc.

to promote its fitness magazines.

Arnold, for his part, has not commented on these claims.

So look, you know, he's known to have affairs.

He said, he's admitted that he's crossed the line with women multiple times.

We don't know quite what that means.

But we're not really here to pry into someone's or moralise about someone's private life.

So,

you know, the kind of controversies we have seen are things when, you know, massive corporate

malfeasance, doing people over, fraud, drug dealing, blah, blah, blah, blah, blah.

We've come across an odd billionaire.

He's not on that register at all.

So I'm going to give him a one for controversy.

Yeah, I would rate him maybe slightly higher just because, you know, I do feel like trying to bury bad press in your electoral run does kind of strike me as being a little bit fishier.

Right, you've nudged me up to a two as well.

I would say, I think, three out of ten for me.

Oh, three for you, two for me.

Power and legacy.

Well, I mean, there's so many strands to this one, isn't there?

Of course, the one-point leader of California.

In 2025, for example, the size of California's economy overtook Japan's.

Japan's.

An entire country.

You know, an entire rich country, making the U.S.

state the fourth largest global economy.

So he's definitely, at one point, was a very powerful figure being governor of a state of that size.

Now, his governorship has had mixed reviews, but Arnold did shape California politics for decades to come.

And he did this by passing initiatives such as how legislative districts are drawn by an independent commission instead of by the legislature itself.

That's really important, that thing, about an independent body to draw the legislative districts.

You know, enshrining that in an independent body is a pretty good thing for democracy, probably.

Yeah, the old saying is whoever designs the election system gets to decide the result.

Yeah.

So that's pretty good.

He's rowed publicly with Donald Trump.

Those are all interesting things, but to me they don't scream power and legacy.

No, I mean, what?

I think he's got more of a legacy in the world of bodybuilding, perhaps.

Yeah, and a legacy in movies.

I mean, this guy was the most recognizable action star for decades.

Bigger than Sylvester Stallone, bigger than Bruce Willis, I would say.

Yeah, if you were making an action movie now, you would want to say, I want it to be his biggest terminator, wouldn't you?

You know, it's sort of kind of a benchmark action movie for success.

So, power and legacy, I'm going to score him pretty low because I don't think in the wider world, but in the fields of bodybuilding and smash hit action movies,

I'm going to give him a nine for that, a three elsewhere, so I'm going to give him a five.

Oh, I think Arnie is one of the last great action heroes.

Even though I'm still not entirely convinced he can act that well, I'm going to give him an eight out of ten.

Okay, wow, okay.

So Arnie's story is fascinating.

He's obviously world, you know, incredibly famous, but he's also lived the American dream.

He's lived that life.

And so that's a fascinating story.

And you know what?

He seems like a pretty good guy.

He does this trick when he goes to interview people.

I've seen it with some of my colleagues who've met and interviewed him.

They go and shake his hand.

He always goes, ow, ow, ow, as if they've crushed his hand.

It's a rather charming thing he does.

So it may be hackneyed.

He may have done it a few times, but I like it.

I will say that out of all the people that we've covered, Arnie is maybe the person who has kind of almost come the furthest.

You know, we've done Oprah, another showbiz billionaire who was born American in poverty and became Oprah Winfrey.

But that journey from growing up dirt poor in Austria, coming over to America with nothing and literally building through your muscle alone, a new life for yourself.

There is something that is just, I mean, it's iconic.

That's what it is.

Yeah.

So he's definitely iconic, but is he good, bad, or just another billionaire?

What do you think?

Email goodbadbillionaire at bbc.com or drop us a text or WhatsApp to 001-917-686-1176.

Tell us what you think.

That is goodbadbillionaire at bbc.com or text or WhatsApp us on 001-917-686-1176.

Don't forget to include your name in where you are messaging or calling us from, as we may read out your message on a future episode.

So, who's who have we got next episode?

Well, we have a fascinating woman, the founder of a Russian company that I guess you could compare to their version of ASOS or Amazon.

And Russia's richest woman?

Yes, she is.

She's also Russia's first self-made female billionaire.

This is Tatiana Kim, the founder of Wildberries, and a really interesting tale set against some big political and financial movements in Russia over the last 20 years.

That's Tatiana Kim.

Next episode.

Good, Bad Billionaire is a BBC World Service podcast produced by Mark Ward.

The researcher is Maria Noyen.

The editor is Paul Smith and it's a BBC Studios audio production.

For the BBC World Service, the commissioning editor is John Minnell.

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