Would You Bet Your Salary on Yourself?

Would you take a low or no salary to bet big on yourself?

That's what commonly happens in Hollywood due to unique and varying circumstances, but it's worked out very well for some actors.

In 1988, Arnold Schwarzenegger wanted to star opposite Danny DeVito in the movie Twins. The studio thought Arnold wasn't a fit and couldn't pull it off; after all, he was Conan and the Terminator at this point, so how was he going to be funny? But Arnold knew he had the chops to get it done, and in order to convince executives in Hollywood, he took a zero salary on the upfront of the movie in exchange for profits on the back end.

Arnold ended up making over $40M by doing what is known as "taking points," and he's not alone.

Jack Nicholson took a low $6M salary on Batman in exchange for points and pocketed over $60M.

When Forrest Gump ran into production budget issues, Tom Hanks reduced his salary in exchange for points, and he took home almost $70M.

The greatest points story though? Alec Guinness, also known as Obi-Wan Kenobi in the original Star Wars, took a salary of $150K in exchange for points. Why? He thought Star Wars would be a colossal failure, and as a classically trained actor who already owned an Academy Award for Best Actor, a BAFTA, a Golden Globe, and a Tony, in addition to being nominated for an Emmy and a Grammy, he didn't want to put his name to a movie about a space opera. So to convince him, George Lucas agreed to give him part of his points and royalties. Guinness ended up earning over $95M over time due to the success of the movie and the merchandising. Oh, and he only spent twenty minutes on screen, which equates to about $4.75M per minute.

Another example of an actor betting on themselves was when Jonah Hill took the role in The Wolf of Wall Street for the Screen Actors Guild minimum of $60,000. He was desperate to work with Martin Scorsese and knew it would pay off in his career later. He ended up earning an Academy Award nomination and raised his price on future movies.

The list of Hollywood actors who took a gamble on themselves in order to earn big on the back end is long, and it begs the question: would you do it?

Confidence in yourself is easy when someone else is absorbing the risk. Real confidence shows up when you are willing to put something of your own on the line.

In some cases, if you work for a startup, then you are already betting your current comp on the future with your equity, but would you intentionally take a deal that was a haircut on salary to earn points on your overall performance later?

I think most people like the idea of betting on themselves right up until they see what the bet actually costs. It sounds great when the risk is theoretical. It becomes much harder when the number on the paycheck drops, the guaranteed money disappears, and the outcome rests on your ability to deliver.

Confidence in yourself is easy when someone else is absorbing the risk. Real confidence shows up when you are willing to put something of your own on the line. Maybe that means accepting more variable compensation. Maybe it means leaving a comfortable job to build something. Maybe it means taking a smaller title at a better company because you believe you can climb faster once you get inside.

There is an important difference between betting on yourself and making a reckless decision. Arnold Schwarzenegger already knew he could be funny. Jonah Hill understood exactly what working with Martin Scorsese could do for his career. They were not blindly throwing money on the table and hoping things worked out. They saw something in themselves and in the opportunity that other people either could not see or were unwilling to price correctly.

The best bets on yourself usually happen when your confidence is supported by evidence. You have done the work. You know your ability. You understand the opportunity, and you believe the potential upside is worth more than the certainty you are giving away. At some point, however, all the evidence in the world still requires you to make the decision and live with it.

You may never be offered points on a Hollywood movie, but you will be given plenty of chances to choose between guaranteed comfort and a larger opportunity. Most people will take the guaranteed money and explain why it was the responsible decision. Sometimes it is. The bigger question is whether you believe in yourself enough to recognize the moment when taking less today could give you far more tomorrow.