Muhammad Ali’s Money

Muhammad Ali was a local legend in southwest MI.  The former heavyweight champion moved to Berrien Springs, MI towards the end of his boxing career in 1975.  He owned an 85 Acre estate on just under a mile of the St. Joseph river.  I currently live about 7 miles from the Ali home.  When I was a kid, I think I may have been in first grade, maybe second, around 1992, Muhammad Ali came to our school during a large assembly for the dedication of the new gym that was built for our school district.  He talked and joked around with the kids and signed a couple boxing gloves that were given out to a student who won them in a drawing.   Why did Muhammad Ali choose to live in a small farming community of under 2,000 people far away from the big cities that most celebrities choose to live in?

Why Did Muhammad Ali Live in Southwest Michigan?

When looking at real estate,  your money goes a LOT further in the Midwest. farming acreage tends to go for around $3,000 per acre.  Although there is a premium to be paid for riverfront property, the premium was much lower in the 70s. It is believed that Ali originally paid $400,000 for the property.  The St. Joseph river is no Lake Michigan,  but the peninsula that Ali’s home is on provides privacy, water access, and stunning views.     In 2003 Ali listed his home here in southwest MI for sale and started working on moving to Arizona to help with his Parkinson’s disease.  He listed his property for $3.2 Million.  According to current property records in our county the home is still owned by his wife.

In an attempt to verify the original purchase price of the Ali home I looked up the deed in our county records.  Unfortunately, the deed has the purchase price listed as one dollar, so this was no help.  I then searched for the names of the people he purchased the property from and found this newspaper article from 1975 confirming the $400,000 figure.  $400,000 in 1975 adjusted for inflation would be $1,778,892.

Ali Berrien Springs Home

The St. Joseph river is approx. 206 miles long and drains into Lake Michigan in St. Joseph, about 7 miles from Ali’s home.  The river’s average width is around 300′. Michigan has beautiful summers and falls, and the sunsets over Lake Michigan can’t be beat.  Some of the best fruit grown in the world comes from Berrien County, MI, and property prices are fairly inexpensive.  If it wasn’t for our harsh Winters, southwest MI would be one of the most ideal places in the world to live.

The Ali Family Home:

Muhammad Ali's house

The Ali Family Home in Berrien Springs Michigan is on a peninsula and is composed of 85 acres with about 1 mile of frontage on the St. Joseph river.  From Google Earth you can see there are multiple structures on the property and mature trees lining the river all around.  When Ali listed his house for sale in 2003 his realtor had this description: 

Features on the estate, include a three-bedroom, approximately 3,500-square-foot house that was built in the 1920s; a two-bedroom guest house with a library; a 4,000-square-foot office building; gymnasium with a regulation-size boxing ring; four-car garage; two barns; swimming pool; tennis courts; sports court; a dock and a man-made brook with waterfall, Iwamoto said. Ali has owned the estate for 27 years. “This estate is very secluded,” Iwamoto said. “And it’s set up so perfectly for someone who’s interested in sports. There’s the gymnasium, there’s a sauna, there’s a table for rubdowns, there’s a boxing room and there’s every sort of exercise equipment imaginable.” The house has ivory-colored marble, maple paneling and stairs, recessed lighting and arched ceilings, Iwamoto said. The living room, on the main level, is 36 by 39 feet; the lower level has a heated Mexican tile floor.”

The 3 lots the Ali’s own have a total 2016 assessed value of $1,150,100. In Michigan the assessed value is half of the presumed market value, meaning the local assessor believes the property to be worth around $2.3 Million.  Because of the limitation of Prop A, which limits yearly property tax increases to 5% or the rate of inflation, the Ali homestead has a total taxable value of $809,754. With a local millage rate for Oronoko township of 24.76 the Ali’s tax bill for this year would be $20,500 if it were their primary residence.  Since they moved to Arizona, it is most likely not homesteaded, which would then add another 18 mills to their property taxes, bringing their yearly total to $34,650. For someone reported to be earning $4 million to $7 million per year, the property tax expenses for this property are very low.

This is a very nice property, but not what you would expect from a celebrity of his status.  His home would look very modest compared to the athlete’s homes we saw on the MTV show Cribs.  By living in a low cost area he enjoyed a very nice secluded property, which afforded him a private life and the yearly fixed costs of it are much lower than what a higher cost home would be. Even though Ali was one of the biggest celebrities in American history, he was able to live a normal life here.  After a while when everyone in a small town knows you, it is easy to live a normal life.  In a larger city, I don’t think he would have had that option.

Community Involvement:

Muhammad Ali and his wife Lonnie did a lot for the community.  They donated money frequently to the local school systems and to high school sports teams, including to the new gym in my school district back in 1992. Here’s a picture one of my friends from school recently posted on Facebook from that day: Ali Coloma School

I came across this article from 2007 when the Ali’s were moving to Arizona. The article shows some of the work they did to support our community.

In the Niles area, they donated “a significant amount of money” to create a pair of baseball fields, said Doug Law, superintendent of the Niles Community Schools. Residents perhaps aren’t aware that they’ve been responsible also for such donations as students’ shoes, prom tickets, calculators and athletic warm-up apparel. They even chartered a bus for a club to take a field trip, Law said, but the recipients weren’t aware of it because the Alis asked to remain anonymous. “That’s one of the beautiful things about the Alis,” he said. “When Lonnie Ali would become aware of an issue, she’d call and say, ‘Is there something we can help with?’ “There are hundreds of kids that the Alis have helped and they had no idea who it was from.””

In reading articles about Ali in order to write this post one of my favorite quotes was published by our local radio host.

Jeff Hoover used to work for Mid-West Family Broadcasting before moving on to the big time with WGN Television in Chicago. He shares a great story of meeting the Champ:

I’ll never forget meeting Muhammad Ali. I was in my early 20s working at a video store in Benton Harbor, Michigan and a customer came in and said that Muhammad Ali was outside in the parking lot. I couldn’t believe it. I grabbed a pen and some paper. To me, Ali was the greatest. I ran up to him just as he was about to get in his car and asked him for an autograph. His hands were shaking. He concentrated very hard. His signature was very difficult to read but it was still Muhammad Ali’s. He looked at it, crumbled it up and started again. He did this over and over for five minutes. Finally he liked what he saw and handed me his autograph and gave me one of the biggest smiles I’ve ever seen. His determination throughout his entire life truly inspired me and the world. Rest in peace, Champ.”

Muhammad Ali demonstrated as much strength battling a debilitating disease as he did battling opponents in the ring.

Muhammad Ali’s Money From Boxing:

During Muhammad Ali’s time as an active boxing champion, the paydays were nothing near what they are today.  Ali ended his career with a fight record of 56 wins and 5 losses, and made a total of well under $100 million. There was no pay per view,  there was no internet marketing,  and the boxers did not control every aspect of the fight like Floyd Mayweather does with his promotion company.  This isn’t to say that there wasn’t any money in boxing.  Muhammad Ali’s pay for his top fights was:

  • 1960 1st pro match $2,000
  • 1971 “Fight Of The Century” Against Joe Frazier $2.5 Million
  • 1974 “Rumble In The Jungle” Against George Foreman $5.45 million
  • 1975 “Thrilla In Mannila” Against Joe Frazier $9 million
  • 1980 “The Last Hurrah” Against Larry Holmes: $8 million

Keep in mind just because a fighter won that much money, doesn’t mean he gets to keep it. Adjusted for inflation, it looks like his highest payday was the 1975 Thrilla in Mannila fight, which would today be worth around $35 million. Boxers also pay a large cut to their managers and promoters.  It’s highly likely that after paying those people and his taxes Ali walked away with somewhere around 25% of his winnings.

I found a full list of prize fight money on an old message board, but I could not double verify its authenticity.  The numbers appear to match up with the above totals I found in newspaper archives and clippings.

  • 29/10/60 vs Hunsaker $2000
  • 27/12/60 vs Siler $200
  • 17/01/61 vs Esperti $545
  • 07/02/61 vs Robinson $645
  • 21/02/61 vs Fleeman $913
  • 19/04/61 vs Clark $2548
  • 26/06/61 vs Sabedong $1500
  • 22/07/61 vs Johnson $6636
  • 07/10/61 vs Miteff $5644
  • 29/11/61 vs Besmanoff $2048
  • 10/02/62 vs Banks $5014
  • 28/02/62 vs Warner $1675
  • 23/04/62 vs Logan $9206
  • 19/05/62 vs Daniels $6000
  • 20/07/62 vs Lavorante $15,149
  • 15/11/62 vs Moore $45,300
  • 24/01/63 vs Powell $14,331
  • 13/03/63 vs Jones $57,668
  • 18/06/63 vs Cooper $56,098
  • 25/02/64 vs Liston $464,595
  • 25/05/65 vs Liston $361,819
  • 22/11/65 vs Patterson $300,078
  • 29/03/66 vs Chuvalo $66,332
  • 21/05/66 vs Cooper $448,186
  • 06/08/66 vs London $290,411
  • 10/09/66 vs Mildenberger $211,576
  • 14/11/66 vs Williams $405,000
  • 06/02/67 vs Terrell $585,000
  • 22/03/67 vs Folley $275,000
  • Exile: April 1967 – September 1970
  • 26/10/70 vs Quarry $580,000
  • 07/12/70 vs Bonavena $925,000
  • 08/03/71 vs Frazier $2,500,000
  • 26/07/71 vs Ellis $450,000
  • 17/11/71 vs Mathis $300,000
  • 26/12/71 vs Blin $250,000
  • 01/04/72 vs Foster $200,000
  • 01/05/72 vs Chuvalo $200,000
  • 27/06/72 vs Quarry $500,000
  • 19/07/72 vs Lewis $200,000
  • 20/09/72 vs Patterson $250,000
  • 21/11/72 vs Foster $260,000
  • 14/02/73 vs Bugner $285,000
  • 31/03/73 vs Norton $210,000
  • 10/09/73 vs Norton $535,000
  • 20/10/73 vs Lubbers $200,000
  • 28/01/74 vs Frazier $1,715,000
  • 30/10/74 vs Foreman $5,450,000
  • 24/03/75 vs Wepner $1,500,000
  • 16/05/75 vs Lyle $1,000,000
  • 30/06/75 vs Bugner $2,100,000
  • 30/09/75 vs Frazier $6,000,000

Muhammad Ali’s Money From Endorsements:

Unlike Floyd Mayweather, Ali did not shy away from endorsement deals.  He had some endorsements, but was not constantly seeking them out.  Here’s a list of some of the endorsement deals I have found that Ali participated in:

  • d-CON roach traps
  • Ovaltine
  • Under Armour
  • Toyota
  • Adidas
  • AE
  • Mr. Porter

I was unable to find exact figures on how much money Ali makes (or has made) from each individual deal.

Muhammad Ali’s Money From Other Sources:

In the 1970′s Ali starred in a couple movies and made a few TV appearances.  His two movies were the autobiographical The Greatest in 1977, and Freedom Road in 1979.

Muhammad Ali received royalties from several books he has co-written or written, including his autobiography, The Greatest: My Own Story.

Ali also gave paid speeches for a while, his profile is still on AthleteSpeakers.com advertising rates in excess of $100,000, the highest tier they have for speakers.  Both his high celebrity status and his low frequency of speaking appearances help to increase the going rate. Both public speaking and endorsement deals were I’m sure hampered by his illness.  I think if Ali had been in great health for the last 30 years he would have made a ton more money.

Muhammad Ali’s Money During Boxing Ban:

While publicly refusing to be drafted to the Vietnam War Muhammad Ali was banned from boxing and stripped of his titles.  The ban lasted for 3 and a half years in the prime of Ali’s boxing career. During this time period the prize fighter still need to earn some income.  What would you do if suddenly your main stream of income dried up? Muhammad Ali gave speeches at colleges and even performed in a short lived Broadway musical.  The really surprising source of income during these times was from Joe Frazier.  Joe Frazier reportedly gave Ali financial help during this time period in addition to his help in publicly advocating for his reinstatement to boxing, despite their rivalry.

Muhammad Ali’s Net Worth:

Muhammad Ali is reported to be worth between $50 million and $100 million.  His endorsement and licensing deal net between $4 million and  7 million per year.  This does not include his 2015 deal with Under Armour. Ali managed all of his revenue from the use of his name, likeness, and trademarks through his company GOAT Inc., which was an abbreviation for ‘The Greatest Of All Time’.  In 2006 Ali earned $50 million by selling 80% of GOAT Inc. to CKX. As with most celebrities tracking down their true net worth is fairly difficult because it is all private money.  With CEOs and business owners it is much easier because the vast majority of their wealth is in publicly traded stocks and the amount of stock they own is a matter of public record.

Muhammad Ali has struggled with Parkinson’s disease for over 30 years.  He has been married 4 times and has several children.  Although it is still too soon to know, I am hopeful that Ali did proper planning and that there is a will to guide what happens with all his wealth. It is also important that while we are living to sit down and let everyone know what they are getting and the rationale behind it.   Such planning is the best gift any of us can give to our loved ones.  It’s amazing to see how bitter and angry people get over even small amounts of money multiple parties feel entitled to when someone passes, I can’t imagine how bad they get when there are millions of dollars at stake. Multiple news articles are already anticipating a fight over his estate.

Muhammad Ali’s life was not about money. He was never afraid to walk away from a dollar. After retiring from boxing he didn’t seek out to monetize every facet of his life, he chose to do a little bit of advertising but he spent far more energy working on local projects for the community he lived in and on a global level working on several charitable causes.   When he was still boxing he was asked by a child what he was going to do with his time, as part of his answer he stated:

“What am I going to do for the next 16 years — what’s the best thing I’m going to do? Get ready to meet God…Owning real estate, going into business, teaching boxers, that won’t get me to heaven,” Ali said. “When I get out of boxing, what I’m going to do, I’m going to do all I can to help people.”

 If you were worth $100 million and world famous, what type of home would you own and where would you live?  

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. Check out the Action Economics archives section for all past posts.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>