Bethenny Frankel's Long History of Hustling—and the Mistake that Cost Her Millions
Money Talks, and so should we. Here, powerful women get real about their spending and saving habits.
It’s been a full decade since Bethenny Frankel first appeared on the Real Housewives of New York City. And while the 47-year-old has grown accustomed to a lavish lifestyle over the years, it wasn’t always socialite-packed events and glamorous getaways for the star. Long before she starred on the Bravo series and founded her Skinnygirl Cocktails empire, Frankel’s family was just scraping by when she was a kid. And it was the questionable financial decisions of the adults around her that ultimately shaped her outlook on all things money.
“I grew up around a racetrack where there was a lot of feast or famine and gambling,” she tells InStyle. “It created what I call ‘money noise.’ My room was completely decorated, but the rest of the house had no furniture in it. The dining table was literally a card table, and my stepfather would be asking me to break into my piggy bank to cover his bets. But then at the same time, we’d have multiple cars in the driveway. It was a very up-and-down type of thing, seeing glamour and limousines but then having nothing.”
While she knew that her family’s financial situation was far from stable, Frankel didn’t put too much energy into thinking about it when she was younger. “I always thought that everything was sort of going to be okay,” she says. But when she headed to college, that changed. “I was pretty much on my own, and that’s when I had to start worrying about money and working. I knew that there was really no one who was ever going to take care of me, so I just had to take care of myself.”
Frankel—who has an 8-year-old daughter, Bryn—has kept the hustle going ever since. And looking back, she believes that her tough childhood helped prepare her for success. “I think it made me hungry, but also somewhat sensible,” she says. “It made me nervous that you could suddenly lose it all.”
Scroll down for more of Frankel’s revelations, from charging admission to house parties in high school (yes, really) to learning how to be taken seriously as a businesswoman.
On her first job… My first job was brief, but it was working at a bakery in Long Island. I wanted to have a party, and I wanted to be able to pay for it, so I did that. Then I worked at two clothing stores in New York City. I used to throw parties and charge people admission in high school, too. I've always been entrepreneurial.
On her first savings account… I think it was the summer of graduating high school. But I was never good at balancing a check book. I found it very tedious to write it all down. Then you balance a check and you have withdrawal fees, and your balance wouldn't line up anyway. I was not good at that.
On her first major splurge… It was years ago, when I was selling pashmina—I was one of the largest initial importers of pashmina, [and my company was] called Princess Pashminas. I purchased a Cartier watch from someone, but then I went broke again. Years later, I purchased a retail-priced, crystal-encrusted Louboutin bag in Dallas when I did my Skinnygirl Cocktail deal.
On finding success with Skinnygirl… l didn’t feel financially independent until the Skinnygirl deal in 2011. Even if people are saving all the time, it's hard to acquire wealth unless you make a pile. It’s easy to have money, spend, and save. But you have to save a lot more money than you think to make a real dent and have security. You have to either be very diligent in saving or investing, or have what I call an event, like a transaction, which is what my Skinnygirl deal was. By the same token, though, it’s expensive to continue to grow a business after your one hit. You have a staff, offices, insurance, and trademark lawyers. It’s expensive to protect yourself. So you’ve got to rocket to the launch and stay on. Or, once you become really successful, you can cash out and not work anymore.
On negotiating… I'm not overly aggressive; I’m extremely fair. I think that both people should be a little uncomfortable, and yet both parties should ultimately be happy. Everyone should be taking a risk but also having a reward. I’m a very straightforward negotiator with buying houses and doing business. I know what I want, the number I want, and that's what I say. You end up running into a lot of the same people, too, so if you're negotiating a contract—whether it's Bravo or lawyers or Shark Tank—everybody sort of knows who they're dealing with. If your person asks for an astronomical number but then ends up settling for something far from it, they know that the next time you're in a weak position. If I'm looking to buy a house in the Hamptons, I'm offering the number that I'm offering. I’m not playing any games. I'm very straightforward about everything, and I take care of people. If I do a deal and want to give my staff a bonus, I'm very fair.
On being taken seriously… In the beginning, I wasn’t. But it was what it was. I shouldn't have been taken seriously in the beginning; I had no value. Or I didn't know the value I would have yet. I was a person that Bravo was hiring for $7,250 for the entire first season of [Real Housewives]. But I knew what I wanted, which was to keep anything that I did in business. If you go on a reality show, you have to give a percentage [of any business you promote on the show] to the network—but I never did that. The industry ended up calling it "The Bethenny Clause.” So that was very destructive in the industry, but I only got paid $7,250—and I was keeping whatever I earned. But I was nobody; I had accomplished anything yet, really.
On her real estate prowess… I invest in what I know. I'm not investing in the Upper East Side or Atlanta, because I don't know those places very well. I really understand downtown Manhattan, the Hamptons, Aspen, and some parts of Vermont. I invest somewhere that I know I can make a real transformational difference, and I always pick something that I would live in. That way, if everything went bad and I had to sell it all and only keep one of the places that I own, I would love to live in it. So I’m emotional about real estate. It’s also important to have a vision. With my apartment in the city, nobody understood what I was doing. People were rolling their eyes and saying, "What is she thinking? This is a dump." But I have a gift of seeing the potential that a property has—and that's where you can make money. I'm willing to put the time and effort into decisions. I love it, and I believe that if you love something, you'll be good at it. I have too many properties this year, five. But I don't like when I'm finished and I don't have anything to do. Then I'm stuck looking at furniture or tiles that I want to use in the future.
On her biggest financial regret… My biggest money mistake was not checking the right box on a contract about whether my company was an LLC or an S Corp. It cost me millions of dollars when I sold. But that's just a mistake. [It's important to have] the right business managers and accountants and all that type of stuff.
On keeping it real on The Real Housewives… I think there's ultimately a satire and a comedy, and if you can think of it that way, humor always wins out. I find it to be absurd. And I find myself to be in a lucky position to be able to kind of narrate and observe this dynamic of women. All the women, they’re all going through something, whether it's divorce or financial issues or infidelity or menopause. It shows where we’re all at in our lives, and I’m very grateful to be a part of it.
On teaching her daughter about finances… I’m leading by example. She knows that I value money and she knows that it gets you incredible experiences. I make her express her gratitude, and I want to show her people who are less than fortunate. I think it's a well-rounded example, and I think that she's getting it. Her mom works. I don't work when I'm with her, but I let her know that we can do all these amazing things because of how much I work. She knows how lucky she is.
On charity… You contribute what you can, and you want to do it in a way so that the money has really good value. When I decided to charter the first plane to Puerto Rico and fill it, that was a lot of money. But It was an exponential investment—and I treat charity like an investment. I don’t want to only go to a charity event and buy something in an auction and feel like I’m doing something. But getting involved and going to Puerto Rico, leading by example, and chartering the first plane made other people charter planes. The payback was tenfold.
On asking her friends to donate to her causes… I don't really ask my friends to donate. It's not one of those things where it’s, “I came to your party, you have to come to my party.” I don't see it like that. If you want to donate to my relief initiative, the money is going to a great place, and that’s wonderful. If you want to donate somewhere else or to your own initiative, great. This isn’t a competition. I’m grateful for anything that anyone does, and there’s a lot of people who donated because they want to feel like they’re actually giving the money directly to people. There are people that don’t even like me who donated with me because they knew that this is the way to get it done.