While an undergrad at the University of Southern California 30 years ago, John Wheeler caught the Hollywood bug.

But unlike a number of his classmates who studied film, Wheeler majored in economics and went on to launch two companies: investment firm Copper Mountain Trust and technology retailer Tactix.

Now 48, he's finally getting in on the act ... sort of.

Wheeler is investing in films through IndieVest, an independent film studio and financier that offers a portfolio of films.

"It's an interesting way to make money," says Wheeler, who also invests in a ski resort and other real estate. "And the business is a lot of fun."

Risky Business

But film projects are also enormously dicey -- just ask an insider. Breaking even on a film project, let alone turning a profit, is something many producers only dream about.

Of the 7,732 films submitted to the 2007 Sundance Film Festival in Utah, only 196 were screened. From there, only a small percentage struck deals with theatrical distributors, says Geoffrey Gilmore, director of the festival. "The marketplace is more crowded now than it's ever been."

Indy Guarantee

Until recently, Wheeler was hesitant to invest in friends' film projects, fearing a lack of distribution. With IndieVest, though, the group guarantees that the films they produce will be widely seen because the company itself is the distributor.

IndieVest vows to work only with well known actors, too.

"It gives investors an opportunity to invest through a managed risk platform," says Mark Burton, president of production for IndieVest. "We have investors focus on portfolio theory. You want to create a slate of films as you would in the stock market."

To invest in IndieVest's Premiere portfolio of films, you must be accredited, meaning you have more than $1 million in the bank. The minimum investment is $50,000, and annual membership fees also apply.

Solo Investing

If you want to invest on your own, Lizzie Friedman, partner at Sandbar Pictures, urges hiring a lawyer familiar with the production of independent films. "They are the only ones who'll have your back," she says.

She also recommends going through a laundry list of questions, including: How else is the movie being financed? Are there other financiers involved? In what order are people getting paid back? Where will I fall on the list? What experience do the producers, directors and actors have? What relationships do they have with distributors? And how high are the fees for middlemen?

Investors shouldn't be impressed by the size of the budget, but how the budget is being handled. "It's still a gamble even if it's a big budget film from a studio," says Louise Levison, author of Filmmakers and Financing and business plan writer for The Blair Witch Project.

Silver Screen Shares

Buying shares of publicly traded film companies is yet another strategy for those who lack thousands or want exposure to single film projects.

So called pure-play stocks, like DreamWorks ( DWA) and Lions Gate ( LGF), earn revenue primarily from their film ventures.

"The correlation is one to one," says Tuna Amobi, a media and entertainment analyst at Standard & Poor's.

Meanwhile, for less exposure, you may want to look into Disney ( DIS); News Corp. ( NWS), which owns the Fox film studios; or Time Warner ( TWX), which runs Warner Bros.

"In general, the film division makes up 15% to 20% of total revenue at conglomerates," says Amobi.

How do you know if a certain movie will help the bottom line? Amobi says he'd rather bet on sequel franchises, like DreamWorks' Shrek films, that have a proven track record.

Also, pay attention to the holiday earnings reports, which may reveal DVD sales, as well as upcoming Golden Globe and Oscar nominations. Says Amobi, "That could be something that somewhat affects the share price."

Farnoosh Torabi joined TheStreet.com TV in July 2006 as the site's first official video correspondent. Previously, Farnoosh was a business producer and on-air reporter for NY1 News, Time Warner's 24-hour news channel in New York City. Farnoosh is a regular columnist for AM New York and has written for Money, Time, New York Daily News and Newsday. Farnoosh is a graduate of Pennsylvania State University, with a degree in Finance and International Business and holds a M.A. from the Columbia School of Journalism.

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