Are rappers/hiphop artists making money? How many actually retire?

Whose your favorite rapper? – Lil Wayne, Plies, Rick Ross, Gucci, TIP, Jeezy, (fill in the next 90,000+)? In the videos they claim to have plenty of what the average American does not – money, cars, clothes, 10,000 sq ft homes, and the bling to go with it. Not to mention the M-16’s and the infamous “A-K” to protect it all. But given the mass fortune of wealth they portray in their lyrics, videos, and concerts –how much money do they actually have outside of the public eye? I didn’t notice many of them on the Forbes’ list.

But I’m not surprised since many “artists” only get paid 8% - 13% of their album’s retail sales price AFTER everyone else has got their cut (lawyers, label, manager, accountant, IRS, etc.) of that album’s sales. And if it’s more than one person they’ll have to split the remaining meager profits, which is close to nothing if you have like 5-10 people in your group (I wonder how many rappers retired out of WU-Tang? MC Hammer’s club?)

Only those at the top – which is about 6 rappers are actually making money today. The rest of the 90,000+ are probably making the equivalent annual salary of a data entry temp…like $35k/yr if they are even somewhat successful – which is why many of them eventually go broke, in jail, or decide to get real jobs after several years of trying to “make it”.

Not going to retire “artists”
1. Soul For Real
2. DMX
3. Rick Ross
4. Clipse
5. The Lox
6. Lil Kim
7. 95 South
8. Lost Boyz
9. Wu Tang
10. Young Buck
11. Yung Joc
12. Fat Joe
13. Plies
14. (the other 90,000+)

Face it – if you’re not JayZ, Lil Wayne, LLCoolJ, OutKast, Eninem, and maybe 1 or 2 more I can’t think of – then you’re wasting your time.

Hopefully the message gets out to the young and upcoming that there are better options than becoming a rapper/entertainer, and instead they should focus their time and energy in becoming a successful entrepreneur, surgeon, lawyer, or maybe a highly paid CEO who receives a “golden parachute” when they get fired or retire. The road to becoming a successful rapper is a lot harder than it is to go college and become a CEO or successful entrepreneur – but unfortunately parents focus not enough on education and teaching the next generation about financial literacy and working smarter.

This trend needs to change if we want our kids to become the next generation of leaders and employers, instead of followers and employees. Why are rappers teaching our kids to sell drugs, show your underwear, have lots of sex before you’re 15, commit a crime, and make an album about it? Imagine the pressures being felt by our young daughters who feel as if they are not pretty if they do not have a big ass or dress a certain way? Or that they need to have sex before they’re ready in order to feel loved or build their self esteem?
Take responsibility for your kid’s individual and financial future – show them the way even if you can’t get there yourself.

Dhata H. – this was a great convo that we had…

BE FREE

FTC OKs rule

FTC OKs rule prohibiting oil market fraud - MarketWatch: "FTC OKs rule prohibiting oil market fraud"

I'm glad FTC decided to act on this issue - hopefully they will follow through and keep prices normal for a while!

Work smarter with money; even if you have little money!

Not making enough money in your job? Don’t plan to be there forever? Or work forever? If you stopped working today – would you still get paid? A lot of us are trained to work harder and put in longer hours at work (sometimes up to 80hrs!) just to get noticed over someone else for that raise, promotion, and/or title. And if we don’t get the raise this year – we will try harder the next year. Working hard is good – but working smarter is GREAT! Why put in longer hours at your J-O-B and not be fully compensated for it? The Bureau of Economic Analysis showed that wages and salaries fell again for a tenth straight month decline of 0.4%, even though personal spending increased 0.4%. So we’re making less and working more.

But we can BE our own boss and not spend our life working for others – and it really doesn’t require an MBA or Doctorate degree, but rather just thinking differently and wisely about how to apply your money. I’ll show you 3 ways to do so:

1. Keep your day job (for now) – although we never get paid enough while working for someone else, it is the best alternative for a steady income in your household. While on the job be sure to take advantage of the 401k program and hopefully you invest the full percentage amount up to what your company matches.

2. Invest yourself – Instead of spending your extra money on movies, expensive shoes, or cars – why not open up your own investment account through Sharebuilder, Scottrade, TD Ameritrade, etc. and manage your own portfolio? And for those of you who don’t have the time to research stocks – you could easily invest in index funds that statistically have outperformed 70% of the investment managers out there.

3. Find Opportunities – “BE greedy when others are cautious, and cautious when others are greedy” – Warren Buffet. Did you know that if you invested $1,000 in Ford Motor Co. back in January 2009, you would have over $8,000 in your account today? In just 8 months!!?? (Yes I made the call to my friends and family to pick up this stock back in January, but sadly not many did…) This is an example of how to work smarter with money…even if you have little money! For those of us who DO have time to invest and research the stocks for our portfolio, you can find hidden rubies such as Ford was in January (there are still several out there waiting for you). Also take advantage of stocks that pay constant dividends – over time you will come to find that you may have a substantial amount being paid to you quarterly that adds to your bottom line.

BE FREE

How much would you need in retirement?

Is an early retirement possible for you and/or your family? How much can one expect to save if he/she regularly invests and saves their money up until their retirement? This is a serious topic because there are several sources of information telling us that if we save regularly for X amount of years then by the time we retire, we will be millionaires. But how much value will a million dollars hold by then?

I’ll provide a clear example of this:
Let’s say that William Brown makes $40,000 today and decides that he wants to have $1.5 million by the time he retires in 40 years from today – which would make him 68. He expects to receive an average pay raise of 6%. According to Bloomberg Retirement Calculator – If he made regular contributions and saved at least 20% of his salary annually he would accumulate a sum of $1,732,188 – which actually exceeds his goal (excluding Social Security) by the time he is ready to retire.

Brown believes that he is on track to a successful retirement if he averages an 8% return on his investments. Unfortunately, he did not consider the actual value his $1.7 million will be 40 years from today. Using TVM (time value of money), we are able to calculate how much $1.7 million is worth today to get an idea of what it would be like for Brown to retire in the future.

Using the formula of TVM:

FV/(1+r)^T = 1,732,188/ 1.08^40

This will give us an understanding of what Brown’s retirement will be worth in the future – or rather what will $1.7 million be worth 40 years from now. After solving for the equation we find that Willam Brown’s retirement will be worth roughly $79,734 for retirement. Assuming we don’t have a mortgage, credit cards, or any other bills that prevent our savings for retiremet – who can survive off of just $79k? Imagine the lifestyle adjustment....

According to Bloomberg, Brown needs to aim higher – and save more money in order to retire comfortably as the Time Value of Money erodes his retirement value.

How many of us can successfully retire?