Financial Luminary: Rapper 50 Cent

by James & Miel on September 18, 2009 · 0 comments

Ok, stay with me for a minute. For the most part, I’m pretty ambivalent towards 50 Cent. I’m familiar with a couple of his songs, but I haven’t followed his career. However, after watching this video of him on CNBC, I came away equally surprised and impressed with his financial intelligence.

Say what you will about his music, but 50 Cent (born Curtis Jackson) has a very impressive financial record. His highlights include being given the highest sign-on bonus of any artist by a record label (reportedly over $1 million), becoming an initial investor in Vitamin Water (which later sold to Coca-Cola, netting him a post-tax profit of around $100 million), a successful personal marketing campaign that has yielded for him movies, video games and television appearances as well as enough personal wealth to be recognized by Forbes, listing him as a second richest rapper, behind only Jay-Z, a man who has been in the industry much longer than he has.

Watching the video, three things in particular impressed me. First was his strategy for marketing himself, second was his desire to surround himself with people who are experts in their field, and third is his willingness to abandon fear and take risks.

As most people are aware, the record industry has been hit hard by piracy. It wasn’t long ago that Metallica was suing Napster; when access to music for free was easy and widespread. Ever since then, the record companies have fought a very public (and from a public relations standpoint, a very nightmarish) war against pirating music. We’ve all heard the stories about people being sued for hundreds of thousands of dollars and the like. But despite these heavy-handed methods, the record companies are losing this battle, and it’s going to take some innovative thinking for them to start making the kind of money they’re used to again. But 50 Cent has a very enlightened perspective on piracy. He knows that it can’t be stopped, only slowed and even then you can’t do a very good job of it. He talks in the video about not getting mad when people pirate his music. He understands the power of a brand, and the fact the he himself is a brand, and any way that you can put your brand out there is good. He talks about how people might steal his songs but go to his concerts (where musicians make most of their money anyway), plus he’s been able to leverage the power of his brand into other money-making ventures, such as the aforementioned video game and movie. That willingness to be flexible enough to adapt to a changing environment is something that we all can take a lesson from. He properly assessed a situation (the current state of the recording industry) and changed his actions to put himself in a better place to deal with that situation (by leveraging that changing environment into an opportunity to expand his brand). He knows that when he builds his brand, he is able to build his wealth.

The desire to surround himself with experts is such a huge thing, and really shows a lot about a person’s intelligence and humility. Speaking for myself, I sometimes find it hard to reach out to others who are better at something than I am. I may recognize their superiority, but nevertheless, I try to do it on my own. And in doing so, I deprive myself of an important learning moment. Failing to leverage the skills and experiences of others only hurts you. In 50 Cent’s case, he sought out author Robert Greene after reading one of his books in an effort to collaborate on a new project.

I’m reminded of a 60 Minutes story I saw a while back with LeBron James where he talked about his friendship with Warren Buffet. Far from a superficial friendship, Lebron has stated (and Buffet confirmed) that he has frequently called Buffet to get his take on certain projects or investment opportunities (in fact, LeBron James’ financial/marketing smarts are so well developed he probably deserves his own post). The music, sports and film industries are very similar in the sense that a lucky break here or there can take you from very poor to very rich in a heartbeat, and it says a lot about an individual willing to recognize the craziness of that situation and seek out advice from those who can grant a little perspective. Unfortunately, not all of these instant millionaires do this; a recent study conducted by the NBA Players Association estimated that 60% of retired NBA players are broke only five years after retiring from the league (average NBA salary: around $5 million).

In the video 50 Cent talks about how he’s not afraid to take on risky investments because he’s already been through much worse. And that is definitely true. He lost his mother when he was young, he grew up in one of the toughest ghettos in New York City, he started selling drugs at a very young age leading to multiple run-ins with the police, and he was shot multiple shot (once in the jaw, causing his trademark slur). After going through that and being a successful musician, he has to feel like he’s playing with house money at this point. What if he had invested in Vitamin Water and they had tanked, losing him a bunch of his money? Is that really worse than what’s he’s already been through? But by taking those risks he’s managed to put himself in a position to maximize his earning potential. Granted, I’m sure he has a team of financial advisers working for him but 1.) he has to be smart enough to hire good ones and listen to them and 2.) if it was that easy, every rapper/actor/musician/artist who made it big would continue to grow their wealth. Which we know isn’t true, as we hear about a multitude of rich celebrities declaring bankruptcy all the time.

He may not have an economics degree from Harvard, but it’s hard to look at 50 Cent and not take away some solid lessons. In the video he talks about living below his means, about how waking up every morning in Mike Tyson’s old house (which he’s trying to sell) is a daily reminder that money can be lost as quick as it can be made. Despite the hosts of the show not giving him 30 consecutive seconds to express his thoughts, I came away very impressed. It seems like he is a man who is not only money-conscious, but the type of person willing to put in the work to ensure that he wealthy status stays that way.

Twitter: @michael_dink

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