Lessons from Jay-Z, 50 Cent, and Wealth Building

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Podcast Notes

Jay-Z’s Strategic Outlook:

• Jay-Z reflects on his journey and peers from the 90s.
• He anticipated his long-term success and noticed others missing opportunities.
• He views success in terms of strategic moves, not just talent.

Studio Experience and 50 Cent Warning:

• Jay-Z recalls telling Bleak, Beans, and others to release more music.
• Warned them about 50 Cent's impending success.
• Predicted 50 Cent's rise when "In Da Club" released.

Strategic Advice:

• Jay-Z emphasizes the importance of seizing opportunities.
• Encouraged his peers to flood the market with content.
• Some didn't act, leading to missed opportunities when 50 Cent rose to fame.

The 50 Cent Takeover:

• 50 Cent’s signing by Eminem changed the industry.
• 50 had street and mainstream appeal, supported by Eminem and Dre.
• His rise was amplified by a successful song on the "8 Mile" soundtrack.

Eminem's Role:

• Eminem didn’t fear 50 Cent’s reputation (getting shot nine times).
• Supported him purely based on his talent and music.
• His co-signing propelled 50 Cent into the mainstream.

Missed Opportunity in the Rockefeller Team:

• Jay-Z advised his team to release music ahead of 50’s success.
• They didn’t act quickly enough and had to sit out 50 Cent’s wave.

Pandemic Comparison & Content Creation Urgency:

• The current era is likened to a "pre-50 Cent moment."
• The digital world demands more content than ever due to the pandemic.
• Creators need to seize the moment and flood the market with content.

Content Strategy:

• Now is the time to create and distribute as much content as possible.
• Engage audiences while they are attentive, before a new wave hits.
• Avoid overthinking and just put out content—opportunity is now.

Influencers & Lane Occupation:

• Established influencers like Gary Vee and Grant Cardone dominate their fields.
• Once a person establishes a "lane," it’s difficult for others to enter.
• Success isn’t just about being the best; it’s about being first and consistent.

Gary Vee & Grant Cardone’s Success:

• Gary Vee and Grant Cardone have monopolized their respective markets.
• Their early adoption and content production solidified their dominance.
• Their influence is unchallenged because they capitalized on opportunities first.

Money & Investment Philosophy:

• Unlike specific niches, money has no fixed "lane."
• Anyone can invest, regardless of race, gender, or personal circumstances.
• Investment is the key to overcoming systemic challenges like prejudice or financial limitations.

Investing as the Ultimate Equalizer:

• Investment transcends societal barriers and systematic oppression.
• Green dollars multiply, regardless of who holds them.
• The answer to financial challenges, irrespective of background, is to invest.

Personal Stewardship:

• If you're not saving at least 10% of your income, you're not prioritizing yourself financially.
• Saving and investing 10% is crucial for long-term financial success.
• Giving to charity or religious organizations is valuable, but personal financial health must come first.

Universal Law of Money:

• The universe rewards those who are good stewards of their money.
• Mismanaging money or failing to save signals to the universe that you don’t value wealth, leading to fewer opportunities.

Closing Thoughts on Content Creation & Money:

• Now is the moment to act, create content, and invest.
• Missing this opportunity is akin to missing the 50 Cent wave.
• Money follows specific rules, and those who understand them will prosper.

Living Expenses:

• Hair, nails, food, air conditioning, and other necessities fall under the cost of living.
• These should be accounted for in your cost of living budget, not from your 10% savings or investment.

Budgeting Strategy:

• A simple budget structure: 10% charity, 10% to yourself (investment), 10% to debt, and 70% to live off.
• This is known as the 10-10-10-70 rule.

Debt Management:

• 10% of your income should go to debt repayment.
• Define debt as credit cards, loans, and personal borrowing.
• If your car loan exceeds this 10%, it needs to fit into your living expenses.
• Avoid overspending on car loans and ensure your total debt doesn’t exceed 10% of your income.

Car Loan Guidelines:

• Jay-Z’s rule: If you can’t buy a car twice, you can’t afford it.
• Example: If you can’t buy two Ford Mustangs, you shouldn't purchase one.
• Practical rule: If half your paycheck goes to rent and the other half to your car (including insurance and gas), it’s too much car.

Overspending Warning:

• If your money is fully allocated before you receive it, you’ve taken on too much debt.
• Many people live in the negative, relying on overdrafts or future income to cover current expenses.

Wealthy Thinking:

• Wealthy people don’t think about money because they have enough.
• Aim to have so much money that it’s not a daily concern.
• If you have a number you don’t want your balance to drop below, you’re thinking like the middle class.

Credit Card and Mortgage Guidelines:

• All your credit card and mortgage debt should not exceed 10% of your income.
• In some cases, it can go up to 20%, but no more.

Income and Debt Ratio:

• If your house and car loans exceed 20% of your income, you’re living beyond your means.
• You’re keeping up with others when you should be focusing on living within your financial capacity.

Middle-Class Trap:

• The middle-class trap: borrowing more than you make.
• Banks qualify people for homes that exceed their earnings, leading to long-term financial strain.

Inflation and Borrowing:

• Borrowing for long-term mortgages means paying more than the actual value due to interest, inflating your total debt.
• A $100,000 mortgage becomes a $270,000 commitment over 30 years.

Economic Enslavement:

• Borrowing more than you make leads to economic enslavement.
• It’s similar to being a sharecropper—working for someone else’s benefit without owning anything yourself.

Working for Taxes:

• Most Americans work three months of the year just to pay their taxes.
• 25% tax rate means three months of your work goes straight to the government.

Universal Law of Money:

• Money flows easily to those who save at least 10% of their income.
• If you don't save, you get caught in the rat race, constantly working without building wealth.

Rat Race Definition:

• The rat race is leaving a house you can’t afford, driving a car you can’t pay for, to work a job that doesn’t make you rich, only to repeat the cycle.

Wealth Creation:

• To break out of the rat race, you need to invest and save consistently.
• Money respects good stewardship: it will multiply if you invest it wisely.

Hard Investments:

• Invest in hard resources like gold, silver, Bitcoin, Ethereum, and real estate.
• Also, invest in utilities—toilet paper, lights, water, etc. These are necessities that don’t lose value during a recession.

Financial Literacy:

• Financial education is key to avoiding the traps of overspending and borrowing beyond your means.
• Understand the rules of money and use them to build wealth instead of falling into debt.

Wealthy Habits:

• The wealthy use financial institutions, but their customers pay for their expenses.
• If you’re using your own money for big purchases, you’re not following the wealthy mindset.
• Customers should cover your financial obligations.

Bitcoin as a Tangible Asset:

• Bitcoin is now considered a tangible asset.
• Accepted by Amazon and many other places, making it a hard asset.

Examples of Utilities:

• Utilities include electricity, for example, Warren Buffett invests in publicly traded electricity companies.
• Another example is the internet. In a recession, Comcast stock went up.
• If the internet disappeared and someone reinvented it, they would control the world.

Utility Coins:

• Not a big fan of utility coins.
• Utility coins involve too much friction and space to tie them back to the asset.
• Prefer owning the actual asset rather than the token.
• Goal: Be as close to the skeleton of the asset as possible, not just the token representing it.

Sales Funnels:

• Sales funnels are like real estate.
• A hard income-producing asset.
• They take other people’s money and generate income, just like real estate.
• You don’t need a job, employees, or even a product for sales funnels—just sell someone else's product.

Sales Funnel Opportunity:

• During the recession, sales funnels could have been used for various products, like creating an app for drive-thru alcohol in Texas.

Pandemic Trends:

• Things like Viagra sales increased during the pandemic.
• Sales funnels would allow tapping into these trends without needing to own a product.

Data Storage as an Investment:

• Data storage is another no-brainer investment.
• Everyone and everything uses data, and the cloud has become critical.
• You may not fully understand the cloud, but it’s a vital part of modern data storage.

Cryptocurrency as an Asset:

• Since cryptocurrency was mentioned earlier, it counts as a tangible investment.

Lobbying:

• Consider investing in lobbying.
• This involves paying politicians to pass favorable laws.
• Buy land or assets near future developments after getting insider information.

Law 3: Wise Counsel:

• Money sticks to those who seek advice from wise counsel.
• If you don’t listen to smart money advice, you’ll lose your money.
• Example: Taking investment advice from a rug maker about jewelry in "The Richest Man in Babylon." They lost everything.

Law 4: Familiarity in Investments:

• You will lose your money if you invest in areas you are not familiar with.
• You must educate yourself or get a mentor before investing in something new.
• Don't just rely on advice from friends or people who don’t practice what they preach.

Law 5: Avoid Impossible Returns:

• Money will run away from you if you force it to make impossible returns.
• Expecting unrealistic gains will lead to losing your investment.

Practical Example from Warren Buffett:

• Follow Warren Buffett’s moves, like when he stockpiled cash before a recession.
• You don’t need to ask if you should follow him—just do what he does.

Investment Mindset:

• When you make an investment and it drops in value (e.g., from $1 to $0.75), buy more—if it was a good investment at $1, it’s even better at $0.75.
• This principle is called Dollar Cost Averaging.

Investing Journey:

• Initially, I checked my investments every 37 minutes.
• I found it difficult to trust the process because of my past struggles with money.
• At first, I was constantly checking my accounts, especially when I started using apps like Betterment and Acorns.

Learning to Accept Risk:

• Acorns triggered multiple overdrafts by rounding up small transactions, but I realized the importance of risk in investing.
• I was more excited about the small amount in my investment account than the overdrafts, because I had never had an investment account before.

The Power of the First $1,000:

• Saving my first $1,000 gave me immense confidence.
• Once you save your first comma, it becomes addictive, and you’re more likely to continue investing.
• Challenge: Save 10% of your income, reach your first $1,000, take a screenshot, and reflect on the feeling.

Emotional Connection to Wealth:

• Seeing commas in your account can be euphoric, but losing them can feel devastating.
• The focus should be on building and maintaining that sense of achievement and security.

Changing Perspective:

• As you grow, you check your investments less frequently because you trust the process.
• At this stage, I only check my investments about once a week.

Financial Discipline:

• If you have extra money after paying off a house or a car, don’t spend it recklessly—continue to invest it, whether in crypto or other assets.
• For example, if you pay off your car note, start putting that monthly payment into investments like cryptocurrency.

Seven Cures for Not Being Broke:

1. Start fattening your purse: Save at least 10% of all income.
2. Control your expenses: Spend less than you make; don’t overspend.
3. Multiply your money: Invest wisely to make your money grow.
4. Guard your wealth: Protect your money from loss.
5. Make your home profitable: Either find ways for your home to generate income or ensure you get tax benefits.
6. Insure everything: Always say yes to insurance, whether for your car, home, or electronics—this prevents costly repairs later.
7. Increase your earning potential: Continuously learn new high-income skills to boost your ability to earn more money.

High-Income Skills:

• If you’re unsure about your future, type "high-income skills" into Google and start learning those skills.
• Sales is a timeless high-income skill, and even in difficult times, sales skills are necessary for survival.

Sales and Value Creation:

• Everything in life, besides bread and water, needs to be sold.
• If you don’t want to master sales, you will end up paying someone else to do it for you.