14-The-Generosity-and-Business-Savvy-of-MC-Hammer

14: The Generosity and Business Savvy of MC Hammer

MC Hummer gives his wife a special wedding anniversary gift, but only one of them loves it.

Pay yourself first!

Those were the words that stuck out to me from some financial guru, I didn’t get it.

Rushing to church one sunny Sunday afternoon, I was the music director and I was late. I know, I know, typical right?

Don’t worry if you’re not a churchy person this is not a churchy story.

After the music set was finished the musicians including myself usually sat down to hear the sermon. The MC (master of ceremony) began with the word “money.” First thought in my head was, “Oh great, he’s gonna say money is the root of all evil, blah, blah, blah. I’m going to grab me some coffee in the church lobby.”

But what stopped me in my tracks was he didn’t mention money being the root of all evil but rather “the love of money is the root of all evil.”

We were shown a video of this financial gurus and thought to myself again, it’s not typical of church to talk about money…I liked it.

At that moment in time in my life my finances were okay and it was also a time in life where I needed to figure out how to take charge of my “dinero” (money in Spanish). I thought I was getting ahead but after watching that video I realized my money controlled every aspect of my life and I wasn’t even in control of it.

Pay yourself first!

Now I got the point.

No matter where you live the tax boogey man is gonna get you I also realized that your impulse buying habits get you as well.

“Managing your money is 10% “how to” and 90% habitual.”

Mc Hammer made an estimated $33 million in album sales and song royalties that dude ended up spending every freaking dime. And when the IRS came a knocking for their $14 million he couldn’t pony up the cash because he spent it. Now what kind of dummy makes that much cash and spends it all on freaking parachute pants? I know what you’re thinking.

Who the hell are you to tell me how to manage my money?

Well I’m the guy who spent all my gig money and barely had enough for a cup of noodles. If my band was successful and cranking out hits and making millions, my bad spending habits would have stowed away I would have been broke like many other famous musicians. I learned from the best in the business.

Read the “Millionaire Mind” by Thomas Stanley. This amazing book gives you the insight on how millionaires think and how they stayed that way.

“It’s not how much you make but how much you keep.”

When it came to making the cash for MC Hammer it turned out he was pretty good at it, but when that paycheck came in he seemed to have butterfingers.
How to be better at managing your gig money than M.C. Hammer.

I’m gonna be pretty transparent on my finances and show you what I do to manage my gig money. I’m not a millionaire yet but if I keep on managing, saving and investing my finances correctly than…You get the point.

Managing your finances can be subjective for everyone but there are universal truths that need to be addressed. Living in the jungles of Africa to living in a home California there are four basic needs that need to be met to survive.

  • Food and Water
  • Shelter
  • Clothing
  • Transportation

These needs apply to everyone living in modernized economy. Transportation can be different though, if you’re an Eskimo maybe you need snow shoes and a dog sled to get around. If you live in the jungles of Kenya maybe you need a ride from a giraffe to get around. At the end of the day you need something to get around in.

Let’s get started:

My income is roughly 2,500 monthly. Yearly: $30,000 and growing with my current investments. I am self employed so my income can fluctuate, I’m not married I have no ball and chain yet.

2015 Monthly Expenses

Rent: $975
Gas Company: $25
Electricity: $45
Cell Phone: $70
Internet: $25
Netflix: $10
Hulu: $8
Hootsuite: $15
Mailchimp: $10
Car payment: $0
Car insurance: $70
Car Registration: $9
Car Gas: $160
AAA Roadside Asssistance: $6
Property Tax: $7
Food: $300
Total Expenses $1,735

Savings:

Retirement:,$25 (1%)
Savings: $125 (5%)
Charity: $125 (5%)
Taxes: $250 (10%)
Total Savings: $525 (21%)
Totals: $2,500 – $1,735 – $525 = $240 Cashflow

As my income increases I will be able to save more for retirement and give to charity more. My Cashflow is what’s left over for personal uses like entertainment, laundry, etc.. It’s not much cashflow right now but I know it’s going to grow so I can have little more fun. I’m not a materialist and I don’t have a need to purchase lots of plastic things that won’t really make me happy.

My biggest expense are rent, food and gas. One of these days I’ll purchase a Tesla to help me cut costs on gas one day.

Who was this financial guru?

His name is Dave Ramsey and his estimated net worth is $55 million I think I should probably listen to him. I soon discovered David Bach, “The Automatic Millionaire” and Suze Orman. Every financial guru had different perspectives but were generally the same. The similarities were to:

  • Get out of consumer debt.
  • Live within your means.
  • Start an emergency fund.

I read all their books and took all their advice on money management and tailored it my own way and I think it works rather well for me for the time being. So far no loop holes and if I find any I’ll have to readjust.

Back to the story

After the church service I went to the lobby bookstore and found Dave Ramsey’s book Total Money Makeover. Dave Ramsey also offered a 13 week course called “Financial Peace University” for free at many church’s and other organizations.

I have to confess even though I discovered Dave Ramesy, Suzy Orman and David Bach, I didn’t put much emphasize on the plan until a year later. Stupid me.

One year later I started my entrepreneurial journey because I was fed up with the economy, and the music industry. The music school where I taught at didn’t want to give me a raise. I had to do some thing about it and I started studying entrpreneurship. After a almost a decade being self employed as a musician and instructor I had barely a clue of what were my rights as being an independent contractor. That’s how ignorant and dumb I was. Not anymore.

Since 2011 I haved read over 150 books on business and leadership and have attended many classes and seminars on business. Within last four years I have learned more about business and life than in junior high, high school, and college combined. The education system is not what it used to be.

A true music school.

Every music school must require business classes. The system is built to breed skilled players not skilled entrepreneurs. As we all know there are no big music corporations that hire musicians on staff full time. With that said it’s important to see why business classes should be required at all music schools.
Musicians Institute in Hollywood, Ca and even Berklee a School of Music all offer music business classes but they’re not requirements. What a shame…
“Habits take up 90% of our daily lives.”
If the quote above is true than spending more than we earn is a definite habit. We need to control our spending, and invest and save more.
Another thing, if music is just a hobby than you need only two things:

  • The right mindset.
  • The right skill set.

If music is your passion and a career choice than you need three things:

  • The right mindset.
  • The right skill set.
  • The right business skill set.

In the far future there will big music corporations that will hire musicians on staff full time and then musicians wouldn’t need business skills and maybe I might be the guy who gets it started. Who knows…

Conclusion

I’ve been transparent and showed you my income and personal expenses and I hope you can see what “needs” need to be prioritize. After the gig once you receive that paycheck from the band leader there is no going to King Taco and spending it on that delicious Super taco with lots of guac…mmmmm yummy! 🙂 Prioritizing and managing your money is first and foremost.

Besides you should’ve had cash for King Taco before you got paid.

“Building wealth is a marathon not a sprint. The key ingredient is discipline. – Dave Ramsey”

Jay-Z has an estimated net worth of $550 million dollars and invests in business like: Roca wear clothing line and Damon Dash Clothing.

MC Hammer was estimated to have a net worth of $33 million dollars and invested on luxuries for himself and his family and ending up owing the IRS a reported $14 million in debt.

Which rapper do you wanna be?

Jay-Z
MC Hammer

Let me know in the comments section below.

{ 2 comments… add one }
  • Amy March 22, 2016, 4:42 pm

    There’s something about living as a musician that seems to generate an attitude of “I don’t do business” – as if this gives us a greater artistic purity or more suffering to generate more art or something. Baloney. I started to look at my finances from a musician perspective only recently (I work in music education so I get that regular paycheck, but wow is it a slog) – and I appreciate your breaking it down into a very simple priority list. Also, I’d like to be Jay Z because then I would be married to Beyonce. Woot!

    • Roland De Aragon March 29, 2016, 10:58 pm

      Thanks for commenting. I’d be Jay Z too. Woot!

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