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I know what you’re thinking…
Is there really anything to learn from Jay- Z’s 4:44 album?
I believe there are some money gems.
This article is going to reveal the 5 Money Tips For Wealth Creation I learned from 4:44.
Here’s some million dollar game for under “$9.99”.
Are You Ready?
- Real Estate ETFs
“I coulda bought a place in Dumbo before it was Dumbo
For like 2 million
That same building today is worth 25 million
Guess how I’m feelin’? Dumbo”1
Dumbo is an actual place in Brooklyn.
It’s an acronym that stands for “Down Under the Manhattan Bridge Pass”.
Please catch the game, though:
Real Estate Assets can multiply your money by 2x, 3x, or 12x in a single lifetime.
Maybe you know that…
But still aren’t ready to buy an actual property yourself…those are expensive, right?
So here’s what you do:
Get to know “Real Estate Investment Trust Exchange Traded Funds” (REIT ETFs).
While you may or may not be able to buy a house or apartment building to rent out yourself…
You can buy a REIT ETF.
It’s simple.
REIT stands for Real Estate Investment Trust.
ETFs (Exchange Traded Funds) are baskets of individual stocks or bonds. They allow you to own multiple stocks at once so that if one stock in your basket sucks, you can still make money off the others.
They are also less expensive than most mutual funds because of their lower management fees.
When you buy REIT ETFs, you are buying companies that either own or finance income-producing real estate.
So if you don’t have enough money to buy property as an individual, you can invest in companies that do by buying a REIT ETF.
These companies own or finance hospitals, apartments, hotels, storage centers, student housing, shopping malls, etc.
REIT owned properties are in every state and employ 1.8 million people annually.2
They are big business.
Also, when you buy an REIT ETF…
You also own a piece of the land, property or loan on the property that the companies own.
Let’s use the Vanguard REIT ETF as an example.
The Vanguard REIT ETF holds several companies within it like the Simon Property Group, Welltower, Equinix and many more (To find out what businesses the Vanguard REIT ETF invests in, take a look at “HOLDINGS” Here).
Simon Property Group owns shopping and dining centers across Europe, Asia and North America.
If you invested in the Vanguard REIT ETF, you would own a piece of Simon Property Group and a piece of ALL of their real estate all around the world!
But you would also own a piece of companies like Welltower, who finance hospitals.
So when the hospital pays its mortgage, they pay Welltower…then Welltower pays you!
Buying an REIT ETF lets you own a piece of many more companies … and a piece of their properties too.
Let’s plug some simple numbers into the Vanguard REIT ETF:
If you put $10,000 in the Vanguard REIT ETF in 2012, by 2016 your money would have grown to over $19,000.
That’s like making $200.00 in rent every month for 4 years without having to worry about fixing any damaged property yourself.
You can make money even if you don’t have a lot. If you could have only put $1000 in the Vanguard REIT ETF, you still would have come away with $1900.
So yeah, REIT ETFs are a good way to invest in real estate deals (like Dumbo) even if you don’t have Hov money.
Keep in Mind: I use Vanguard REIT ETF as an example only. I am not saying you need to buy the Vanguard ETF, there are many others…
I AM saying that you should take asset ownership seriously, you are leaving money on the table if you don’t.
You can search and buy REIT ETFs on websites like Etrade, Vanguard or Ameritrade.
*Do your own homework or find a trusted financial adviser to help you figure out which REIT ETFs or other ETFs are right for you.*
But hey, if all that sounds like too much for you right now, here’s an even easier solution:
Acorns.
Acorns is an app that allows you to invest your spare change into… you guessed it
REIT ETFS.
That’s right.
Whenever you purchase something on your credit card, Acorns gets alerted and invest the spare change into your account.
So if you bought a pack of fresh oranges for $3.49. Acorns will invest the $.51 into your ETF portfolio.
You don’t have to sit and pick ETFs with Acorns, Acorns does it for you.
Acorns invest in REIT ETFs, over-seas or international ETFs, Blue chip ETFs, and others.You pay Acorns $12 a year to use their investment app.
Acorns is a nice way to get into the habit of investing, because you don’t have to think about it. It just becomes a part of your daily spending habits.
Good habits make you rich.
If you want to start investing today, click HERE and you and I will receive $5 to invest for free in Acorns. Now, that’s growing Black Wealth.
- Life Insurance.
“My stake in Roc Nation should go to you
Leave a piece for your siblings to give to their children too”3
I’ve said it before, when it comes to this wealth-game, IT’S NOT ABOUT US…
It’s about the next generation
Or as Hov put it,
“Generational wealth, that’s the key
My parents ain’t have s**t, so that shift started with me”4
Jay knows that if we’re really going to build lasting wealth, we have to start by planting money seeds for our children.
Those who don’t, lose. Those who do, win.
Yes, Stocks, Real Estate, & Businesses are the major ways to build wealth…
But there is one very simple, overlooked way to build for the next generation:
Life Insurance.
Specifically, Term-Life insurance.
How can Term life-insurance build wealth?
Like This:
Term-Life insurance is a basic version of life insurance.
You pay a little every month for 1, 10, 20, or 30 years (you choose).
Should something happen to you in that time, your family (or whoever you want) will receive a hefty supply of money.
For example, State Farm begins coverage at $100K a month. Of course, you can sign up for more should you desire.
A 30 year “term” is $20.23 a month.
That means you pay $20.23 a month and you are covered for 30 years.
A 15 year “term” of coverage is $15.45 a month.
A 10 year “term” of coverage is $15.00 a month.
Term-Life insurance pays out $+100K which is money your kids can invest in businesses, Trusts, or stocks so that your money makes even more money.
This is a highly underrated asset in the wealth game.
And I’m pretty sure you can afford $15.00 a month or $.50 a day to insure you get $100K + for your family.
Whole Life insurance, Variable Life insurance and Universal Life Insurance aren’t really needed for most people.
Yeah, Whole Life insurance allows you to pull out cash if you need it, but I don’t think it’s a good idea to use your Life Insurance policy as an ATM or credit card…
You don’t need all that in a Life Insurance policy.
So here’s the deal:
- If you’re under 50 years old.
- Have children or people you want to leave money.
- Don’t need to use your Life Insurance policy as an ATM or credit card, then
Term-Life Insurance is a good investment.
We must know this.
According to the Journal of Consumer Affairs, understanding Life Insurance is a basic component of financial literacy.5
I know far too many people who pass on, leaving their children and grandchildren alone to start from scratch.
Or worst….
The children and grandchildren actually have TO PAY money just to get back to $0.00.
Don’t let that be your family.
Protection and Wealth-building is easy if you know the game.
Let Jay tell you.
- Good Credit
“You wanna know what’s more important than throwin’ away money at a strip club? Credit”.6
Like the line or not…catch the game.
Your credit score determines:
- How much You Pay for Utilities! Your cable, electric, and gas companies can actually charge you more in deposit or fees if you have a lower credit score.
- Your ability to get a loan in order to buy a home or start a business
- Your access to quick cash thru credit cards
- Your ability to be hired. 47% of employers are now checking credit scores to judge their employees.7
- How high your life insurance premiums will be. People with lower scores pay more!
*Bad credit means you are decreasing your ability to make bigger moves with money.
I remember when I wanted to buy a property…
My plan was simple, raise my credit score from very low to 750 in two years.
Here’s how I built some credit:
- Got a credit card.
- Bought stuff (never more than I could immediately pay off).
- Paid the credit card off every month.
- Made sure to pay my bills on time.
That’s it.
My credit score ended up around 780…I’ll take it.
I was able to get my hands on a townhouse, rent it out and invest the profits.
Here’s the point: Without good credit, I couldn’t have gotten the house, couldn’t have started my journey as a landlord, and would not be making investment income.
Remember…You can still make major moves with BAD CREDIT… I just wouldn’t recommend it (I’ll save that for another post, another time).
Everyone who understands money, understands the importance of credit…AND USES IT TO THEIR ADVANTAGE.
On the flip side, some people are crazy stressed because of credit card debt on multiple cards.
For real.
According to the American Journal of Health Promotion, people with over $1000 in credit card debt were more likely to suffer from stress, obesity and substance abuse.8
What’s worst…
Their inability to pay off those credit card debts hurts their credit score
Which limits their ability to make bigger moves with money. All bad.
Here is a strategy to reduce credit card debt off multiple credit cards:
- Target one card: Pay off one card at a time.
- Maintain the minimum payment on all cards to stop yourself from getting hit with fees.
- Set aside a $25, $50, $100, etc. a month extra to pay on ONE CARD AT A TIME.
- When that card is paid. Move to the next and repeat.
Credit scores can rebound.
You have everything you need to right now to be financially successful.
Drop that beat for Hov one time…
- Group Economics- Build With Others For Faster Results
“I’d like to see
A nice peace-fund ideas from people who look like we
We gon’ start a society within a society
That’s major, just like the Negro League
There was a time America wouldn’t let us ball
Those times are now back, just now called Afro-tech”9
If we are going to create a financially secure Black society within American society, we must be unafraid to fund ideas from “people who look like we.”
That means supporting Good Black Banks, Businesses, and People.
Hov believes that advances in technology, like the internet, can help Black Folks Bridge the wealth gap…if we work together.
That’s what Afro-tech is about. Afro-tech is a meeting of Black startup entrepreneurs that come together to discuss the latest strategies and tactics to grow and expand Black businesses and skills in Silicon Valley.10
This is Group economics, the ability to help one another move to a better financial position.
You can do Group Economics within your own personal group.
With your 2-5 friends or family members, you are going to put your money together to purchase an ASSET, something that can make money for you without your direct presence.
Let’s run through an example of what you can do:
- Get 5 people other than you on board to make money.
- Each person will commit to building up decent credit scores (700+).
- Purchase a multi-room house or apartment close to a metropolitan area or popular destination near you.
- If the house is $200K. You will need a 20% down-payment or $40K in cash.
Sounds like a lot of money doesn’t it?
Not when you divide it…
$40K divided by 6 investors means each person will pay $6.6K.
- You place this property on Airbnb, an online service that allows others to rent a room in your property as if it were a hotel. *I talk all about Airbnb in this post.*
Let’s say your home has 3 bedrooms and you bought it in Detroit.
You can make around $754 if you successfully rent out each room every week.
There are 52 weeks in a year so: 52 x $754= $39,208 a year
That is pretty close to the $40K you and your 5 friends put down.
That is NOT A SALARY, it is money you will use to repeat the process.
- Search for another property and repeat.
Eventually, with more properties you will create income that you can live on or use to purchase more assets like stocks, bonds, utility liens, other businesses etc.
10 properties that produce money for you and your team without you having to be there is awesome.
You have just built a system that makes you money without you punching a clock.
But here’s the beauty: You have also become a bank!
Your Airbnb money can now be used to fund other business ideas like barbershops, restaurants, boutiques, online services, anything you and your team can afford.
That’s Black Excellence.
Remember my first townhouse I was telling you about. I ended up buying it with a partner.
Again, we put 3% down, lived in it for a year, moved out and rented it to others.
Our pockets were never stressed because we found an affordable, beautiful property and split the costs.
Group Economics, the ability to make money together, is a beautiful thing.
Or…
As Jay put it:
“What’s better than one billionaire? Two. ‘Specially if they’re the same hue as you”.11
- “Investing Is Not Just For The Rich” Mindset
“I bought some artwork for 1 million
2 years later, that s**t worth 2 million
Few years later, that s**t worth 8 million
I can’t wait to give this s**t to my children
Y’all think it’s bougie, I’m like, it’s fine
But I’m tryin’ to give you a million dollars worth of game for $9.99″12
Real money is in building businesses or investing in them. Pure. Simple.
According to Economic Development Quarterly, Black folks who work jobs make less money over a lifetime than Blacks who own assets and businesses.13
Also, those who learn financial literacy at an early age or ever, build more wealth over a lifetime.14
Art. Gold. Stocks/Bonds. Land and Real Estate. Businesses. These are appreciating assets because they gain value over time.
Jay’s artwork appreciated from $1 million to $2 million in two years.
Do you think this kind investment opportunity is exceptional and only for the rich?
It’s not.
Let me pick a random stock. How about AK Steel.
You could’ve bought regular-old “AK Steel Holding Corporations” Stock (AKS) which went from $2.04 to $10.21 in January 1, 2016 to December 1, 2016…15
That is a 5X growth in a SINGLE YEAR.
To put that in Jay-Z terms, if Jay would’ve invested $1 million dollars in AKS in January of 2016 instead of art, he would’ve had 5 million dollars by DECEMBER of the SAME YEAR.
Let’s play with smaller numbers.
If you invested $10K into AKS, you would have ended up with $50K in a year.
Now, you’re probably not going to know exactly when the next company is going to go big.
But know that you can find opportunities for doubling, tripling, or quadrupling your money.
They are everywhere…If you know where to look.
The point is to own something: stock, art, land, etc. If it is valuable, it will appreciate.
This is the million dollar game.
But let me finish with the Truth:
Investing takes time, you can lose money.
Stocks fluctuate, you can lose money.
Real Estate markets sometimes go south, you can lose money.
Businesses take time to grow and nothing is guaranteed, you can lose money.
The only thing riskier than any of these:
NOT INVESTING AT ALL & HOPING FOR THE BEST!
That is a sure-fire way to make no money and to make yourself vulnerable to unexpected expenses, insuring your children have to start from scratch when you pass on.
Please know that you are worth the extra effort. Your family is worth the extra effort. Your community is worth the extra effort.
The journey will be difficult at times, but
in a world of shrinking pensions and abysmal company loyalty, you may be the only one willing to invest for your future.
Hov wasn’t playing when he said Financial Freedom was the “Only Hope”.
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Hi, I’m Shawn, a Health researcher and writer deeply dedicated to the personal enhancement of Black Bodies, Black Minds, and Black Bank Accounts. I’m also the Founder of Black Health HQ. I created Black Health HQ to be a research driven platform for the development of Black physical, mental and financial health. Black Health HQ works toward the extreme well-being of Black people, offering free content along with services and products to assist you on your journey to maximum Black Living. Together, I believe we can build a vibrant and thriving Black community by strengthening what is most precious: our health and wealth.
Notes:
- Sean Carter.The Story of OJ. Tidal, 2017.
- “What is a REIT?.” July 25, 2017. https://www.reit.com/investing/reit-basics/what-reit.
- Sean Carter.LEGACY. Tidal, 2017.
- Sean Carter.LEGACY. Tidal, 2017.
- Sandra J. Huston. “Measuring financial literacy.”Journal of Consumer Affairs 44, no. 2 (2010): 296-316.
- Sean Carter.The Story of OJ. Tidal, 2017.
- Jessica Mai. “7 ways your credit score can affect your life.”Business Insider, May 5, 2016 http://www.businessinsider.com/how-your-credit-score-can-impact-your-life-2016-5.
- Melissa C. Nelson, Katherine Lust, Mary Story, and Ed Ehlinger. “Credit card debt, stress and key health risk behaviors among college students.” American Journal of Health Promotion 22, no. 6 (2008): 400-406.
- Sean Carter.LEGACY. Tidal, 2017.
- “About the AfroTech conference.” July 25, 2017. http://afrotech.com/about/.
- Sean Carter.LEGACY. Tidal, 2017.
- Sean Carter.The Story of OJ. Tidal, 2017.
- Bradford, William D. “The “myth” that black entrepreneurship can reduce the gap in wealth between black and white families.”Economic Development Quarterly 28, no. 3 (2014): 254-269.
- Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, and David Brava. “How financial literacy affects household wealth accumulation.”The American economic review 102, no. 3 (2012): 300-304.
- Yahoo Finance. “AK Steel Holding Corporation (AKS).” July 25, 2017. https://finance.yahoo.com/quote/AKS?ql=1&p=AKS.