If you’re really looking tosoar, who better to model
than the first hip-hop billionaire, Jay-Z? But let’s be clear that Jay-Z is, in fact, an anomaly. While there are 7.5 billion people in the world, Forbes’ 2019 annual billionaire list only accounted for just over 2,150 people.
So although becoming a billionaire may be out of reach for most of us, building first-generation wealth isn’t. Take a moment to learn how you can leverage Jay’s approach to be the change in your family tree.
Defining Net Worth
The 51-year-old business-man reached a net worth of $1 billion dollars, as estimated by Forbes, in June 2019. This $1 billion is a conservative estimate done by the popular wealth magazine.
So what is net worth?
Well, Jay-Z isn’t exactly sitting around with $1 billion in the bank. Instead, his net worth is derived by totaling his assets — which does include cash — and subtracting his liabilities.
And, at the end of the day, he has a lot more assets than liabilities.
Here are five Things we should learn from him about building wealth.
Diversify, Diversify
A breakdown of Jay-Z’s assets immediately shows that he didn’t just get his money from rapping and selling albums. Instead, he built his wealth from an eclectic mix of assets. According to Forbes, Jay-Z’s billionaire status came from the following combined assets:
Armand de Brignac Champagne – $310M
Cash and Investing – $220M
D’Usse Cognac- $100M
Tidal – $100M
Roc Nation- $75M
Music Catalog – $75M
Art Collection $70M
Real Estate- $50M
This approach to diversification is on par with the idea that most wealthy people have at least seven income sources derived from their assets. It’s the age-old concept of not having all of your eggs in one basket.
At a minimum, starting a busi-ness and investing are things that you can leverage at any stage to start building wealth today.
These assets not only allowed the rapper to build wealth but create passive income for him to live from.
Ownership is everything
Whether it’s Jay-Z owning his own label, music catalog, art, or real estate, the name of the game is ownership.
Ownership is the reason he stopped promoting other champagne brands and bought his own brand instead.
When you own the asset, you own the wealth.
Your block can literally be real estate or it can businesses. The point is to own something that will appreciate in value and help you build wealth.
Leverage (but we don’t mean debt)
There’s a concept in wealth building where you can leverage debt to increase assets.
Though you may utilize this in your wealth building, it’s not the leverage we’re referring to.
Instead, you need to leverage what you already have to start building wealth.
It’s no secret that Jay was a notorious drug dealer in New York. And, it’s probably safe to say that it made him lots of money, even before becoming known for his lyrics. Either way, he leveraged what he had at that time to begin building wealth.
What do you have now that you can use to build wealth?
If it’s a traditional 9-to-5, use the money that you earn to start investing or even to start a business. There are a plethora of ways that you can lever-age your job to start building wealth.
If it’s a skill, turn it into a product. If it’s an art, turn it into intellectual property.
The point here is that everyone— from Jay-Z to Oprah to Warren Buffet—all started with what they had to get what they have.
Be intentional
Becoming a billionaire doesn’t just happen by accident. Building wealth is an intentional effort that
takes discipline strategy, and patience.