(Photo: For The Win)
Nipsey Hussle is a rapper, businessman, and marketing genius. If you haven't heard of him or his music, then you need to get up on game. If you have heard his music then you know that he's very big on investing and entrepreneurship. From music and restaurants to phone shops and a clothing brand, Neighborhood Nip sure knows how to keep a bag coming.
Since he's my favorite rapper, I felt it was only right to highlight 6 investing lessons that I picked up from his raps and I think could help you as well. Check out some of his raps and my interpretations below.
1. "Put Pirelli's on stocks, I don't want no rims." - from YG's "I Wanna Benz"
Nipsey is letting us know that we don't always have to be flashy with our purchases. A million in the bank with 5 pairs of shoes is a lot better situation than no money and a millionaire pair of shoes. Also, those shoes don't all have to be Ferragamo's or Christian Louboutin's. This same principle can be applied to investing.
Blue chips stocks are big name companies that have been around for a while. They may not always be sexy, but they provide stable returns that pad your wealth. Tech stock IPOs are great, but there's nothing wrong with good of Johnson & Johnson (NYSE: JNJ) or ExxonMobil (NYSE: XOM) in your portfolio.
Peep the lyrics at the 2:23 mark below.
2. "I was once told that everything glittering is not gold." - from Nipsey Hussle's "Gangsta's Life"
Gold is considered a precious metal and can be bought either in physical form or in the form of an ETF (NYSE: DUST; NUGT). Many people have been looking into gold recently since it's been on the rise, but we all know that buy low, sell high is the motto. Gold can be a great asset, but make sure you're buying in a way that boost your net worth, not decreases it. It may be shiny, but the current and projected future values are really what you should be looking for.
Peep the lyrics at the 0:50 mark below.
3. "I mean it's legal, pay taxes to them white folks." - from Nipsey Hussle's "Ocean Views"
Everyone wants to invest at some point in time, but something people don't take into consideration is taxes. Investing in the stock has generally two levels of taxes: regular income and capital gains. If you hold an investment for one year or less, the profits will be taxes like regular income as if it were from your job. However, if you hold investments for longer than a year, you're taxes will be less since the capital gains tax is applied. There are some caveats to this rule such as with precious metals, collectibles, and certain dividends, but for the most part the rules hold up.
For more information on capital gains, check out this video.
Peep the lyrics at the 3:13 mark below.
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4. "Solitary thoughts like how to reinvest my side change." - from Nipsey Hussle's "Down as a Great"
We all want to make money from our investments, but what you do with that money is what counts. Reinvest! A passive way to reinvest is to enroll your dividend paying stocks into a DRIP. Here's some more information on DRIPs. Since this method allows you to buy partial or whole shares of stock with little money, it's like investing spare change.
Peep the lyrics at the 0:42 mark below.
5. "At the highest level of business there's mailbox money." - from Nipsey Hussle's "Stay Loyal"
This is a continuation somewhat of the last point in that dividends are a means of passive income. They aren't the only means though. Real estate, bonds, and businesses can be ways to generate money that you don't have to put much effort into. Mailbox money is just that, passive income. Nipsey says the highest level of business has mailbox money because it's the best way to generate cash flow without having to put in much work. Sounds a lot like a record company right?
Peep the lyrics at the 3:25 mark below.
6. "International Nip Hussle, the current exchange." - from Nipsey Hussle's "Only A Case"
The last lesson Nipsey wants us to take away from his music is the mean to international exposure. Owning stocks that are in international markets can be risky, but the rewards can be quite generous. Forex (foreign exchange) is also a great way to dive into international markets and make good money around the clock (it's open 24 hours per day Sunday evening to Friday evening).
I highly encourage you to check out Freeman Capital as they are the first forex-based wealth management company that uses artificial intelligence that I've come across. Be sure to tell them Eric sent you!
Peep the lyrics at the 0:52 mark below.
Investor Takeaway: Hip-Hop is more than music; just ask I Am Hip-Hip TV and Nipsey Hussle. If we listen carefully, it's more than just poppin' bottles and buying fancy cars. We can learn a thing or two about investing and business when we follow the clues.
Disclosure: This editorial is by no means a solicitation to buy or sell any of the above-mentioned securities. It is merely a means for educational purposes. All investors are subject to their own research and due diligence.