Is JAY-Z’s Money Advice Feasible? Finance Gurus Rich Jones and Marcus Garrett Break Down ‘4:44′

JAY-Z dropped some financial gems in his album 4:44 (which just spent its second week on the Billboard 200). But let's be honest, how many of us can drop one million on a piece of artwork and wait for it to appreciate into eight million five years later? Luckily, that's not the only way to start saving and investing to work towards financial freedom.

Marcus Garrett literally wrote the book on getting out of crippling debt -- Debt Free or Die Trying: How I Buried Myself in Over $30,000 in Debt and Dug My Way Out and Rich Jones is a entrepreneur and podcast extraordinaire who's kicking off The Show Starter to help others start their own podcasts. Together, the two talk about finances in laymen's terms for millennials in their weekly podcast, Paychecks & Balances.

While JAY-Z is "tryin' to give you a million dollars worth of game for $9.99," Rich and Marcus are offering it up for the free-99.

In the midst of their busy lives, the two chatted with The Boombox about helpful apps, JAY-Z's 13th album and whether or not credit is really more important than throwing money in a strip club. Check out our interview below.

The Boombox: What's your financial background and how did you decide to come up with the podcast, Paychecks & Balances?
Marcus: I was telling my story recently and I was that kind of guy that’s comical for me because my story in a nutshell is I was really irresponsible so long it got to a point where I could not afford to be irresponsible anymore. I graduated at college at 22 and I had about $9000 in debt and you would think I would stop there. But I almost tripled that in a weekend, extravagant weekend depending on how you want to describe it. And even then I wasn't done. I went on for another few years and I was paying off credit cards with credit cards, living beyond paycheck to paycheck. At various points, I was working two or three jobs but I couldn’t even pay the minimal payment and the story I talk about in the book, BOOK NAME, was I hit rock bottom when I was begging a large institution, I have been trying to stay away from the names because I don’t want to get sued for in consolidation loan and they had really got to a point where if they didn’t give me this loan like I was probably facing bankruptcy very soon thereafter because I'd run out of gimmicks. I played house of cards, I shuffled the money around and it was just a horrible and bad experience both personally I'll never allow this opportunity to come again so unlike Drake, I truly started from the bottom. That’s another thing, I'm so old, I used excel spreadsheets, Bankrate was the only thing that existed, there was no app. I don’t think even think smartphones existed at that time, they were just coming out. And so I just started doing a lot of self-study and analysis like I'd just get out of bed, I put together my debt-free plan and now, flash forward , wow, coming up ten years, I try to share this in an informative and comical way on the podcast and talk about the lessons learned and do as I say not as I did type of thing. So if that makes me an expert, I definitely don't feel like one. It was definitely, instead of trials and tribulations, it was just all tribulations. But I'm glad to share the story on the podcast and help others avoid these mistakes.

Rich: Yeah I think for myself, you know it was more-so on the career side of thing initially and even with the idea of starting the podcast, I was looking around for, you know, content that spoke about work and money in a way that didn’t feel like someone was talking down to you or shaming you or talking over your head and I couldn’t find anything like that out there. And Marcus at the time we were both writing for SBM, Single Black Male, and I remember saying something up to the effective of 'Yo, what do you think about starting a podcast, here's what we'll talk about. There's not something like that that's out there.' It really kind of took off from there, you know. Of course, we had our first show, Two Guys One Show, which is in an extended state of dormancy and then we launched Paychecks and Balances in I want to say March of 2016 to really kind of focus on the work and money discussions specifically geared toward millennials and things have kind of taken-off from there. The podcast has really helped me think more effectively about how I manage my money. It sounds crazy, since starting the show and starting to answer these questions and never faking the funk to try to act like I'm an expert, but just talking about my experience, it kind of led me to instill better financial habits in my own life so paying off my personal credit cards debt. You know, having at least a month one month and at this point more than one month of expenses and savings so I have a bit of financial cushion. Every decision isn’t a "If I do this, what if something happens tomorrow." You know, I'm gonna be filing for credit cards and all of this other stuff. So the show has actually helped in that regards to even just to become more disciplined, but also figuring out how to talk to people at our age or younger about money in a way that they are going to respond positively to.

The Boombox: So on the album, JAY-Z talks about investing a lot. In "The Story of O.J." he talks about how he invested in an art piece and he's like one year it was worth a million dollars and two years later it's worth three million and now it's worth eight million dollars but I don't think many people can buy artwork for a million dollars. What ways can people invest on a smaller scale that could do something in a similar way?
Marcus: It’s funny for a couple of reasons you have said. Number one you know you're getting to the greatest rapper alive and the mixtape battles and it's watching JAY-Z through his career arc but also I say whether you are a JAY-Z fan, stan, enemy or hater, you can definitely respect what he's done in a rap game and see where he comes from and where he is. I think a lot of people are also, in a good way, like that I can’t relate to JAY-Z anymore. They're like, you know, J. Cole talking about sleeping on his couch in his momma's house that's more the struggle I can even relate to and even Drake's getting a little bit out of touch talking about his pool's bigger than Kanye. But it gives you something to strive for. So that's number one. For number two, I think on a smaller scale, more reasonable scale, for myself and young millennials and something that we recommend on the show is definitely matching your employers' 401k match. I tell people this and they're like "Yeah, my employer has a three percent match, five percent match, six percent match and I'm like "oh, okay, what are you doing for the match?" and they're like "Oh, I don’t even use it." And I get irate. That’s when I start talking in caps, I start using the little screamy face emojis like definitely don’t leave money on the table. I have given away that free money as I talk about on the show. We generally recommend building up to 20 percent. NerdWallet did an analysis that says millennials ages 18-34 might need to begin saving 22 percent because the market isn’t having the 20 to 30 year historical return that it used to, that we could probably expect five percent returns versus seven to ten percent that other generations have experienced. But that being said is, starting somewhere definitely taking advantage of employer match and I actually had this exact discussion on a listener Q&A a few weeks ago. I think people hear 20 percent and when you’re living check to check whether that’s by choice or circumstances, you're like I don’t have 20 percent, I don’t have two cents. I think it’s about starting somewhere and lot of that is before tax. So I did a little breakdown for someone. First of all we would talk about if you want to become a millionaire so you can buy that piece of artwork that JAY-Z is talking about. And they're like "I can't do that." And I'm like okay, we’re talking about a million; if you missed it by half you still have $500,000. Anyway we’re talking about pre-tax and I think when I walked him through it, when you’re talking about pre-tax, you look at the average median household making $50,000. That’s around $400 but before tax, you’re probably looking at $200 if you have an employer match now we got it` down to six to ten percent but you have to start somewhere. What I kind of recommend is start with two percent. That's usually an estimated cost living rate and work you're way up to 20 percent. So in next five to ten years, start working your way up to that 20 percent. If you have an employer match, you're not even going towards that 20 percent, you're employer match may be six percent, you might be looking at fourteen percent in that case, you might be looking at ten or five. But for some reason, people just hear these numbers and they're like I can't save a million dollars so my solution is to save zero dollars. I'm like "no, no, no, no." That's not how any of this works. You need to start somewhere, start with the J. Cole, work up to the Kanye Workout Plan, move up to Drake with the pool bigger than Kanye and the next thing you know, then you're talking about JAY-Z money and artwork. In a nutshell, it’s really about starting somewhere on that journey.

Rich: Yeah, I think what’s crazy, you got people buzzing about investing based off of lyrics on an album but even the basics of saving. You shouldn’t be thinking about investing if you don’t have even have like a month of expenses saved or you don't have $500 saved or I forget what that stat is. I think that greater majority of Americans have less than a $1000 in savings. You know you consider something like that and you got like people going "Oh, it's time for me to go invest" and it's like well, if you’re gonna start investing and you have $20,000 credit card debt and you have no money in savings it's like yeah that’s a positive move. And when I talk investing I'm thinking beyond the 401k, I'm talking about getting in the stock market and all that. It's like yeah you can do that but there's still a foundation that you need to lay and things that you probably need to clear off your plate first before you start kind of seriously putting money into more of the risky investment that people are getting into. And I think, what's interesting to me, is the way people are responding to that lyric and some other parts, I think it tells a bigger story about just how many people don’t have a good understanding of money to where they hear something about investing and they are like, "Oh my God, I never heard that before." It’s not something that's like groundbreaking or at least to me, it doesn't feel like something that's groundbreaking. To me, professionals or people that have had these conversations, they reacted as it's a great album but what he's saying isn’t anything new if you've ever had these conversations before. I think the big part of the problem that I see with the way people are responding to this is that it signals so many people have never had a conversation about money.
You mentioned apps earlier, are there any apps you use that are helpful in saving or investing in penny stocks or something like that?
Rich: Yeah, I've used Acorn app. I still use it and the returns in that I made are really small because like you said we’re talking about pennies. There's other apps and services that are coming up that are kind of gamified and try to make it fun.

I've heard a lot of about Mint. How is that?

Rich: Yeah. So there’s stuff like Mint, on the saving front there’s also stuff like Digit which people have mixed feeling about since they started included a fee. I think an app might be called Stash where I think with that model you can actually a buy someone a gift card that they can then use specifically to buy a percentage of shares in stock. So innovative things like that are coming out but I don’t have enough experience with some of these other apps in services to really confidently give a recommendation for people. Even though, it's starting small, I don't want to tell people to go use something and they're like "Yo, I lost $20 listening to you!"

Marcus: Yeah, same thing, as far as budget tracking, my favorite is still Mint. I've heard good things, although there is a fee associated with, you need a budget and every dollar. So those are the top three and I personally use Mint. Actually I don’t use an investment app but my favorite that I've heard, I'm actually going to be looking into soon. It’s actually kind of interesting because the only I haven't signed up is I actually probably stayed loyal to Mint because I put probably 15 accounts and just that exercise of putting all the passwords and setting it up has created this Facebook-like loyalty like I don’t move my e-mail and these 15 associated accounts so I stay with Mint because it’s convenient and it worked for me but Personal Capital is one that I heard good things about and I want to explore and the reason why I want to look into Personal Capital, it's my understanding is also free but they will recommend you, they make their money by investment advisors. Although they try to target folks making I think they want a net worth of $100,000 or more so it's more on the high end. But they also track your net worth and I know that's been a big thing for people lately and I think that's becoming more important to me over the years is not how much I saved, how much debt I paid off, but what is my net worth from day-to-day. And I'm also still maybe old school in this regard that I use an investment broker and honestly, I kind of don't even pay too much attention to him. I check-in into quarterly investment broker that works on my 401K now and formally 457. I say when in doubt, a low cost investment, I think still works. I know millennials are "Well, what can I get for free?" and "Where's the app?" We’re talking about 20, 25, 30, 35 year investment. I'm willing to pay a reasonable fee for someone to manage that so I can get the returns I need so I can eventually retire versus I'ma do it on myself and find out I didn’t carry the one and I can’t retire until I'm like 95. You know, you get what you pay for.
Rich: And that's the thing with some of the apps like even with Acorn, for example, it's kind of like you just set it and forget it. You don’t really learn the ins-and-outs of how investing works that way. So you setup an app, it tells you what to do and then you go oh, okay I'm investing but you haven’t actually learned anything about the different types of investment mixes, what one term means from another and that’s part of my hesitation with some of the apps is it's making it so easy that the people aren't actually learning the fundamentals or actually understanding why things are happening the way they are. They only just are seeing the result of that.

Another line on the album from "The Story of O.J." is "You wanna know what's more important than throwin' away money at a strip club? Credit." Is credit really more important than throwing money in a strip club?
Marcus: You know, I'm glad that you said that because I cannot see that line everywhere. I didn't get the joke. I don’t know about you but I have aged to that point where I can’t keep up with all the current jokes so everybody was on Facebook like “You know what’s better than a car?” Credit. "You know whats better than..." I'm like "haha credit...what the hell?" That’s why I was confused so I appreciate you clearing like 25 memes. My answer is still no. I have a biased affinity for dollar bill acquisitions plus it's cash. So first of all, credit is like with interest so that doesn't make a lot of sense but on a serious note, I think as an album and maybe just a growth display, it is important to have that investment capability to better understand even if you don’t to Rich's point fully know all the ends and outs and the mathematical formulas and actuary analysis that buying something that appreciates in value is good, making it rain at the strip club, which not only does not depreciate in value, it literally a zero sum game, bad. You don't need to be a mathematician to figure that out that if you are making it rain, you don't get much return. I would say zero. Some people might argue with me but there is limited return and even before this album, Jay was having some kind of awakening and I don’t remember the exact line when he was taking about going to the club and pissing out all these expensive drinks. I mean, you’re not spending your money on appreciable assets that’s by definition not considered an investment. And by extension, credit is good when used responsibly but as the saying goes, if you want to buy something and pay more for it, put it on credit. So it has to be used responsibly. You still need to pay it off month-to-month. I think the only time, or one of few times that it's a positive is if you're gaining debt to buy an appreciable asset. That's not a call on rims -- which I've done. Arguably, it might be a home if the market works well for you but still, we had a project where we talked about the best investment, as risky as it may be, is still the stock market. The greatest returns historically have been in the stock market, not homes, not houses. I'd have to debate artwork, I will defer to JAY-Z on the expert on that. But again, focusing on the appreciable assets and if you’re not an expert in it and you’re not comfortable, I think it’s too important to just use an app. I think millennials in some ways we get too comfortable where, and I said this on the show, where I have Mint on my phone so I budget. I am like when's the last time you looked at that? I don’t know '97. I'm like, that's not a budget man. If it's not helping you to make informed decisions to track and use your money and then be better each month then that's not a budget, that is an app sitting on your phone. I wouldn’t say that I'm using them, they just exist.

Rich: Yeah. Yeah. And the app I was thinking before is called Stash. I don’t have any specific experience with it but you’re supposed to be able to learn as you go, the have pop-up lessons and all of this stuff while you’re also investing so that might be worth people looking into. I know someone who works in the company. On the credit front, I do think having good credit in a way can save you money because that obviously impacts interest rates and the flexibility that you have and not feeling any kind of pressured to make a decision because you can’t qualify for certain rates so you just take whatever you get. In the moment, the interest rate may not seem like a big deal but when you start actually making purchases and they're purchases that you're not able to pay-off the same month the way people will tell you to do with a credit card; you could end-up spending thousands upon thousands of dollars more overtime simply by not having a good credit history. Of course that’s more than the score, that's paying bills on time, that’s looking at your debt ratio. I think the standard is to keep that under 30 percent. So of the available credit, you do have to view what percent of that are you using at any point in time. So making it rain, throwing dollars, five, tens, twenties, if you’re feeling really ferocious. There is obviously momentary value in the experience but the bigger picture -- it's clearly not doing anything for you. But again, like I was saying earlier, he said that and people are like "ooooohhhh" And I'm like "yo, that's like such a basic thing." If that's blowing your mind, that means you have not started to have these conversations which now is a good time to start having this conversations versus just going "oh, JAY-Z said I gotta get my credit right so let me get my credit right" but not understand why and not understand even...the people around you or your relationship with money and your understanding of money from how you brought up because I've just been having a lot of these revelations lately about why I see money the way that I do and a lot of times that starts with the conversation that weren't had in the home or weren't had with the friends and I know we still hear lot of people say how taboo discussing money is but I think that’s becoming less of an issue and if it takes JAY-Z to get people to start having that conversation, fantastic.

Marcus: Yeah. The only other thing I would add and I think it's a unfounded fear that people have is you can do both! I think people think it's this I can only make it rain or I can have a credit. I can have a high credit score or I can never use a credit card. That’s not how any of this works either. If you do it responsibly, you can do both. You can live on a budget and make it rain but what you cannot do is to make it rain all the time if you don’t have thunderstorm money. So I just think people try to live outside of their means and I've gotten to a point where through a lot of homework and habitual habit that you talked about it you would probably have it, I live on about 50 percent of my income so it's like if I want to, I can go dumb with 40 percent of it but the smarter thing to do is invest because that's gonna help me in the future but it stops hurting you month-to-month if you've gotten a control of your personal finance and it took technically 34 years but at least ten of those years to really hone that skill like "yes I can go out here and be personally ignorant or I can be personally financially responsible. But I'm ignorant with this pool of money. I labeled it. This is my ignorant entertainment. Do whatever, I could go out and burn it in a pile for all I care because that's what it's set aside for. But this other piece is set aside for investment, this other piece is set aside for bills, this other piece is set aside for groceries. But most people just spend until the money runs out and then they listen to a JAY-Z album like "oh, maybe I shouldn't do that anymore".... you should have never been doing it! But, if that's where the awakening comes from then cool. Now let's start working on building those positive habits.

In "Family Feud," JAY-Z says "what's better than one millionaire, two, especially when they're from the same hue as you." How important is it to have a partner who's in the same financial mindset as you are?

Rich: I take that couple of ways and my immediate reaction was yeah, of course that’s good, it sucks being the only person in the room. So I think that that's something that people of color deal with on a daily basis, we deal with it when we go to work, we deal with it in social settings and when we talk about climbing -- whether it’s corporate ranks or entrepreneurial ranks -- you just see fewer and fewer people that look like you so obviously it’s great to have more people who had a similar position to me in the room because that's gonna ultimately create a better dialogue and then there’s also the element of lifting as you climb. The more financial professional success you have, the more you're able to help other people. And so maybe that’s the direction that he was going with it. In terms of the relationship side of things, I don’t think it's as important to have someone who aspires to be at the same level financially. I think that it’s important that that person is open to building the right financial habits. Like if I make $200,000 and I'm trying to become a millionaire, I don’t feel that I then need to be someone who makes $200,000 and is trying to become a millionaire.

What's one piece of advice that you have for anyone reading?

Marcus: Spend less than you earn. It was pretty much a mantra of the personal finance group and I still think that's accurate but I had to reflect back when I was in that position as I was trying to talk to individuals. I don’t want to become the "I'm too good to relate anymore or I'm no longer woke. I was thinking back when you were making that $18,000 and $5.15 an hour and it seemed hopeless when you had $30,000 in debt and you were like $15,000 a year. Let’s put myself back in that position and how did I start to climb out and I realized I needed to modify that quote and I extended it. So it's spend less than you earn or earn more than you spend and I think that's a lot more helpful and it gives you a better light at the end of the tunnel because most people hate budgeting but I don’t blame them, budgeting sucks. We talk about that all the time. And I think that's actually what separates me from the crowd and what makes my voice a bit different is that I acknowledge that up front and I even tried to drive it home. Generally speaking, it's gonna take you twice as long, optimistically to get out of debt as it did to get in. So it only takes one good night, weekend or year to put you in multiple years of debt. So that then puts you in a position and the best advice I should have started with is to never get in debt. That's actually the best advice I could offer. That's just not a reality. If you are there or you find your spouse there or you find you and someone you care about there then you have two choices and it is a choice, not even a fork in the road. You can do both and that would be spend less than you earn which is a bit more contrite. It is less fun but it's actually easier to implement because it's just like "Okay, I make this amount of money, I need to save this amount of money. But also, what I realized I did is earning more than I spent. I start working two or three jobs because I was gonna by any means necessary to pay this debt off and it was actually a combination of those two factors that led to me getting out of debt, giving me that discipline and in some ways, making it so I don't ever want to go back like I don't ever want to work three jobs again. Even when I was working three jobs, I wasn’t balling out of control. Spend less than you earn or earn more than you spend would be my advice.

Rich: I’d say know what you’re working towards because if you don’t have goals and I talk about in the podcast, the idea of creating emotional goals, things that when you visualize them, you actually feel something. And even when you have goals, there are going to be times when you fall off the wagon or whatever term you want to use but you still have a vision of what it is that you’re working towards and maybe it is something as simple as I’d like to have $500 in my saving accounts within 6 months. So you think about how people approach diets and I'm not saying to go on financial diets but when someone's trying to get right for the summer so they can post that selfie, they make different choices. And it’s ultimately gonna be the same way with your finances. So, even if it's I want to be able to take a trip and not go into debt. Okay. First, where do I want to go, how much is it gonna hurt for me to save that, is there anything I can do to decrease that pain? So maybe you wait a little longer to go on that trip so you can save more, maybe like Marcus mentioned you pick up a second job but it’s gonna be very hard for you to make progress if you don’t have a goal to measure that progress against.

Keep up with Rich and Marcus over at Paychecks & Balances here.