Recession proof

An article for real hustlers

From Yo Gotti’s Instagram account, @yogotti

At the beginning of July, Yo Gotti launched “Recession Proof”, his first single as an independent rapper. As it is made obvious by the title, the rapper brags about how he is so wealthy the ongoing sanitary and economical crisis we are facing will affect neither him nor his hustle. On the contrary of other rappers, who did not spend their money wisely: “Rap n* didn’t save well
/All them Richard Milles, now they for sale”. On the other end, Yo Gotti praises himself for his savings: “I know how to make the paper then stack it too”.

You know you enter an economical crisis when rappers use their savings and not expensive watches as prestigious assets. Conspicuous consumptions may be one of the most widespread codes inside rap culture, but it does not mix well with closed clubs and canceled concerts.

I don’t know enough about rap history, but I know Yo Gotti is not the first one to argue for less conspicuous consumption for “hustlers”, and more old school financial savings. Before this crisis, parenthood played a good part in this change of behavior, because new parents will focus on what they will leave to their children. With the example of Offset in Clout: “I put two mill’ in the safe just in case, don’t go my way (no cap) / My kids gotta have money, not just me (Facts) /That’s selfish (It’s selfish)”. The same reasoning is made by the mother of his child, Cardi B, in Money: “I got a baby, I need some money, yeah / I need cheese for my egg”

In French, we would say they preach “wise family father’s money management”.

The Banker and his Wife by Quentin Metsys, 1514, at the Louvre

But the king of wise spending may be Jay Z, especially in his last solo album, 4:44. At age 47, Jay Z is not only an artist, he is a businessman who lives by his motto: “til you own your own you can’t be free” (I got the keys). He bought his cognac brand, his champagne brand, he created his streaming platform… The idea behind these investments is to own the tools that made his success and not to rely on others, like Hennessy or Apple Music.

To stop splurging and to reach steady wealth are for Jay Z political issues for the Black community. During an interview in iHeartRadio about the meaning of The Story of OJ, Jay Z said the track “is really a song about we as a culture, having a plan, how we’re gonna push this forward. We all make money, and then we all lose money, as artists especially. But how, when you have some type of success, to transform that into something bigger.”

In the Story of OJ, Jay Z gives his audience financial advice such as:

1. Purchasing a neighborhood before it gentrifies:

I told him, “Please don’t die over the neighborhood
That your mama rentin’
Take your drug money and buy the neighborhood
That’s how you rinse it”

Jay Z backs up this investment idea by the hypothetical revenue he would have made if he bought a building in Brooklyn: “I coulda bought a place in DUMBO/ before it was DUMBO / For like 2 million / That same building today is worth 25 million”.

2. Investing in artworks

Here again, Jay Z backs up with real numbers:

Two years later, that shit worth two million
Few years later, that shit worth eight million
I can’t wait to give this shit to my children

3. Having good credit

You wanna know what’s more important than throwin’ away money at a strip club? Credit

Credit scores have a long history of discrimination. Jay Z may be criticized for blaming conspicuous consumption rather than systemic banking practices against Black and Latino minorities. But he also has been praised for giving an alternative to the widespread codes of contemporary rap culture, even awkwardly pointing the Jewish community as a role model for other minorities.

The Story Of OJ is an important track about the financial struggles of the Afro-American community in the US, but I can’t help but thinking that Jay Z sounds like a 40 something wealth manager, who happens to be married to Beyoncé.

Bird on Money, Jean-Michel Basquiat, 1981 (Private Collection)

As I said, Yo Gotti also seeks financial longevity. But Jay Z overall has better advice than what Yo Gotti preaches in Recession Proof and his clip. The latter prefers to focus on the traditional assets of your typical rapper:

1. Cars

One mil’, two mil’, three mil’
Four cribs, ten cars, epidemic hit
That Corona shit, left no jobs (Damn)

Cars, even luxury cars, are depreciating assets. When you buy a car, the car loses its value steadily every year. According to an iSeeCars study of more than 7.7 million new and used car sales, the average amount of depreciation after five years is just shy of half the original price (49.6%). And according to autoguide.com, the top cars that lose their value the less are Jeeps and Toyota… But do you imagine Yo Gotti ditching a Lamborghini for a Toyota?

2. Watches

I spent a house for a watch

As Jay Z said: investing in real estate, especially in gentrifying neighborhoods may be a good idea. Buying a watch instead… Well, after some research, the answer is not as clear-cut as for cars. Some brands have good resale value, especially the old patrimonial brands such as Rolex or Patek. When it comes to Richard Mille (quoted by Yo Gotti in his track), the answer is more complex, as the brand only has 20 years, and right now is creating its bubble. Indeed, the brand recently increased its retail prices and cut its production, creating scarcity. So right now, bankrupted rappers who are reselling their Richard Mille watches might found a very receptive market. But for how long?

3 Go fully independent

Negotiations with the label
No cap, fifty mil’ on the table (Real, for real)
They know money can’t persuade ’em (Not me)
The deal’s just not in our favor (So fuck ‘em)
We’ll grindin’ up the long way

The rapper is applying Jay-Z's motto of ownership: in February his label became fully independent and the rapper earned ownership of all of his master recordings. In an interview with Vibe, he declares: “Ownership itself is personal. It’s a personal thing. But it’s also, of course, it’ll make you richer because of the state of what hip hop industry and where it’s going to grow. Again, it’s an asset alone, to leave to your family or your kids.”

This would be a risky move, but Yo Gotti believes in the future of the hip hop industry, while also investing in other business:

“Beyond music, Gotti owns Privé Restaurant — a luxury restaurant in his hometown of Memphis — and is an investor in FaZe Clan, a renowned esports organization that was profiled in the New York Times for its potential to ‘build a billion-dollar business.’”

Jay Z and Yo Gotti have one thing in common in the rap industry: longevity. As rappers are commonly perceived as “new money”, one may not believe they give sound investing advice. But as Jay Z says in Somewhereinamerica: “New money, they looking down on me” and I won’t make the mistake of looking down on Jay-Z. Here are some few takeaways from the two businessmen:

• To start investing and stop splurging, you need to perceive your resources as your legacy, either to your heirs or to your community.
• But at the same time, make sure your money makes you more self-sufficient and don’t leave to someone else the keys to your success.
• Don’t kid yourself and buy a luxury item thinking it is a sound investment: it usually is not. Especially a Lamborghini. Buy it for the scissor doors.

PS: Thank you for reading this article! As English is not my native language, feedbacks on spelling and delivery are more than welcome. And also on the content of the text of course.