No money, no mansion. It’s as simple as that. Now how about that for a rap song?
Young Buck has been going through it for some time now. Instead of heeding the advice to stash money away while at his prime, he goes and blows it all away. Well, s*** hit the fan as the IRS mandated that the rapper leave his Tennessee home on May 16th in order to collect funds for his estimated $334,000 IRS debt.
TMZ reports the details on the situation:
The details surrounding the eviction are unclear — however, court docs show the judge in Buck’s bankruptcy case signed off on the sale of the house … and ordered that the proceeds go towards paying off his massive $333,975.69 debt to Uncle Sam.
It was all good during the height of his career in G-Unit. And in typical hardly wealthy fashion, he let those six-figure checks go to his head, carelessly not planning for his future and executing a financial plan. Now at the age of 31, he has to figure out the means to survive for himself and his family with a drastically more difficult situation on his hands.
Why Jail Time is Nothing Compared to Debt
The biggest crime of all is neglecting wealth preservation. Whenever you have excess money after taking care of the bills, there are the following responsibilities:
- Debt Eradication: As you can see in Young Buck’s case, it’s important to clear debts. While debtor’s jail isn’t practiced in this country, there are many prison-like consequences to debt. Your credit score is affected which practically ties to everything, and they can even dock money from your paycheck. If it’s the IRS, you’re officially theirs, as nothing is spared. Even if money is tight, a repayment plan must be made in order to keep your credit in good shape.
- Investing in Yourself: No one wants to be working at 75. Unfortunately, it’s going to be the reality for many of us whether we choose to face it or not. A retirement plan should be set in place focusing on conservative investments. If you have children, you should have life insurance. With the more excess money you have, the more aggressively you should invest in yourself and your children if you have any. Trusts and education funds are a must and should come before clubbing, strippers, designer bags, fancy clothes, pricey gadgets, etc.
It still baffles us how these entertainers and athletes, especially, have no contingency plan. They work in the most unstable of industries, yet they refuse to create a worst-case scenario plan or a Plan B. What if my career fails? What if my money is reduced to 5% of what I earn today? What do I want to never worry about in my life again? If these celebs and other hardly wealthy individuals would do this, they would discover that they:
- Don’t want to be in debt
- Want the basics
- Want a comfortable life for themselves and family the rest of their lives
You cannot keep the same mindset that you had if you want to progress financially. Whether you hit the lottery or earnestly attain wealth, you must change your mindset, environment, and habits to KEEP or GAIN YOUR WEALTH
The Go-To Excuse
The go-to excuse for many hardly wealthy is that their money is for spending as you “can’t take it with you to the grave”. Yes, that’s true, but there’s too little responsibility in that line of thought. Try telling that to your teenager when it’s time for them to go to college, and you have nothing to contribute. Try telling that to the IRS when you’re in debt. Try telling that to the landlord when the rent’s due and you can’t pay it. Try telling the bank that when you’re hoping for a loan. Try telling that to your parents when you’re at your wits end and need a helping hand. We’re ok with a reasonable splurge or two for the average person on a middle-income budget. (See our “Are You Hardly Wealthy” Post) It’s also fine for celebs and athletes, but it’s simply not true that you can get any and everything you want and not expect it to bite you in the you-know-what when you don’t have the two aforementioned responsibilities taken care of first.
Everyone should have a budget period. It might be $100 a month for some and $100,000 for others. Credit cards should not be used by the hardly wealthy as there’s simply no connection with financial responsibility. Most Americans in general buy too many things that they simply cannot afford, blinded by the large available balance. However, that balance is not money, it’s debt. Purchases should have nothing to do with your credit card balance and everything to do with your bank account balance and current debts. Most people including celebs and athletes should be forced to use their own money, as high limit credit cards have people losing their rationale.
Young Buck didn’t learn the lesson in time. Luckily, our Minority Fortune readers can. Be financially responsible. Confront your debts. Address your retirement.
*Image courtesy of Diary of a Street King.
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