Shortly after rapper Ace Hood signed his first major record deal at age 17, financial planning wasn’t exactly at the front of his mind. He leased a new Cadillac Escalade and decked it out with 26-inch rims. He rented a three-bedroom condo in South Florida for $3,000 per month. And then there were the shopping trips.??“It was $1,500-$2,000 every time I hit the Gucci store,” he says, lounging poolside at the Dream Hotel in Manhattan. “I splurged and lived life how I wanted to live it. But anytime you don’t have a record out there that’s bubbling and you’re not doing much of anything, money runs low.”
Sure enough, the rapper’s free-wheeling ways only lasted so long. When his second album didn’t live up to its lofty sales expectations in 2009, he found himself spending much more than he was bringing in. He quickly lost his car, his apartment, some of his friends and nearly his career.
Today, though, things are looking up for Ace Hood. His latest album, Blood, Sweat & Tears, debuted at No. 8 on the Billboard charts; his lead single, “Hustle Hard,” is on the verge of going gold. But he’s still spending less than he did when his first album came out. The reason: a handful of valuable financial lessons he learned at the beginning of his career.
“Now, if I make $100,000 per month, I save at least $60,000,” he explains. “You definitely have to save for rainy days. You never know. It could rain, but then again it might storm. Hail might come. Maybe a tornado.”
Saving a big chunk of your take home pay, ideally at least one-third, is a rule of thumb championed by many financial advisers. To make room for those savings, it’s important to cut down on major expenditures, including fancy clothes and other luxury goods. That doesn’t mean you can’t enjoy your wealth; it’s merely a call for moderation.
In Ace Hood’s case, responsible spending meant replacing a gas-guzzling SUV—which he couldn’t afford when his lease ran out—with a zippy Chevrolet Camaro. He enjoys both vehicles, but the Camaro gets 29 miles per gallon on the highway, compared to the Escalade’s 18. The new ride makes cruising a lot more economical.
“I used to ride around for no reason,” he says. “I had a big truck, I didn’t care and I had money. I could ride all the way to South Beach come back and just chill.”
Better yet, he owns the Camaro. So there’s no danger of losing his primary means of transportation at the end of a lease, and therefore no risk of being unable to get to work in public transit-starved South Florida (the coupe, however, is a bit less convenient for transporting his two infant daughters and their accoutrements).
Another lesson: Don’t be afraid to ask advice. Ace Hood listens carefully to fellow Miami-based hip-hop veterans DJ Khaled and Rick Ross. Though Ross, a frequent member of FORBES’s Hip-Hop Cash Kings list, has been know to brag about “blowin’ money fast,” he and Khaled have told Ace Hood simply, “Make sure to save.”
In Pictures: Ace Hood’s Top Ten Money Lessons
Ace Hood also says he learned not to overspend on significant others. In 2008, he’d give his then-girlfriend as much as $800 every few days to fund extravagant shopping trips. No more.
“I did endure a lot of financial ups and downs,” he says. “And I thank God I was able to endure what I did when I was young, as opposed to me being much older. I was able to make it through.”
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