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Need advice on finances? Ask a hip-hop artist
By Mindy Fetterman and Priyanka Dayal, USA TODAY

HOUSTON — Bun B held up his silver chain to show off the 4-inch-square, diamond-encrusted “B” hanging at the end. It flashed in the spotlight.

“If you’re gonna buy a chain for $30,000, be sure it’s not the only $30,000 you have.”

Good advice.

Bun B, who started duo UGK in 1987 with his friend Pimp C (before Pimp C went to jail and was later released), is part of a nationwide tour of hip-hop recording artists who are using their fame to draw young African-American and Hispanic fans to hear tales of the financial mistakes they’ve made and the lessons they’ve learned.

Between swapping stories about blowing money, the artists gave financial advice to a packed auditorium at Texas Southern University last weekend.

PHOTOS: Hip Hop’s financial tips

Despite the difference in tone and sometimes language, their advice was what you’d get from Merrill Lynch. Just more colorful.

“I took my homeboys to the club, buyin’ bottles, got the rims — you know what I mean,” said Slim Thug, 26, a Houston rapper whose prized possessions include a $460,000 Rolls-Royce Phantom. “Then I couldn’t be paying the rent! Homeboys can’t help you now.”

They’ve learned, they say, some indispensable lessons.

“It’s not about making money,” said Belly, 22, a Palestinian rapper who has had three top-10 hits in Canada. “It’s about keeping money.”

The Hip-Hop Summit Action Network was co-founded in 2001 by recording mogul Russell Simmons and Benjamin Chavis, former executive director of the NAACP.

As co-founder of Def Jam Recordings, Simmons helped launch the musical style of hip-hop with artists such as Run-DMC, Public Enemy, LL Cool J and the Beastie Boys.

The group’s early goals were to register young minorities to vote and to fight stiff drug-possession laws. But the organization has since evolved into a movement to teach young minorities how to manage their financial lives. This is the third year for its Hip-Hop Summit, which goes to six more cities.

“We talk about FICO scores and owning a house — owning a crib — and stacking your paper (i.e., counting your money),” CEO Chavis said. “We make financial terminology cool.”

Young minorities struggle

African-American and Hispanic young people struggle more than young white people when it comes to managing money, according to the JumpStart Coalition for Personal Financial Literacy, which surveyed 5,775 high school seniors in 2006 about their knowledge of how to save, spend and invest.

Money often isn’t discussed in their homes, and they don’t learn early about how to save or borrow wisely, the survey found.

Their families are less likely to own their homes than young white people are: Homeownership is 71% for white families, 45% for minority families, according to the Center for Housing Policy. And minorities earn less than whites, according to the U.S. Census Bureau.

On top of that, they’re more likely to have to borrow money to go to college because their families don’t have the money to pay for school, according to Demos, a non-profit economic research group.

As a group, young African-Americans and Hispanics have a lower “financial literacy” than white young people, meaning they understand less about interest rates, credit cards, mortgages and stocks and bonds, according to JumpStart Coalition.

They’re more likely to use a credit card, less likely to have a bank account and less likely to have investments than whites.

Among people younger than 36, “For every dollar of wealth that whites own, African-Americans own 6 cents,” said Thomas Shapiro, director of the Institute on Assets and Social Policy at Brandeis University.

The median net worth of people under age 36 is $8,300 for whites, Shapiro said, vs. $500 for young African-Americans. The difference in wealth is due primarily to homeownership: Whites are more likely than African-Americans to have bought their first home by age 36, he said.

“For African-Americans, it’s a five- to 10-year delay,” said Shapiro, author of Black Wealth/White Wealth. “Homeownership starts much later.”

‘Now turn to page 8’

Hip-hop artists are exaggerated, bigger-than-life characters who seem to spend, spend, spend — on the biggest houses, the most-outlandish jewelry, the most-expensive, elaborate shoes.

“We like to flash, and we’re flashing now!” said Free, who was a VJ on BET’s popular TV show 106 & Park and is co-host of the Hip-Hop Summits.

But their music, wildly popular with young people of all backgrounds, is seen by some as being “hypermasculine, homophobic and anti-woman,” Byron Hurt said in his documentary film Hip-Hop: Beyond Beats and Rhymes, which aired on PBS Tuesday. The film criticizes the violence, racial slurs and obscenity in some hip-hop music.

Simmons argues that hip-hop artists are “inspired by the things they see about America. They are the poets who see violence and homophobia and sexism and racism and materialism, and they express that. They are holding up a mirror to America, and we don’t like what we see.”

Simmons, 49, and Chavis, 59, want to use the drawing power of hip-hop for the better good.

“People put down hip-hop, but it should be lifted up,” Chavis said. “It transcends our culture.”

In between tales of financial success and failure from the hip-hop artists, pros from Chrysler Financial, the corporate partner in the Hip-Hop Summit, slip in little lessons about finances, such as the definition of net worth, the difference between a stock and a bond and the value of a 401(k) plan.

(Answers: Net worth is assets minus liabilities; stocks are ownership in a company, bonds are ownership of a company’s debt; and a 401(k) is a retirement account that grows tax-deferred.)

At the summit, Chavis called on the artists one by one, but every now and then, he told the audience to “turn to page 8” in their workbook or to a chart on another page to see how long it takes to pay off a high-interest-rate credit card. The crowd obeyed.

Chingo Bling, 27, a Mexican-American rapper from Houston who’s known as the “ghetto cowboy,” said he thinks young people can learn from what he described as “not mistakes, but lessons.”

One of them: “You can’t learn about money until you’ve lost money.”

‘We are privileged’

Raised in one of the poorest neighborhoods in Houston, Chingo was picked out of school for being a potential high achiever by a charitable group and sent to prep school in the East. Then he graduated from Trinity College in San Antonio with a degree in business.

Now wearing a black cowboy hat and yellow lizard cowboy boots with the Nike logo, Chingo is all about the demographic he’s selling to. His record, They Can’t Deport Us All, comes out soon.

He started by hawking his CDs at flea markets, where he found he had a “knack for selling.” He founded his own record label, Big Chile Entertainment, and now sells a line of baseball caps, boots and hot sauce.

“When I got my first check, I spent money to impress other people, like buying rims and things like that,” he said. “You can indulge some, but I invested in myself, too, in my record label, in my brand. At the end of the day, I want to still be standing, to still be in business.”

Belly, short for Rebellyus, figured he’s worth about $1 million. “Compared to some rappers, that’s nothing,” he said. But it’s not bad for a 22-year-old who lived in the slums in Beirut before his parents immigrated to Canada when he was 7.

He said he and other rappers have learned from experience, and they can pass that on.

“I’m trying to show (kids) that no matter how bad we think it is here, we are privileged in the Western world. There is no place here where there’s not opportunities to go from a shack to the top of the world.”

Fetterman reported from Houston. Dayal reported from McLean, Va.