How to Build Wealth Like Jay-Z (Without Selling Drugs)

Sean Carter, Jay-Z, Jigga, Hova. While he goes by many monikers, Jay-Z is undoubtedly one of the greatest moguls of all time. Starting from the bottom of the bottom in Marcy Projects in Brooklyn in a time where drugs were rampant, Jay was able to rise above it all and build a multi-million dollar empire from nothing.

From music, to clothing, sports and more, Jay is a great example of how to make it in America no matter what cards you were dealt. In this post, we're going to take a look at some of the keys to Jay's success. How was a poor kid from Brooklyn able to go from selling drugs to partnering up with some of the biggest companies in the world? Let's take a look.

1. Invest in Your Passion

Even during his drug dealing days, Jay-Z was always rapping. Jay has said while standing out on the corner hustling, he would think of rhymes and have to memorize them so he'd have them ready when he was able to get into a studio.

So while Jay's introduction to the world of entrepreneurship may have started from something illegal, he saw rapping as his way out. Instead of staying trapped in an unhealthy cycle of selling drugs (which would've likely led him to prison or death), he started to invest more time and money into recording music. And I think it's safe to say it paid off.

When you look at Jay or many other successful people, you'll notice a trend. They started by investing in their talent and passions. Think about what you enjoy doing. What are you talented in? What are you passionate about? If nothing comes up right away, think about something you'd be willing to do every day even if you weren't paid for it. Is it playing video games? Shopping? Analyzing different stock prices?

The beauty of society today is pretty much any hobby you have can be monetized. If you like video games, you can become a pro gamer or grow an audience by streaming yourself playing different games. If you absolutely love shopping, become a professional shopper. There are plenty of busy professionals willing to pay experts to do their shopping for them, or curate their style. Popular YouTuber Aaron Marino of Alpha M. actually started out as an image consultant and was able to build from there.

If you're into stocks, start a blog where you teach people how to get started investing. The bottom line is you should be willing to invest in what you're good at. If you're not going to invest in yourself, don't expect anyone else to either.

2. Have a Hustler's Mentality

Some people have a negative view of the word "hustler." They associate it with tricking people out of their money or trying to "get over" on someone.

But the real meaning of a hustler is someone who goes out and works hard and grinds to reach their goal. Nobody personifies that quite like Jay.

Through everything he does, Jay keeps the hustler mentality he developed during those early days in Brooklyn and it's no doubt one of the keys to his success.

Here's what I mean.

Jay-Z has been rich for a while now. He could've easily fell back in the mid-2000's and just been content with what he had. A beautiful wife, a reputation as the greatest rapper of all time and different business assets that would allow him to live better than 99% of the population for a very long time.

But he didn't stop.

Why? Because he's a hustler. Hustlers never just sit back and "settle" for what they have. They have to get more and keep building.

So he launched a sports agency, and now a music streaming service. And who knows how many things he's involved in that we're not even aware of.

Unfortunately, I'm not sure if the hustler mentality is something that just runs in your genes, or if it's something you can develop.

But if you have that trait, embrace it.

Don't stop hustling.

In order to build wealth and avoid staying complacent or worse, losing it all, you need to keep making forward progress.

There's a theory that Jay has mentioned called the Red Queen's Race.

I won't dive into the specifics here, but the Red Queen theory essentially says that in order for a species to avoid extinction, it has to keep moving forward. And if they want to get ahead to out-survive their competition (prey or predators) they need to evolve quicker than them.

The idea of hustling is similar. If you stay complacent in business or life in general, you're going to fall behind. Keep hustling.

3. Flip Your Income

If you listen to Jay's songs, you'll hear him talk a lot about "turning 2 into 4, 4 into 8" and similar lines. He developed that mind state during his drug dealing days, but was able to use the same concept in his legal ventures.

The idea is that you start out with X amount of something, then double it. And then you take that new amount and double that, and so on.

Here's the problem most people run into. After they're able to double that first amount, they get caught up in the excitement, squander their income away and then start again over and over. It's one of the main reasons people get caught up living paycheck to paycheck. You're starting from square one every time.

But if you take Jay's mentality of flipping your income, building wealth becomes a real possibility.

Let's take a look at how to use this concept in real life.

You get paid every week, or biweekly. After you cover all of your necessary expenses, you're left with $X amount of dollars. What most people do at this point is:

1. Spend it on something they don't need
2. Leave it in their checking account where it does nothing
3. Put it into a savings account where it does next to nothing

Instead, what if you were to put that money to work for you? Depending on your skillset and how much you want to risk, there are plenty of options. You could put it into stocks, which is the long-term play.

You could also go the Gary Vaynerchuk route and use that money to buy some stuff at a flea market and resell it on eBay. Then take the money you get from that, buy more inventory and flip it and repeat the process.

I like Gary's flip challenge because you can literally get started for zero dollars. Start by gathering up all the stuff around your house you don't use or need, then sell it. Use that money to buy more stuff you can sell and so forth.

The idea here is that you take your money, and "flip" it to make more money. It's almost like a simplified, more manual version of how compound interest works. The money you earn from your initial investment (your first profit) starts to earn money for you as well.

4. Don't be Afraid to Cut Ties

Jay-Z was part of one of the biggest breakups in hip-hop history when he and his former business partner Dame Dash split up. The two built up one of hip-hop's greatest labels, Roc-A-Fella Records together from scratch. Then for various reasons, they initially severed ties and went their separate ways.

The lesson you can take from the situation is you shouldn't be afraid to cut ties with people in your life if you don't see eye to eye on important issues, or if they're just having a negative impact on your life. This is particularly true in business.

It can be extremely difficult to cut ties with a business partner or someone you've been building with for years, but ultimately you have to look out for your best interest.

5. Network With the Best

There weren't a lot of wealthy millionaires hanging out in Marcy Projects during the 80's. So unlike some of the people Jay may find himself competing with today, he didn't grow up with a network of people to put him in power.

But over time, his network started to grow. Jay didn't pigeonhole himself into only being around people that looked just like him and came from similar backgrounds as him (although he has plenty of those connections as well). He branched out and started connecting with some of the brightest and successful people in the world.

Jay's connections are even more apparent when you look at some of the business deals he's been able to get into over the past decade.

From buying into the Brooklyn Nets, linking up with the The Cattier family for Armand de Brignac and his latest deal between Tidal and Sprint, deals this size don't happen without relationships with powerful people.

And it doesn't get much more powerful than being friends with a president.

There are a ton of different things to take from these lines, but what I want to focus on is the concept of investing based on your income.

When the song came out, some people said Jay was "talking over their heads" or that it's unrelatable because most people can't buy million dollar artwork. But anyone who thought that completely missed the point he was making.

The takeaway is to invest in things that will appreciate over time instead of cars, clothes or other things that won't be worth anything in four years.

But without going too deep, the thing I want to point out is that Jay's investing based on his wealth. He wasn't buying millions of dollars worth of art when he first got into the music industry. But as he built his wealth, he was able to invest in pricier things.

Too often, people think they have to be rich to start investing. That's not the case at all. You just have to invest based on your level of income and what you can afford. Sure you can't buy a Basquiat painting for $110 million, but you can buy a share or two of Facebook stock. Or put money into the S&P 500 fund. As you start to build your wealth, you'll be able to make bigger investments with larger payouts.

7. Let Your Actions Speak Louder Than Words

One of the things I respect the most about Jay-Z is he doesn't do a lot of talking. You rarely ever hear him talk about what he's "gonna do."

He just does it.

In most cases, you don't hear about his business deals until the ink is dry, and he doesn't get all over social media boasting about what he's working on.

And that's probably a big reason why large corporations and powerful people enjoy working with him.

It's simple. Put your head down, do the work and let the results speak for themselves.

8. Grow, But Never Forget Where You Came From

The growth of Jay-Z has been nothing short of amazing. But what's even more amazing is he never lost touch with where he came from.

He's constantly referencing Mary Projects, Brooklyn and the friends he came up with. In fact, he's been able to put some of those people into position of power to build their own wealth.

Aside from giving back to his community and all the philanthropic work he does, the idea of "never forgetting where you came from" is also evident in the way Jay does business and handles himself.

He's said in interviews that his street smarts have helped him tremendously in his business dealings.

Whether it's the gut feeling he gets about potential partners or always being aware of his surroundings, Jay's past helps him today and is shaping his future as well.

9. Focus on Ownership

From founding Roc-A-Fella Records to launching Tidal, Jay-Z has always recognized the benefits of ownership. And he's been talking about it in his music for years.

I can't think of many people that have been able to build wealth without owning something.

For a very long time, especially when Jay was starting, the concept of ownership when it came to musicians, athletes and entertainers was pretty much non-existent.

Musicians would sign deals where they literally didn't even own the music they were making. And when they worked with larger brands, they'd primarily do endorsement deals where they were paid a fee of some kind, but didn't have ownership over anything.

Jay-Z was one of the most well-known artists to break that mold. Here are just a few examples:

• Starting Roc Nation Records instead of signing to another major label.
• Launching Tidal instead of just working with existing streaming companies.
• Instead of taking an endorsement deal from Iceberg Apparel, he started his own clothing line Rocawear and sold it for $200 million 10 years later.

Instead of focusing on renting, making quick money or being an employee, shift your mindset into ownership. Whether it's buying your own home, investing in stocks or starting your own business, ownership is the key building wealth.

You can get rich working for a company, but you get wealthy by owning it.

10. Think Generational Wealth

The last song on Jay-Z's 4:44 album is called Legacy. The song serves as kind of an unwritten will where he talks about how he'd split up his assets among his kids and family.

The song pretty much explains how Jay has been able to build wealth, rather than just being known as a "rich rapper."

Remember the verse I quoted earlier from The Story of O.J. where he talks about passing down his artwork to his children? That's all about building generational wealth.

Wealth isn't built over a 10 year period. When you look at some of the wealthiest people in the world, they didn't start from scratch. They're continuing the legacy from their parents, grandparents and so forth.

But with the internet and the access to information available today, a lot of us are in positions where we can start building wealth for future generations even if nothing was passed down to us. And that's what Jay is doing.

If he wanted to, he could sell his stake in all the different companies he owns or is a part of, and he'd probably have close to a billion dollars. But he realizes that's not what it's about. His goal is to build an empire that he can pass on to his children, their children, and so forth for generations.

That's why he made his own clothing line instead of doing a bunch of endorsement deals. It's why he started Tidal rather than just listing his music on iTunes and Spotify. It's why he's launching his own VC fund, and continues to invest in new startups.

When you're thinking long-term, the financial decisions you make are much different than if you're just trying to be rich until you die. If there's one lesson you take from how Jay-Z became wealthy, it should definitely be this one. Focus on building wealth for future generations and you'll have a much bigger empire to show for it.