Put on Your Crown

by Queen Latifah

  We’d heard the horror stories about what can happen when an artist doesn’t read before signing on the dotted line and someone else ends up owning all your publishing and gets all the royalty checks. We didn’t want to do all the up-front work and sign our lives away to lawyers and accountants who were making all the real money behind the scenes. We wanted to build our own business and create an independent record label with all these amazing artists we’d found. The numbers didn’t lie. You have to pay a small fee to get the record printed up and sent to the stores, but after expenses you can make as much as $10 a record. With minimal success, you can reap lots of benefits.

  But we didn’t factor in the tremendous overhead and start-up costs. Getting your own business off the ground can be like throwing money into a vast pit. It never ends. And Shakim and I didn’t help ourselves. We had way too many employees on our payroll, more than ten, and very few of them were generating enough income to justify their salaries. We were both guilty of being too soft on our employees. We had friends and family members working for us—people we liked and felt deserved a shot—and we wanted to be loyal to them. It was hard for us to separate our emotions from our business.

  We threw hundreds of thousands of dollars into our new label. We spent $60,000 to host the Hot 97 Summer Jam and generate some buzz about our artists. We spent thousands more on radio promotion, tours, merchandising, vans, you name it. Instead of buying studio time, which was getting expensive, we decided to buy our own forty-eight-track recording studio. We took over Whitney Houston’s old space and called it Millennium Recordings. We redid the whole place. In addition to the main recording studio, it had nice lounges, two pre-production rooms, and a rehearsal space to prepare for touring.

  Good Money After Bad

  I’m not saying it was a bad investment, but now we were paying for our offices, the studio, way too many employees (including their salaries and benefits), and artists’ expenses. And boy, let me tell you, artists can be like thankless children. They are expensive to keep happy, and they have no appreciation or idea of what is being done for them, all before they’ve even dropped an album. As much as we believed in their talents, they had yet to generate a cent for our label.

  Meanwhile, my personal expenses were running high. I had my mom and dad and everyone else I’m looking out for. It was bad for Shakim, too. He put his own skin in the game, even though he had a wife and two kids to support. We were working on finding investors to raise some cash and help us cover our costs until we could generate revenue, but everyone who took to our idea somehow never got around to paying us the money for it. Still, Shakim and I continued to cover the costs, because we believed we’d raise the cash eventually.

  Sign Everything

  Somehow in the confusion and our zealousness to reach our goal, we weren’t thinking clearly and we had overextended ourselves almost to the point of bankruptcy. They were honest mistakes. No one was doing anything wrong. But in a short space of time, my bookkeeper had signed some $500,000 worth of checks out of my account, and I wasn’t keeping tabs on any of this.

  Then, bam! That phone call. By the time I scraped myself up off the floor, phone still in hand, I knew I had some serious housecleaning to do. I called my mother, and she calmed me down, like she always does. Then I called my accountant, who helped me come up with a plan to pay back the IRS in a way that could be maintained. What happened wasn’t his fault, either, because lots of bills weren’t going directly to his office. But we had to work out a new system.

  Around that time, I remember watching an episode of Oprah, where she talked about how you should never let anyone else sign your checks. I thought, “Damn, Oprah, why are you telling me this now?” I closed my account and opened a new one with a zero balance, and now I sign everything. Everything! No check is too small. No matter where I am in the world, my accountant prepares the checks, then sends them to me to sign. It’s well worth the extra time and effort, because I catch errors no one else would. The other day, I saw a check my offices had cut that was overpaying by more than $20,000. If I’d allowed it to go through uncorrected, that money would be gone forever. It’s not like the vendor would be in any hurry to pay back the difference. As if! With a little extra diligence, I’m saving myself thousands of dollars every year.

  That wasn’t the only change we made. Shakim and I had to take a hard look in the mirror, and at each other, and figure out what our priorities were and where we were going wrong. He told me that running the record label and the management company was too much. He was overwhelmed. He needed a life! We had to choose which side of Flavor Unit would be our focus. We decided to drop all but a couple of the artists we were managing. We were consumed with guilt about this. But guess what? Those artists found new management, and they’re thriving today.

  It was the same with our employees. I scaled back on my bookkeeper’s responsibilities so he could focus on getting his accounting degree at college. We also had to let a couple of people go, and I had a few hard conversations with those who weren’t working efficiently enough to justify what we were paying them.

  I felt horrible about this. Shakim and I were making emotional decisions about our business and keeping people around out of a sense of loyalty. But we weren’t doing ourselves any favors, and we weren’t helping our employees to grow, either. Instead, we were creating a bunch of dependents. I’m proud to say that everyone we let go ended up doing just fine on their own. When they realized they weren’t going to get that check anymore, they simply figured out their next move, hustled, and found themselves a much better fit. We should have done it a long time ago. All those salaries we were floating could have paid for my nieces’ college fees and then some.

  Shakim and I totally restructured our business, and it’s been great for us both personally and professionally. Our label has been thriving ever since. We’ve branched into movies, merchandising, and production. We’re seeing steady growth just as many major labels are teetering on the brink of disaster. Had we gone that route, our gravy train would have reached the end of the line by now. We’re both still a little too softhearted when it comes to employees and the occasional venture with friends, but for the most part we’ve been able to separate our feelings from our finances.

  School Yourself

  I also made a point of educating myself on the subject of personal wealth. A lot of us weren’t raised to know why one type of savings account is better than another. Shakim and I got on-the-job training. Life has been our college, and sometimes we had to learn the hard way. But if we’d been more proactive about getting our hands on the right information, we could have avoided a lot of pain.

  I went to the bookstore, as I often like to do, and browsed the shelves. There weren’t too many offerings catering specifically to women, which is why I decided to write this chapter. Somehow, money isn’t supposed to be something women worry about. But one title did catch my eye: Suze Orman’s The 9 Steps to Financial Freedom. Several captions in the table of contents spoke to me. I started reading it right there in the bookstore. She writes about all kinds of things that never even occurred to me, but made perfect sense. Even the fact that you should keep all the bills nicely folded and organized in your wallet, not crumpled up and scattered all over the place. It’s a small, simple thing, but it’s about something bigger: taking care of the money that takes care of you and not taking it for granted. Wealth is a blessing from God, and it needs to be handled with respect on all levels.

  Eventually I bought the book, took it home, and made copious notes about insurance policies, living wills, trusts, how to save, and which 401(k)s, annuities, and IRAs would be best for me. I called my accountant and grilled him about all these financial products I’d only vaguely understood before. I was determined to reach a level of financial sophistication. Nothing less than my future was at stake. I thought long and hard about my financial goals. I don’t want to work this hard when I’m sixty-five. I want to kick back and enjoy life, knowing I’ve tak
en care of my family and built a legacy for the children I hope to have one of these days.

  I wouldn’t wish that phone call on anyone. But as frightening as that going broke moment was, I feel like God was trying to tell me something. Often in church, the pastor says that God is going to give you only what you can handle. He’s not trying to put money in the pockets of people who haven’t gotten to a place where they can take care of it. He wants to bless you, and He wants you to make the most of His blessings. I think He wanted to bless me even more, but He also wanted me to wake up and pay attention to what was really going on.

  Quality of Life

  This isn’t just about materialism. For me, affluence doesn’t represent fancy cars, nice houses, jewelry, and all the toys. Sure, I enjoy these things, but they don’t define me. I care more about the financial security that wealth brings, to me and to my family. I want to be debt-free. I want to be able to provide for the people I love, as well as myself, and ensure that I have the freedom to do things for my spirit and not just for my pocketbook. I want to be able to travel, pursue creative projects that aren’t necessarily commercial, and support causes I care about, like education for inner-city kids. Accumulating personal wealth and taking control of your financial future is about empowerment, not stuff.

  This last recession just proves to me that we as individuals have to pay more attention. With all the greed on Wall Street and crooks like Bernie Madoff allowed to run wild with our investments and gamble our futures away, we can’t afford to be passive about our finances anymore. I know plenty of people who had millions and lost it all because they gave up control to so-called investment experts, money managers, accountants, and lawyers and got robbed. By not paying attention, they cheated themselves.

  I’ve made similar mistakes. It was a steep learning curve for me. I have a semester of college, and I’m street smart, but money came to me at a very young age, before I’d acquired any real investment savvy. I had some of the basics down. My mother opened an account for my brother and me at the Howard Savings Bank (which no longer exists) and taught us both how to write a check—something many adults in our community never learned how to do. Every week, we’d set aside some of our allowance and put it in the bank. Every birthday and Christmas, our grandmother, my mom’s mom, Katherine Bray, would send us a crisp new five-dollar bill (come to think of it, Nana Bray still does). That wasn’t money to blow; I might have taken out a dollar or two to buy candy, but we stashed most of it into our savings account. And I continued that saver mentality all through my teens.

  My dad also taught us some valuable lessons about how to manage a buck. When I was ten, my mom was away on a trip and we were staying with our father near downtown Newark. Dad was working double shifts, so we were basically latchkey kids, which was pretty common in those days. To keep us entertained, Dad would give us $10 and send us off to the center of town to spend the afternoon exploring all the toy shops and dollar stores. That money was to pay for lunch and a drink and bus fare, depending on how far up the street we got.

  We had a blast. It was my dad’s way of teaching us financial independence. He wanted to see how frugal we could be. Ten dollars could buy you a lot in a dime store thirty years ago, and he was interested to see what kinds of choices we were making about our spending.

  Long Ass Week

  I remember getting my first paycheck. I was fifteen, and I found a job at Burger King while I was still in school. I really wanted that job. There were plenty of fun summer jobs kids could take working in parks and day camps, but this was serious work, plus I’d get free food. I did everything from working the cash register to cleaning the toilets. I made $88.46 that first week. I remember because I knew exactly how many hours I’d worked, and I was shocked by how much of my money went back to “the Man.” Taxes, Social Security—everyone had to take their cut. I had to ask my mother, “What’s FICA?” “Where did all my money go?” I gave my mom a couple of bucks, bought myself a mix tape, and put what was left in my savings account. It wasn’t much, but it felt good, because it was money I earned through my own hard work.

  Two years later, the circumstances couldn’t have been more different. I wasn’t even signed to a label yet and my first record, “Princess of the Posse,” was playing on the radio. I got my first big check, a few thousand dollars, and I blew quite a bit of it. I even bought gold teeth! My brother and I used to try out these hip-hop looks that were big at the time, with all the chains and tooth grills, but between us we had only one gold chain, which we had to share, and the rest we had to improvise with gold foil. But gold teeth? It was ridiculous! I didn’t even get proper ones made at the dentist. I bought them at a jewelry store in the mall. They were the kind you just snap on. Needless to say, they disappeared within a couple of days. Money down the drain.

  When I was nineteen, I went back to my more responsible ways. I’d just released my first album on Tommy Boy Records, All Hail the Queen. I had four or five singles out, and Shakim and I were having quite the ride. We were on tour and making first $1,000, then $2,000, then $5,000 a show. We tried handling all our finances ourselves, sending a third to my mother after our expenses and putting the rest in our account, but eventually it got to be too much. We found an accountant at a big, reputable firm in Manhattan to manage our expenses. We thought we were straight, but one day we went to his office to meet with him and he told us there was no money left in our account.

  We were furious. I wanted to kill this guy. How could it be that an accountant—someone who is educated and gets paid extremely well to provide a professional service—would not at least notify us when funds were getting low? It made no sense. But as history would later prove, we had a lot more to learn. When it comes to your own money, you can’t assume anything. Even accountants have to be held accountable. Over the next few years, we went through a couple more accountants who were mediocre at best. Our current guy is great. He’s professional and honest. But we don’t just leave him to it. We treat our relationship more like a partnership and talk with him regularly about the state of our finances. We no longer let anything slide.

  Money Matters

  This isn’t about greed. Handling your business and taking care of your money is an important part of loving yourself. Too often we live in denial about our money situation. We don’t want to face it. We make emotional decisions about how we spend, maxing out our credit cards to buy shoes to make ourselves feel good. But it never works because the problem we’re trying to cover up is still there. Meanwhile, we’ve buried ourselves deeper in the hole. That’s not how a queen treats herself. Sure, she’ll go on a shopping spree now and then if she can afford it. But she gets her money straight first, because she knows there’s a lot more at stake than grabbing the latest “It” bag off the shelf. Financial security frees you up to take better care of mind, body, and soul.

  Of course, it’s different if you’ve got children and you’re struggling to put food on the table and a roof over their heads. It doesn’t get more real than that. My heart goes out to families that are facing financial hardship, especially in this recession. But even when you think you have nothing, if you educate yourself, you will learn that there are small things you can do to stretch a dollar and set aside a little money to save. You don’t have to be a slave to credit card companies and those crazy interest rates. There’s no need to take out a mortgage you can’t afford and end up in the streets because your home went into foreclosure. Ladies, you’ve got to own your crown outright—don’t pay for it through some extortionate layaway plan!

  When I was growing up, my mother drummed into me the importance of financial independence. She didn’t want to see me end up stuck in a bad relationship and dependent on some man for my survival. We knew too many women in our community who were trapped. They got married and had babies, and when their man started cheating, drinking, or being abusive, they didn’t know where to turn or where to even start. They had to find a job with no experience and no two nickels to rub
together. There’s nothing wrong with being a homemaker, if the marriage stays strong and your husband is able to be a good provider. But that’s just not the way I was raised.

  The Best Things in Life…

  Both of my parents always worked. My father was a cop, and my mom had a job as a secretary even when my brother and I were babies. Thursday must have been payday for my dad, because I remember we always got dressed up and went to a nice Chinese restaurant for dinner, and sometimes caught a movie afterward. But Mom and Dad invented all these other ways to have fun that didn’t cost a thing. Sometimes we’d drive to a nice neighborhood to look at the houses and enjoy the peace and quiet. Or my mother would pack up a picnic and we’d drive to some nearby park, set up the blankets and a tent, and pretend we were out on some adventure in the wilderness. Or we’d fry some chicken, make up some potato salad and Kool-Aid, and drive to the Jersey shore for the day. Or my dad would take my brother and me fishing or camping in the woods. It was all free, and these things gave me some of my happiest childhood memories.

  When my parents separated and Dad moved out, my mother could no longer afford to live in the garden apartment in Hillside we were renting, so we moved to the projects. Mom was too proud and independent to ask her family back home in Maryland for support, so she made sacrifices. But she had a plan. She went back to college to get a teaching degree. In between classes, she worked three jobs. She was a waitress and a maid at the Holiday Inn. She worked as a janitor, and she put in hours on the loading dock of the local post office, lifting boxes until she injured her back. She earned enough money to send us to Catholic school, feed and clothe us. A year later, she even saved enough to put toward a down payment on a small house on Littleton Avenue, far away from the projects.