How Kanye Can Pay Off His Debt (And You Can Too)
The Cusp finance expert Rob d’Apice thinks it’s time he levelled with Ye when it comes to his cash.
Ah, Kanye. The man is clearly a genius. And I mean the savant-style genius that is incredible at one thing and surprisingly deficient in others, like basic social etiquette, picking child names, letting people finish and apparently, personal finance.
Here’s the deal, Kanye. I help you get rid of your debt, and you help me become an incredible (albeit somewhat misogynistic) rapper. It’s super easy, actually.
I write this to you my brothers while still 53 million dollars in personal debt… Please pray we overcome… This is my true heart…
— KANYE WEST (@kanyewest) February 14, 2016
Here are the eight things you need to do:
#1 Turn off the tap
First things first: you need to stage an intervention. On yourself.
In order to get your debt down, you need to make sure that you definitely can’t make it any bigger. So cut up your credit card. Remove access to any other type of debt you could use to spend. If you’re really worried about needing credit in an emergency, you can put your credit card in water, and keep it in the freezer. That way you’ll need a real good reason to use it again
Seriously though, I’m sure Kim would spot you if it was a real emergency?
#2 Shrink your spending
Uh, stop buying furs and houses. Don’t send your assistant to Italy to buy Kim 150 presents for Christmas. And maybe put a parental lock on your iPad, so North doesn’t keep buying apps. Yes, this actually happened.
You need to identify a few things you spend regularly, and cut them. I suggest you go really hard for one month: try to eliminate as much spending as possible (see the Money Detox I’ve suggested in the past). Once that month is over, figure out a few things that you didn’t really miss, and cut them forever.
#3 Minimise your interest
Interest is really expensive. Most credit cards rock a 20% interest rate. On a $10k debt, that’s $167 per month that you are throwing down the drain. Or on a $53m debt, it’s around $900k per month. Kanye, seriously. Call me.
An easy way to dramatically reduce your credit card debt is by finding a new credit card with a Balance Transfer offer. These are promotions where the bank does not charge interest (or charges very low interest) on balances brought to the new card, and a card like this could save you a stack of cash. These promotions change regularly; you can do some googling to find the best rates.
#4 Use the 20% Rule
This is simple: as soon as you get paid, put 20% of your income straight into your debt. Then work out how to live off the rest. As long as you’ve got your food and shelter covered, you’ll be fine – the 20% of the things you don’t buy from here on in, you probably don’t need.
Kanye, given you probably earned around US$22m last year, you just needs to push US$4.4m into your debt per annum. Unfortunately, that doesn’t make much of a dent in US$53m debt.
#5 Free up some extra cash
Find a way to liberate some money. You’d be surprised how easy it can be to make some quick bucks:
–If you have any designer clothes you no longer wear, flog them on eBay.
–Sell your old mobile handsets – they can be worth hundreds.
–Find other electronics that you’ve abandoned: cameras, laptops, video game consoles and sell them, too.
–Perhaps consider downsizing your $20m mansion
#6 Find an extra income source
There are a bunch of odd jobs you can do to bring in some extra bucks. Ramping up your hours (if you have a casual job), or taking on something extra on the side can really help you knock down that debt fast. Get creative. You could drive for Uber, or rent out your room on AirBnB (find somewhere else to crash in the meantime), do some tutoring, or find an oddjob on AirTasker.
#7 Have free fun
Kanye! Life is rich and wonderful and beautiful! You don’t need to buy Kim all these fancy things in order to be happy!
Work out what you love doing that doesn’t actually cost much, and do more of it. Exercise is awesome (and better health is definitely great for your bank balance). National parks and beaches are both free and great. An awesome home-cooked meal is fun and inexpensive.
#8 Reward yourself
Set a goal for yourself for when you pay off your debt, or when you reach a particular milestone (e.g. when you’re halfway there). Treat yourself to an amazing dinner. Or a new gadget. Or a little holiday escape…
I am ultra light beaming right now. So many people have called or emailed to help today hedge fund guys billionaires etc…
— KANYE WEST (@kanyewest) February 15, 2016
OK, hold up. Forget everything I’ve said. Looks like Kanye got bailed out by rich people. Typical.
Rob d’Apice is a co-founder of Sage, a new way to save heaps without thinking about it. He has trained as a financial planner, worked as a management consultant, and struggled as a serial entrepreneur. Rob presented the money segment Insufficient Funds on FBi Radio. He is also a bit of a geek.