Sunday, June 26, 2016

Keep Money Smelling Mothy?

                                  Keep money smelling mothy?

While I know he's currently being hated by the entire world right now (#Lemonade) , I'm not afraid to say Jay-Z's music raised me. While I've never met the man, his music was the soundtrack to my teenage years. I rap entire albums by heart!  I remember where I heard songs for the first time! I even was willing to lie and say that Nas’s diss song “Ether” was trash (Honest moment: greatest diss song ever)!  Now that you understand the level of a jay-z stan I am. Imagine being a young man and hearing "keep money smelling mothy" on a Jay-Z record. One interpretation is that HOV was telling his audience to save their money and seeing as his “alleged” drug dealing audience couldn’t take their drug profits to the bank, Jay-z suggested that they put the money in their closet. The mothy scent comes from the moth balls that old people line their houses with to ensure that moths don’t eat their treasured garments.  It was the game plan for what I needed to hear for what to do with my money. I knew just what I was gonna do with my money, hide it in my closet. (To the would be jack boys, I have since gave up this practice) Now if you have any financial brain you understand why this isn't a good idea. First Jay-z was talking about putting his “alleged” drug earnings into his closet for safe keeping because let's be honest a young black man with no job would be a little suspicious walking into a bank depositing over a $100k. And since I was a 15 year old kid depositing his lose change from his part time job it  wouldn’t cause any red flags, I should’ve input this money into the bank.  Based off what I’ve learned from watching crime shows, the life of a drug dealer can be an unpredictable one. One minute you can be in the club popping bottles of Ace of Spades and the next you’re sitting in that cold cell. While we non drug dealers don’t have those type of lows, we can understand why Jay-Z would advised his community to save for that rainy day. Life is a long marathon and there will undoubtedly be lows. It’s important to always be saving money because just like drug dealers can’t forecast police raids, you can’t forecast loss of job or medical emergencies.

Most banks give you at least 1 % to keep your money in their banks. But if you know you’re not going to need the money lock it away in certificates which offer a higher rate of return. Certificates are no-risk and moderate reward savings account. But it allows you to gain higher interest for money that would be just sitting there in a lower interest rate savings accounts. By this point you should have an emergency fund saved up (at least 6 months, but now start working for 12!) so now if you're saving to buy a house save that money away in a certificate allowing you to gain compound interest on money you know you won't need for a couple years. It’s also saves you from losing what you put in. The only drawback is having that money locked away for the length of the certificate. Certificates can be ended sooner but there are penalties for early withdraw.

I take all of my dollars and change to the bank, I don't allow this money to sit long in jars because I'll miss the potential interest. So instead of having a huge coin bucket, I empty the change out and take it to the bank periodically. While coin jars are great mindless savings accounts, they don’t provide the compound interest that a bank would. Am I talking about making thousands of dollars off of the change that’s usually left in your car? HELL NO. I’m talking about making the most you can off the money you have. This can be a lot or it can also be a little bit depending on the funding you have in the account.  But what I can tell you is that you won’t be making any money off of the money just sitting in your closet. You don't deal drugs, (if so, stop polluting your community)..... So don't be scared to take your crinkled dollar bills to the bank each week/month. Don't account for that money in your normal savings, but create a certificate to immediately   toss the funds into for savings.  By locking the change away you force yourself to forget about the money and continue working for more savings. Of course you’re not saving for event lose your re-up or lawyer fews like the old jay-z was but you need to have a similar mindset.

 Thanks for the life lessons Jay-Z!

No comments:

Post a Comment