MC Hammer Rags to Riches Then Broke to Stable
Stanley Burrel, better known as MC Hammer, has been the subject of one of the most prolific ‘rags to riches to rags and back’ stories. He is the most famous American hip hop artist in the late 1980s until the early 1990s – remembered for his flashy dance moves as well as his hit songs “U Can’t Touch This” and “2 Legit 2 Quit”. Hammer was considered as a pioneer of pop rap and during that decade, his fame earned him a minimum of $30 million annually. Let’s find out how he managed to spend it all up, spiral down into a $13 million debt, and how he achieved financial recovery over the years by diving more into the hip hop icon’s story.
A hardworking man from humble beginnings, like many others who had a taste of sudden wealth, Hammer was unprepared and unequipped with the necessary knowledge and practices to utilize his earnings to its best potential. When someone who has endured having nothing for a long time comes across a huge amount of cash, the first thought would be to spend it all up on things he hasn’t had before.
As someone who has been through the same, I can attest that the temptation is indeed very hard to resist. Lucky for me my eyes were opened to the reality that nothing lasts forever especially money if we do not take care of it. I realized this just in time right before I lost everything I had, but some people aren’t as fortunate. Now I choose to live my life helping others learn financial literacy so that they wouldn’t have to go through the same hardships I have. You never know what would happen in the future, which is why it is vital to practice smart money management and make sound investments. May you get a lot of valuable lessons from this cautionary tale.
Born on the 30th of March 1962, MC Hammer was raised in a small apartment in East Oakland. Growing up poor, him together with his parents and eight siblings lived crammed in the three-bedroom housing project. At the age of 11 he would wait outside of coliseums, selling stray baseballs while dancing to the tunes of a beatboxer to earn some cash. The youngster was determined to help his family and played as a batboy for the Oakland A baseball team from 1973 to 1980 with the nickname “Hammer” for his resemblance to Hank Aaron, A.K.A. “The Hammer”. On the road with the A’s he acquired the nickname “M.C.” for being a master of ceremonies, performing at various clubs. He wanted to become a professional athlete but didn’t make the cut, and instead joined the Navy serving for three years until his honorable discharge.
MC formed a Christian rap group performing self-written songs, honing his musical talent. The little venture didn’t take off and the group disbanded but with his determination and passion for music he took the risk of borrowing money from people he knew from the baseball industry to start his very own independent label – the Bust It Productions. The songs he released garnered the attention of the major record label Capitol Records. Shortly after signing to the company, Hammer’s name and works became known around the world, becoming one of the most famous hip hop artists of all time.At the peak of his career, he earned $50 million in a single year but it all vanished in an instant. Hammer filed for bankruptcy in 1996.
Hammer surrounded himself with bad advisers, even hiring his inexperienced brother as his financial manager. He hired over 200 staff and an entourage of 40 people, putting a roof above their heads and keeping them on a payroll to help support their families – this feat cost him $500 thousand a month. His heart was in the right place, but it can’t all be compassion for you will be the one to suffer in the end if you don’t manage your resources wisely. One can say that he has what we call the “savior” complex, trying to save as much people as he could from their financial situations; saviors often end up becoming poor themselves and none of those whom they help will come back to save them. It’s not a matter of being selfish but you should always look out for yourself first because reality is, most of the people around you are insincere and are only around for their benefit.
Aside from helping others, Hammer was also guilty for careless indulgence in luxury items including a lavish estate, 19 thoroughbred race horses, a private jet, two helicopters, a limo, several luxury cars, expensive clothes, and many other big ticket items like the money would never stop flowing. He also lost a significant amount from lawsuits of copyright infringements during the peak of his fame. The spending spree ended with a debt of over $13 million, forcing him to sell the estate for a fraction of its building cost to pay it off.
Trends changed but Hammer failed to adapt. By the mid 1990s the style of hip hop took a drastic turn opening a new era for the genre and his music quickly became a relic of the past. Needless to say, the cash flow came to a sudden halt. Despite the setback, Hammer didn’t stop grinding for money finding new ways to earn and achieve financial recovery.
Learning from the past he put his entrepreneurial hat back on and invested in various business ventures including tech start-up companies, managing to come out of bankruptcy and back to stability. Hammer now lives his life as a changed man with a clearer financial perspective. You see even when you face the darkest days of your life, it is always possible to claw your way back up. It is never too late for a fresh start, but prevention is better than cure. Equip yourself with money smarts now with this free e-book: https://junpasion.com/blueprint-to-financial-freedom/
Here’s to your success!