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Tax Master Network Briefs
 
 

The Rappers, the Toddler, and the Purse

 

  

You may not pay much attention to the People and US Weekly magazines spread across the coffee table in your dentist’s waiting room. (Celebrities! They’re Just Like US!) You may even take pride in ignoring them. But there are lots of opportunities buried in those chronicles of pop culture that you can literally take to the bank. Fortunately, you’ve got me here to keep an eye out on those sorts of stories so you don’t have to wade through the latest drivel about those awful Real Housewives of Dayton or whatever meaningless scandal du jour is occupying the headlines!

 

Today’s story involves a pair of new parents: the rapper Offset, the rapper Cardi B, and their daughter Kulture. (I’ll confess that I had no real idea who Offset was before coming across this story, although I wrote about Cardi B a couple of years ago for the Networker after she recorded an angry rant asking where all her tax dollars went.) Anyway, Kulture just turned two, and for her birthday, her loving dad gave her – an $8,000 hot-pink Hermes Birkin bag. Isn’t that just what every little girl wants? (I mean, Easy Bake ovens are so 1960s, right?)

 

Naturally, social media freaked out over the gift. What toddler needs an $8,000 purse? Especially when it’s the most sought-after handbag ever manufactured? The Birkin bag – named after the actress Jane Birkin – isn’t just a pricey fashion accessory. It’s one of the foundations of the velvet rope culture I wrote about her last month. (Fun fact: Birkin sketched the original design for the bag on the back of an airline barf bag while sitting next to Hermes CEO Jean-Louis Dumas.)

 

It turns out, though, that there’s real practical value in the gift – and not just because Kulture will have a place to put the keys to her new Mercedes when she turns 16. Believe it or not, Birkin bags are one of the soundest investments you can make. From 1981-2015, they appreciated an average of 14% per year. That’s better than stocks, bonds, gold, or even real estate over that 35-year period. It’s also worth mentioning that when Donald Trump’s fixer Michael Cohen went to jail, one of the charges was failing to pay tax on a $50,000 commission he earned for brokering the sale of a Birkin. (Think about that for a minute – it wasn’t a $50,000 gain, it was a $50,000 commission on an even greater gain!)

 

Let’s put it another way. At that rate, if Kulture holds on to the bag until she retires at 65, it’ll be worth just north of $35 million. And of course it’ll compound tax-free over that entire period. Now, collectibles are taxed at a special 28% rate, blah blah blah . . . but the point is, Offset didn’t just give his daughter a splashy gift to get attention on social media. He essentially gave her a hot-pink Roth IRA (albeit invested in a dangerously undiversified portfolio).

 

As it turns out, Offset may have an even better business sense than what it takes to achieve musical success. He’s an investor in the FaZe Clan, a professional e-sports team representing professional video gamers and content creators. (Yes, that’s a thing, and it’s lucrative as hell.) In the long run, Offset may wind up more famous for his business exploits than his music. He won’t be alone among rappers moving on to broader financial success. Sean Carter started out slinging dope in Brooklyn’s Marcy Houses project, and now he’s the billionaire Jay-Z. In Los Angeles, the rapper Nipsy Hu$$le made headlines for his entrepreneurship as well as his music, and told his fans they should be investing their money in 4-family apartment houses instead of bling.

 

What does all of this have to do with you and your business? I’m not going to give you an easy answer. But think about it and surely you’ll come up with some ideas. Maybe you’ll look to pop culture for more success strategies to share with your prospects and clients. Maybe you’ll look to collectibles to help diversify your clients’ portfolios. Maybe you’ll pay more attention to that distinguished-looking gentleman sitting next to you on the plane, if you ever get back on a plane. 

 

The fact is, business inspiration is all around you, and any magazine or newspaper you pick up can inspire you to new heights of success. You just have to keep your eyes open and your brain working to put the pieces together!

 

Automated TOS Update: Those of you who signed up for the new Automated Tax Operating System®, PLEASE make sure to click the links we’ve been sending you to the TOS Setup Intake Form. Onboarding your new Infusionsoft account takes several hours per member, so to save time we’re doing them in a single batch – and if we don’t have your information by next Friday, July 24, we’ll need to hold you until the next batch! You certainly don’t want that to happen – so don’t procrastinate and make sure to get us your information! Those of you who haven’t signed up yet, we’ll be setting up a wait list so you can join in the next batch, but we can promise it won’t open up until at least sometime in August.

 

 

 
 
 
 
 
Want to learn more about the Tax Master Network? Visit www.TaxMasterNetwork.com
 
 

Tax Master Network Briefs:

Vol. 3, Number 20;

July 17, 2020

 

The Rappers, the Toddler, and the Purse

  

Members Only

 

 




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Edward A. Lyon, JD,

Publisher

 
 
 
 
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Next Wednesday Business Development Call-In:  
 
Wednesday, July 22nd at 1:00 pm Eastern (10:00 am Pacific)
 
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