50 Cent and Bankruptcy:
Was His Money a Mirage?

50 Cent and Bankruptcy:
Was His Money a Mirage?

The Money Coach explains how a millionaire can file for bankruptcy, and things aren't always financially what they seem

50 Cent and Bankruptcy:
Was His Money a Mirage?

Social media and the mainstream press have been buzzing recently about rapper 50 Cent and his Chapter 11 bankruptcy filing. If you’ve read any of the news coverage, or followed the stream of mostly snarky comments on Twitter or Facebook, you might not know what to believe about the entertainer and his finances.

Some people think that 50 Cent is flat broke and has spent his millions. Others say the Get Rich or Die Tryin’ artist is actually just fine financially; he’s simply using bankruptcy as a smart business move.

So which version is correct? The truth probably lies somewhere in the middle.

50 Cent Isn’t Dead Broke… but Don’t Believe the Hype About His Income

50 Cent is not, I repeat, is not dead broke—at least not on paper, not in terms of his assets or income, and not by any popular definition of the word broke. Still, whatever you previously believed he earned is probably vastly off the mark.

When you hear someone say “I’m broke,” you know what they mean: they’re talking about not having any money, about feeling cash strapped, or about lacking the funds to do something they want or need to do.

Life is going on for 50 Cent and he’s not out of money in the traditional sense of being broke. Last I heard, he’s eating well, he’s got a new movie and another album dropping soon, and he has a pretty nice roof over his head. Not to mention, he has more income and assets than most Americans.

Frankly, none of us currently know all the specifics of 50 Cent’s finances. But to assert that he’s flat “broke” is clearly off the mark.

As of now, here’s what we do know: In his bankruptcy petition, 50 Cent listed his assets as being somewhere between $10 million and $50 million. Having at least $10 million in assets definitely isn’t broke by my definition.

But next comes the tricky part. How much does 50 Cent owe? The artist recently revealed that his debts were $28 million. Those liabilities included everything from two lawsuit judgments totaling $23 million to more than $5,000 in electric bills on his mansion and over $136,000 owed to Bentley for his high-end car.

So if we assume that 50 Cent is “technically” broke—or insolvent, by bankruptcy court standards, based on his liabilities exceeding his assets—what does or doesn’t this tell us?

It doesn’t suggest that he has completely run out of cash or assets, especially since 50 specifically noted the following in Page 1 of his bankruptcy filing: “Debtor estimates that funds will be available for distribution to unsecured creditors.” Translation: Dude still has a pot of resources somewhere that he can tap.

But the preliminary overview of the rapper’s finances does shed light on an important reality: that most of what we thought about 50 Cent all along was a myth, or at the very least an overblown mirage manifested by the media, and also fed by the entertainer himself.

Bling, Bling: The Art of Boasting and Bragging

We’ve all seen 50 Cent—and countless other singers, actors, athletes and entertainers—blinging on Instagram, Twitter and elsewhere. With many rappers in particular, much of their brand is tied to the art of boasting and bragging—not just lyrically, but also physically, with material goods.

Rappers know they generate more publicity and fans when they flash wads of cash, sport gold jewelry and diamonds, hit the streets in tricked-out luxury cars, or show off their over-the-top mansions.

Let’s put aside for a moment questions about whether those cars and homes are actually fully paid for or whether they have loans and mortgages attached to them. What’s often more important to a rapper’s public persona is how much you can floss. It’s about the image—whether real, somewhat exaggerated or entirely invented—that projects you as hard, living large and in charge.

Erroneous Media Reports

But for high-profile personalities like 50 Cent, one of the unfortunate byproducts of living in a celebrity-obsessed culture is that superstars’ alleged earnings and net worth are often revealed or publicly discussed in the media. By contrast, the average Joe’s income and net worth remain private, more often than not.

The problem is that celebrities’ supposed earnings—as reported in the media—are often way, way off the mark.

And truth be told: celebrities don’t have the time, inclination or interest to chase after reporters and others trying to correct every erroneous story, denying or confirming every ridiculous report about their finances that pops up on social media.

Consider this: How many times have you read an article, listened to a radio report or seen some TV program about a mega-star and heard astronomical numbers being thrown about? A recent example: Momager Kris Jenner supposedly negotiated the mother of all reality TV deals in 2015 and now Kim Kardashian and the cast of Keeping Up With the Kardashians all got a hefty pay raise to the tune of a record-breaking, $100 million deal with E!

A variety of media outlets, ranging from Variety and Time magazine to CNBC and TMZ, all report this kind of “news,” so it must be correct, right? Wrong! If you believe all this madness, you’re just as gullible as the 10-year-old who says: “I saw it on the Internet so it must be true.”

Smart superstars know not to believe their own press. But the public routinely fails to get that memo. The latest case in point is what the public, and the media, believed about 50 Cent.

Just two weeks ago, the New York Times served up a fairly glowing profile of the hip-hop mogul’s business acumen, lauding his “exceptional business instincts.” Among other things, the Times wrote of 50 Cent: “He is the chief executive of G-Unit Records. He founded a headphones company, SMS Audio. And he owns part of a vodka brand and Frigo, a line of luxury men’s underwear. He also has a cologne, a sneaker brand and a video game series.”

This is all true, and 50’s profile in the Times was, in my opinion, still very deserved—yes, even despite his bankruptcy filing. Again, the truth is that in many ways, 50 Cent has been very adept at extending his brand and making money well beyond the music business and his reported 22 million in album sales. That’s laudable.

But the Times certainly isn’t alone, especially when it comes to a misguided fawning over celebrities based on how supposedly lucrative and plentiful their deals seem to be, or how much they allegedly earn.

What Is 50 Cent’s True Income and His Real Net Worth?

Take 50 Cent’s much talked about 2007 deal for the sale of VitaminWater to Coca Cola.

Only two months ago, Forbes put 50 Cent’s estimated net worth at $155 million, largely based, the publication said, on the VitaminWater transaction. (Obviously that inflated figure was laughably wrong and grossly off the mark, based on 50’s own recent financial disclosures. In light of the bankruptcy, Forbes now says it plans to revise its figures, calling the rapper’s troubles “a steep and sudden fall from financial grace.” Okaaaay.)

While Forbes said 50 Cent banked $100 million from the VitaminWater deal, the Washington Post put the rapper’s estimated haul from the deal at somewhere between $60 million and $100 million. Meanwhile, The Wall Street Journal said the entertainer’s take was in the range of $40 million to $100 million.

Needless to say, these are wildly different numbers.

So my point is: you can’t always trust all the figures about celebrity wealth or income that you seen thrown about in the media, even when those numbers come from established, respected publications.

Likewise, don’t believe everything you read about celebrities in books either. In 2010, author Dan Charnas wrote The Big Payback: The History of the Business of Hip-Hop.

Among other things, the book chronicled 50 Cent’s rise to stardom and his various business exploits. Want to guess what Charnas pegged 50 Cent’s net worth at, five years ago? Nearly “half a billion dollars.” Again, that was clearly way overstated.

Unfortunately, the American public nonetheless devours all manner of “news” about celebrities—including celebrity speculation, gossip, rumor and innuendo—and then accepts this tidal wave of pure hearsay and supposition as if it were the gospel truth.

Maybe the lesson for us all is to stop obsessing over what this athlete is making or what that entertainer is banking, and focus instead on our own financial situations. Besides, 50 Cent will likely be fine in time; he’s overcome much tougher odds before. 

Lynnette Khalfani-Cox is a personal finance expert and co-founder of the free financial advice site, AskTheMoneyCoach.com. Follow Lynnette on Twitter @themoneycoach and Google Plus.

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