Market Report: From Rihanna’s Wealth Play to Elon Musk’s Family Drama

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0:36Haley: But with Ernesta, you can send photos and dimension to Ernesta's design team and they help you get the size exactly right, completely free of charge. Hand selected by design experts, Ernesta rugs are beautiful, they're durable, and they're made for the way you actually live. Cut, finish, and delivered in as little as two weeks. Visit Ernesta.com and order five samples for only$10, and you will get$50 toward any rug of your choice. That is E-R-N-E-S-T-A dot com. This is Financial Tea. What's up, Zippers? Welcome back to The Market Report. This is when I give you the three stories you need to understand what is happening in pop culture, the economy, and your world this week.

1:24Haley: I'm Mrs. Dow Jones, your host, and let's get into the financial tea. Oh, and by the way, if you are loving this episode, make sure that you rate and subscribe to the show. We come out with episodes twice a week, and you're invited to be a sipper. Okay, but anyways, this week was sort of crazy. Rihanna's kids are officially in the family business, Americans are questioning the price of college, and the new Elon Musk documentary is showing us all by having a rich family is more of the same as having financial freedom. You guys, I always say it. But let's jump in. Okay, so story number one is sort of my kink because whenever I see a celebrity putting their kids in campaigns, I'm like, yes, you are getting that custodial Roth IRA.

2:06Haley: So basically Rihanna just put all three of her children in this savage ex-fenty holiday campaign. They're all wearing matching pajamas. The kids are obviously adorable. And yeah, my first thought was, I really hope that her accountant has opened those children a custodial Roth IRA. Because the woman who's saying, bitch better have my money, officially now has her children clocked in. RZA, Riot, and baby Rocky, they're so cute, are all in the campaign with Rihanna. They're modeling matching holiday onesies. And yeah, most people see a cute family photo, but I see potential retirement contributions.

2:45Haley: Well, let's talk about Rihanna for a second, because I love that she has built these businesses that can grow with her lifestyle. You know, she becomes a mom, she launches family pajamas, suddenly the family photo is also an advertisement for her own brand. Like she's doing a really good job monetizing her image. And a lot of times people just get paid to promote someone else's product, which she has made herself into the product and she's the owner, which I always respect. And of course, whenever I see a celebrity child working, my financial brain goes to custodial Roth IRA. And so let me tell you how this opportunity works because you can use it too.

3:22Haley: And it really is one of my favorite generational wealth building secrets because it's available for all of us as long as the kids have earned taxable income. So a custodial Roth IRA is a Roth IRA for your child with an adult managing it while they're a minor. So basically you're going to be in control. You open it and you put in after tax money for them and invest it. And then the investments grow tax free. And when your child takes qualified withdrawals in retirement, all of that money, including the investment gains, comes out tax-free. And it has the same annual contribution limit as your own Roth IRA.

3:58Haley: So$7 ,500 in 2026 if you're under 50. But you can't contribute more than your child's qualifying earned income. So you can't put in$7 ,500 if your child has not earned$7 ,500 at least. So Roth eligibility rules still apply. But it's really cool because it gives a child an opportunity to earn money today. And then some of that money can start working for their future. And because they're so young, it just has this insanely long runway that makes it really easy to get rich. Here's the example I'm going to give you. And it's crazy. If you invest that$7 ,500 every year for a child from age zero to 18, assuming that they qualify each year for the custodial Roth.

4:42Haley: And then you never add another dollar after they turn 18 and you leave it invested until they're 60. Add a hypothetical 10 % return. It could grow to almost 19 million tax-free dollars when taken out as qualified retirement withdrawals. So they're putting in around 135K and they're getting out 19 million tax-free. And of course that return isn't guaranteed. And those are future dollars before accounting for inflation. But the lesson here is that starting early really gives your investments more time to grow. And you don't have to be Rihanna and putting your kids in a Savage X Fenty ad to take advantage.

5:22Haley: Like if your teenager works at an ice cream shop over the summer and earns$2 ,000, you could contribute$2 ,000 to their custodial Roth IRA while they keep their paycheck. So it's also cool because it can like encourage them, they could put their own$2 ,000 in it. Or you could be like, hey, whatever you make, I'm so proud of you for working, I'm going to match it. So they got that money for going out with their friends, and you can give them a head start on retirement. But they also could just contribute themselves. Or maybe you own a business and your child does legitimate paid work for it has to be legitimate.

5:57Haley: So like, if you sell children's clothing, and they model for your website, you can do this too. But make sure that you show them the account, explain what they own and let them understand that money can buy something today, or it can help fund their life leader. I feel like that's just such an important lesson. And that's the part I want you to take from Rihanna. Because you may not be able to hand your child a business empire. But you can learn the tools and start with what you can afford and then give their money time to grow, which honestly is going to give them such a leg up. So yeah, even if their modeling career begins and ends with your family holiday card, there is a lot to learn from Rihanna here.

6:35Haley: Okay, our second story is about college. And like, is college worth it? Because there was this crazy study that came out this week from Gallup that only 31 % of people think that college is worth it. And by the way, in 2013, that number was 70%. So that is a huge drop. And I was really interested in this story because a lot of the work that I do is about the new American dream, right? Like our parents generation, their financial experts like Sue Zorman and Dave Ramsey, they were giving advice for a different world. Like, you know, wages have increased 7 % since 2000, but the cost of living has increased 67%.

7:14Haley: We've got student debt, we can't buy houses, like we just live in different times. And so we need different financial advice and strategies to make it and succeed in this world. And I think that questioning college is a really good place to start. That being said, I think that like at 18, I needed college, like I personally really needed the training wheels, I was not ready at that time to start adulthood, I needed that transition moment, because I don't even think at 21, I was ready to start adulthood, like it took me a long time to get there. And so for the people who are at 18 and like ready to hit the ground running, of course, like go to trade school, avoid college, just like start your career.

7:54Haley: That's awesome. But if you're someone who maybe does need that transition, you could go to community college for two years and then transfer to a more name brand school. You could also be really thoughtful about which school you're going to and why. Like, I don't know about you guys, but I definitely was just seduced by like the vibe of the college that I went to, like I truly made it a magical experience for myself when I got out of the car at Wesleyan. I was like, oh, I feel it in my bones. I'm supposed to go here. But then when you think about the fact that like these schools are costing anywhere from like $65 ,000 to sometimes$100 ,000 a year, it should be less about the vibes and the fall foliage and do I like sweatshirts and more like, oh, well, does it have this degree that I like and that is actually, you know, creating opportunity for me?

8:45Haley: Do they have a great alumni network where they really provide internships? I think that internships are a huge reason why people should go to college because A, you can make a ton of money from them. Usually they're either unpaid and you got college credit or it's like if you're in a finance internship, it could be like$55 ,000 for the summer, which is crazy. And you've got a huge leg up in your career, like versus starting from scratch, you really will have those connections and have built this whole network for you to really rely on, which I think is amazing. But I think you also have to understand that the diploma isn't a guarantee ticket into the career you pictured or the earnings that you pictured.

9:21Haley: And that's why people are so disillusioned by college, because right now, so many people who have gone to college are now what they call bachelor degree baristas, where they can't find jobs in the industries that they were studying in. And so they have these jobs that you don't actually need a college degree to have. And there's nothing wrong with being a barista. It's just like when you think about how much money you spent for your degree, you're like, wait, what am I doing here? I just think it's something that you can no longer be passive about. Like my thought on the new American dream is that everyone really is choosing their own adventure.

9:55Haley: And in order to get the most out of it, you have to be savvy and really thoughtful about those next moves that you're making. And so like, instead of just going to college, you need to know, oh, I'm going to this school to get this degree, because this is how much money, you know, people in this degree make. And also I'm going to get this access to these, you know, internships or whatever, that's going to set me up to succeed there. And even with all that, it might not work. But I just think that we tell people to dream big, but we need to also tell them what the dream costs. So like, if you have someone in your life who's thinking through this question, go through it with them.

10:34Haley: It could honestly change their lives because otherwise they could just be saddled with all the student debt like the rest of America with no chance of getting out of it. So that's what we really want to protect against. And by the way, if you already have student debt, this isn't a judgment on decision you made at 17. Like, trust me, I'm so lucky that I didn't have student debt, but I would have had it. I would have made the decision too. But tell me if you want an episode about dealing with the debt you have now, because I could definitely bring in some experts to talk about student debt. I know a lot about it.

11:00Haley: But also let me know in the comments, would you choose your college again at today's price? I was thinking about that and I really don't know. Okay, well, let's wrap it up with our third story, which is about Elon Musk. I mean, Elon really was on one last week. He was like disrupting all of telecom, causing issues with Verizon and AT &T because he wants to start a phone network with his satellites, but also his documentary came out and it's four hours long. It's from the same person who did the Scientology documentary. And it's really crazy. And in it, his former wife, Justine Wilson, said that he asked her to tell their daughter, Vivian, that he would always love her.

11:42Haley: And then he cut off Vivian's health insurance the next day after Vivian came out as transgender. And so I don't know, this just really hit me because I feel like saying I'll always love you, but then needing to discuss the benefits package of that is just very interesting. Like, you know, obviously, Musk didn't participate in the film, he's called it a hit piece, his lawyer has started legal action. It's also being blocked from distribution, which pisses me off, because I'm like, put this on Apple TV. But the bigger point here is that if that account is accurate, we are talking about a man with extraordinary wealth withdrawing access to healthcare from his own daughter.

12:21Haley: Obviously, the financial issue here is not, could he afford it? It's more who gets to decide. And that's the part that I want to talk about. It's something I think about a lot with whenever there's money that you're relying on that's not yours, you're owned by that person. And so when people hear rich family, they assume that you're set for life, but you can be surrounded by money and still have very little control over your own financial life. I write about that in my book. That happened to me where I grew up with means, but until I was financially independent, I didn't have choice over my life, you know, and having someone who pays for everything sounds fabulous until you need to know whether their support would survive a decision they don't like, like, is it I want you to have a good life?

12:59Haley: Or is it I will fund the life I approve of. And that really can keep you stuck in a box. And they're really different offers. Like imagine you had a partner that said, don't worry about working, babe, I'll always take care of you. But it's like, what does that actually mean? Like, do you have money in your name? Do you have joint access to the accounts? What happens if you separate? Like, babe, I've got you obviously sounds amazing to hear, but I want to see the paperwork. And I hope that you want to see the paperwork too. And look, you don't have to be suspicious of anyone to understand the arrangement that you're entering.

13:37Haley: And I also realize that people become financially dependent for all kinds of reasons. Maybe they're raising children or they're caregiving or they have illness and someone using that dependence against you is their responsibility. But I think that having your own financial foundation where possible just will only give you options and is the right choice. Being close to wealth and having financial freedom are two very different things. And here's a question and there's a question here for people with the money too. Like, are you helping someone or are you buying yourself a vote in every decision they make?

14:08Haley: And why do you want to do that? Like, If your generosity disappears, whenever someone disagrees with you, what exactly were you offering? I personally want my money to give the people I love more freedom and just more experiences. But that includes freedom to disagree with me. You know what I mean? Like your net worth is not a character reference. You can build extraordinary companies and still be accountable for how you treat people. And so, yeah, I just couldn't believe that he did that. And I know that we started with Rihanna's kids and the opportunity to build wealth for the next generation.

14:42Haley: But this story sort of raises the other question of like, once your family has money, who gets to control it? Because I personally think the goal should be to give your kids a head start, but not a lifetime of asking permission. That's very different. So yes, zippers, make sure you subscribe. We'll be back next Tuesday. That's your market report. Rihanna's kids getting a head start. College is getting a price check and being related to a billionaire. still requires reading the fine print. The thread through all three is know what you own, know what you're paying for, and know who controls the money.

15:17Haley: See you next week. Oh, and let me know in the comments, would you choose your college again at today's price? Tell me and send this episode to a friend who needs the financial tea. I'm Mrs. Dow Jones. Stay rich.

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