💰 What Rihanna taught us about saving money: The 60-20-Double-10 Rule

0:00When Grammy-winning icon Rihanna walks into the club, she gets a table. When she walks into the Armae store, she gets the bag. But in 2009, Rihanna almost walked into bankruptcy court because 80 % of her money had disappeared. Financial disturbance. There was a real estate trauma, a scandal with sticky-handed accountants, and one shockingly bad world tour. But then there was one saving strategy that saved bad girl Riri, and now she's a billionaire. It's called the 50-30-20 rule, and we tweaked that rule for the post-pandemic reality of our inflation situation because even when it's raining money, you need a savings umbrella, Ella, Ella.

0:32Hey, hey, hey. A savings umbrella. Okay, no more singing or Rihanna's gonna stop watching. Don't do that, Rihanna. Because the new secret strategy for savings is the 60-20-10-10 rule. This is the best cha-ching yet, where we reveal the money secrets of the world's most famous stars. Smash that button. Done. Better have my money. Yes, we have your money. Stick with us for the next nine minutes. Robin Fenty of Barbados. If singer-songwriter Rihanna had a LinkedIn page, then that's the official name that would be on it. And yes, in Barbados, it's pronounced Rihanna, not Rihanna. And back in 2009, at just 21 years old, Rihanna's LinkedIn resume was shining brighter than a diamond.

1:11Jackie, sprinkle on some context, please. Four studio albums, a Grammy, and a Hot 100 number one song with Jay-Z. And a world tour. Yeah, she can legally drink for the first time, and her bank account just passed eight digits with two commas. And now, with that$11 million in the bank, she's relying on the accounting team that has guided her since she launched her music career at just 16 years old. Burden LLP, that's the firm And we're shocked Riri hasn't written a breakup song about them Oh wait Jack, she did write a diss track on those guys More about that in a minute Because by the end of that year, court documents show that Rihanna had lost 80 % of her cash on hand And she blamed it all on the accountants in a lawsuit She alleged that the accounting firm took a 22 % management fee Despite being, um, accountants Gross mismanagement is what she called it You see, 22%, that's over double a manager's fee And they were accountants, not managers And she alleged that her last girl on Earth tour was actually losing her money.

2:01But her accountants were still getting rich on her tour. And she pointed out that she bought a$7.5 million home in Beverly Hills that her accountants encouraged her to scoop up. But she didn't have the cash flow to cover all the costs. So by Christmas of her 21st year, Rihanna's situation was so bad, she couldn't even send wires over the holidays. And while the IRS was probably fangirling over her outside of work, the tax agency did toss an audit on her too. even though she'd been paying 22 % of her revenue to an accountant to avoid exactly that. But Rihanna did find love in this hopeless place.

2:29Yeah, she did. In the form of a lawsuit. She sued Burden and reportedly settled for$10 million. Oh, no joke. Fans believe bitch better have my money was written about that accounting firm. It was a hit album and it was an affidavit. Really? She went on to win eight more Grammys, launch a$1 billion Fenty Beauty brand, and perform for the 2023 Super Bowl halftime show. While pregnant. Yeah. And the core reason Rihanna went from basically broke to big-time billionaire, it isn't just that she broke up with that deadbeat accountant. It's also that she pivoted from splurging to saving and investing too.

3:00With a formula that you can use too. Here it comes. Now, Yetis, the most emotional Rihanna song that gets us every time, it's I Want You to Stay. But we actually remixed that song to I Want You to Save. And there's one classic savings rule, 50-30-20. Yep. If you've never heard of it, we're about to explain it. If you have heard of it, we bet you forgot to practice it. It was actually popularized back in 2005 by then-professor... Yet, Senator. ...Elizabeth Warren. And this budgeting breakdown, it tells you where to put all your after-tax income. Here it is. 50 % would go into needs, 30 % into wants, and 20 % into savings or paying down debt.

3:33So let's say you make$120 ,000 a year of after-tax income,$10 ,000 per month, to keep it simple. $5 ,000 each month goes to things you can't live without. Rent or mortgage, groceries, medical bills, transportation, electricity, water, heating, and Wi-Fi. Because if you don't pay those, then you're definitely not going to see Rihanna play live. No, you're not. But personally, Jack, I'm going to toss gym membership in there. Totally fine. Everyone has their own definition of needs, and there is a need for leg day. That's admirable. Thank you. But after all those bills are paid,$3 ,000 goes to your wants.

3:59The fun stuff. Yeah, the dinner's out, the vacays, the cute tops, the brunch with the buddies, the Netflix, and the HBO subscription. Final 20 % goes to your savings. And here's where things get interesting. Because we're not just talking about putting$2 ,000 of those paychecks each month into a literal savings account. Or paying down your student loans. Yeah, some of that should go there. Stashed away in the SOS fund, break it in case of emergency. But that savings bucket has more layers than most song lyrics do. And we need to update them because it's 2026. Sorry, Liz Warren, we're writing your second edition.

4:27Like any good DJ, we like to remix. And that 50-30-20 savings plan, it's in desperate need for an update. And here it is, 60-20-10. Yeah, we know we added one there and you'll see why in a second. First, why did we increase the 50 to 60 % for needs? Because that's the reality of our brutal inflation situation. Rent and home prices have risen relentlessly because we don't have enough homes in this country. Home prices are up 57 % since 2020 and rents are up 38%. Yeah, too bad Rihanna sold that Beverly Hills home 15 years ago. Yeah. So the reality is that the needs portion of your budget has to increase because housing costs have increased so much more than average incomes have.

5:00So the part of your paycheck for needs, it's now 60%, not 50. For your wants, it's a sad reality, but we actually recommend shrinking that from 30 % to 20%. It sucks, but higher rent comes at the expense of those Ray-Bans you've been eyeing. But hold that frustration for a second. Because we have good news. You can make your want budget get wild again by getting creative with that 20 % savings bucket. Paying down high interest debt, that should be your priority. And having cash to cover three months of your life expenses, that's key too. Put that in a high yield savings account. Right now we use Robinhood, which is getting a 3.75 % rate.

5:30The creativity we're talking about though is investing. Right. A portion of your paycheck should be playing in the markets, the greatest source of wealth generation in human history. Which leads to our second update to Rihanna's budget ratio. Split that 20 % savings with 10 % going to savings and debt repayment and 10 % going to the markets. So$1 ,000 of your$10 ,000 monthly hypothetical paycheck, that should be directly deposited into your brokerage account. Look, Wall Street returns, they aren't guaranteed, right, Jack? We graduated college just after the market crashed in 2008. Yeah, we did.

5:59But do not let those once-in-a-decade dips scare you. Because the most effective way to grow wealth in America for the last century has been to own a piece of the S &P 500, the 500 biggest stocks in America. And if you don't want to pick specific stocks, although we'll tell you how to do that in future episodes, you can simply buy the S &P 500 ETF, SPY, which is like a well-balanced smoothie of the whole stock market. We personally have huge chunks of our net worth in that S &P 500 ETF. And wow, has it grown. Yeah, it has. $1 ,000 in the S &P 500 deposited every month is$12 ,000 every year. Okay.

6:31But if it grows 10 % per year, which is the historical average growth, then after five years, assuming conservatively you haven't gotten a raise. But you will, you're fantastic. Those contributions are now worth$77 ,000. That's not savings. That's growings. And after 10 years, your$1 ,000 a month investment contribution has become 200 grand. That is a down payment on a very nice house. And that's the beauty of the 60-20-double-10. By splitting your savings in half, you're still keeping money stashed away for that rainy day, but you're also letting your money grow with the market mojo so that you can live out your dreams.

7:02So besties, when someone tells you, bitch better have my money, you may actually have more money than you realize. So Jack, what's the takeaway for all our buddies who are fans of RiRi? Saving takes planning. Yetis, how are you actually gonna pull this off? Well, it doesn't happen unless you make it happen with each paycheck. And we got a bunch of ways to remember to do that, which we'll get to in future episodes of this show. Like the episode about the budget brunch? Love the budget brunch. But in the meantime, Rihanna climbed out of near bankruptcy by breaking up with a deadbeat accountant and doing the 50-30-20 rule.

7:30Post-pandemic though, you better try our remix, the 60-20 double tens. And let us know if you've got your own numerical breakdown in the comments because one size does not fit all. No, it doesn't. If you live with your parents, that's fantastic. Your 60 % for needs can come down to 30 and you can supersize your stock market contribution and truly get rich quicker. Oh, and if you ever forget about saving money, just remember that Rihanna has literally been singing about saving money for over a decade now. Is that so, Nick? Yeah, there's a little bit of subliminal messaging in her songs, Jack. Remember Rihanna's 2012 hit, Stay, we mentioned earlier?

8:00Check out the lyrics from the chorus. Uh, funny you're the broken one, But I'm the only one who needed saving. Because when you never see the light, it's hard to know which one of us is caving. Besties, don't cave. Save. And remember that saving takes planning. Now subscribe to this show for more money secrets of celebrities that you can use every day. Because bitch better have your money. I thought you were going to say Ella, Ella, Ella. Hey, hey, hey. Okay, now Rihanna, you can stop listening.

8:35Another Nine. Yetis, we've all heard of side hustles. You find a way to make extra income on the side of your day job. But what if your side hustle was more of a side leisure? And what if it involved hitting golf balls every minute of the day? That's called a hobby. Actually, no, this is the real idea behind launching a franchise of Another Nine, the ultimate indoor golf experience. Another Nine is a network of golf simulators open 24-7. The business is built around private simulator suites that guest book by the hour. And it's powered by the same TrackMan technology used by the PGA Tour. Now, Besties, we're not talking about playing golf here.

9:10We're talking about a franchise opportunity to open up one of these things and run it. And it'd be semi-passive income. There's no staff needed on site. So there's some management required while the golfers are swinging woods, but not so much management that you need to commit to this fully. Actually, Another Nine was started by a couple of guys with young kids who just wanted to play more golf anytime they wanted. Now they've got 70 locations and want to add more. You could be number 71 by launching Another Nine Franchise near you. So head to www.franchise.anothernine.com to run one of your own.

9:38That's www.franchise.anothernine.com. Monarch. Yeah, it is. You know my first money lesson? It was where to put our lemonade stand. I was wondering, it was on the Upper East Side. Do we do it on Lexington Avenue or Park Avenue? Wait a second. New York City has lemonade stands on this sidebar? They didn't. We were pioneers, Jack. Lexington Avenue is more commercial. Park is more residential. So what did we learn, Jack? Families are willing to pay more for lemonade. So you set it up on park. Yeah, we did it on park. Besties, no one gives you financial lessons in life. You end up figuring most of it out as you grow up.

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11:59This episode is brought to you by Bill, the intelligent finance platform that helps businesses scale with proven results. Yet he's paying and getting paid. That is a pain for small and medium-sized businesses. Jack, did you send the invoice? Did they see the invoice? Did you remember to remind them to see to pay to remember to pay the invoice? If you drop the ball in any one of those steps, you don't get paid. Nope. And you're missing out on cash flow. You should not have to chase your customers. This isn't TAG. So powered by AI, Build does all that simply and automated so that you don't have to.

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