Fueling Financial Literacy

UPDATED: May 24, 2023
PUBLISHED: April 29, 2011

Bling and Bentleys don’t bring true happiness, Russell Simmons says. Not that the hip-hop mogul ever was in it totally for the money—at least not that kind of money, he says.

But somewhere along the way to becoming one of the richest men in rap, with a net worth estimated between $325 million and $500 million, he says it became more important to give back. With a business empire spanning music, television, theater, film and fashion, Simmons is driven by a belief that hip-hop is a powerful change agent—and that belief extends to his work for social and philanthropic causes, too.

Simmons chairs four nonprofit foundations and is active in several others. His pet causes include promoting education, financial literacy and voting among young people, as well as providing access to the arts for disadvantaged youth.

Through the Hip-Hop Summit Action Network co-founded in 2001 with civil rights activist Benjamin Chavis, Simmons formed a coalition of hip-hop industry leaders and artists aimed at mobilizing the genre’s resources to fight poverty and provide educational opportunities to at-risk kids. One initiative is the “Get Your Money Right” Financial Empowerment National Tour. At events around the country since 2005, hip-hop artists share the stage with financial experts. Interactive panel discussions focus on topics including banking basics, repairing and understanding credit scores, asset and wealth management, vehicle financing and home-ownership.

“Hip-hop is about creating and maximizing opportunity,” Simmons says. “It is about transforming the American dream into a living reality. Our ‘Get Your Money Right’ Hip-Hop Summits are about helping young people empower themselves with the basic tools of financial empowerment. With the proper education and information about financial literacy, a young person today can work hard and still be successful, even during the current economic environment.”

Simmons says “Get Your Money Right” is not just a clever name but also is an attainable goal. “We have high aspirations, but we know how to fulfill the aspirations of the hip-hop generation,” he says. “We have to take the subjects of financial literacy and empowerment seriously and talk with youth in a manner appealing to them.”

The message seems to resonate with starstruck fans attending the events—especially when hip-hop artists talk about their own mistakes with money and overspending.

Or when they talk about their financial strategies. At a summit in Toronto, MC Lyte suggested that audience members stop focusing on deprivation and start focusing on prosperity. If you want to own a condo but can’t afford one, she said, go to the open house anyway. Walk around and visualize yourself living there, then focus on making the goal become a reality.

Although the financial literacy events have garnered the spotlight in recent years, Simmons’ other charities include the Rush Philanthropic Arts Foundation, founded in 1995 with his brothers. The organization provides disadvantaged urban youth with access to the arts, as well as gallery space and exhibition opportunities to underrepresented artists. He also chairs the Foundation for Ethnic Understanding, a group founded by Rabbi Marc Schneier to promote dialogue between ethnic communities.

“I’ve found that the resources I get are no good unless I give them back,” Simmons says. “That cycle of giving is the process that sustains you, makes you happy and makes you whole.”

Hip-Hop in the Mainstream

To hear Simmons tell it, his hip-hop empire started as a way to share what he loves with people he thought would dig it. For the past two decades, he says material gain has seldom been uppermost in his mind.

“For me, having fun is a major part of success,” he says. At the helm of Rush Communications, the conglomerate that included (among other ventures) the record label Def Jam Recordings and the urban clothier Phat Farm, Simmons’ influence on society has been significant. Def Jam brought hip-hop into the mainstream with artists like Run-DMC, Public Enemy and LL Cool J, and pop culture hasn’t been the same since. More than anyone else, Simmons is responsible for selling the rap aesthetic to a broad cross section of America’s (and, increasingly, the world’s) youth—and for seeing that its business potential ranged far beyond the music industry.

Simmons’ first entrepreneurial venture was a 1977 house party in Queens featuring rapper Eddie Cheeba. He says he dreamed it up largely as a way of turning his friends and neighbors on to the music he loved. “Wait ’til they see this, wait ’til they try this, wait ’til they hear this—that was always the attitude and the idea,” Simmons says.

Even the song universally credited with launching rap into the mainstream consciousness, Run-DMC’s cover of the Aerosmith hit Walk This Way, “was just something we loved doing.” But the song became a crossover hit, and Run- DMC became the first rap act to hit the top five in the Billboard Hot 100. And although he downplays his initial vision about hiphop’s commercial potential, he realized it soon enough, brokering a landmark sponsorship deal between Adidas and Run-DMC that more or less invented rap’s symbiosis with sneakers. In 1999, he sold Def Jam to Universal Music Group for $100 million.

Expanding the Empire

Next, Simmons trained his restless gaze on fashion, founding the clothing labels Phat Farm and Run Athletics. With now ex-wife Kimora Lee Simmons on board as creative director, Phat Farm spun off the women’s line Baby Phat (the erstwhile couple’s two young daughters, Ming Lee and Aoki Lee, have modeled for the kids’ collection). In 2004, Simmons sold Phat Farm to the Kellwood Company for $140 million. Along the way, he’s also produced film and television projects like HBO’s Def Comedy Jam and Def Poetry and, most recently, the MTV reality show Run’s House, a window into the family life of his little brother, Joseph “Reverend Run” Simmons of Run-DMC. Simmons even has his own credit card, the Rushcard, a prepaid Visa targeted at people without access to traditional financial services.

At 50 and cashed out of his two biggest companies, Simmons is not done yet. Now, with the original rap generation all grown up, he has his eye on what he terms the “urban graduate”: a sophisticated, hip-hop-inflected consumer who grew up listening to rap and has cultivated an interest in life’s finer things—which Simmons’ new companies, the Simmons Jewelry Company and the clothier Russell Simmons Argyle Culture, will gladly sell them. “[I have] what a lot of creative entrepreneurs have: an interest in filling a void,” he says. “The urban graduate is a space that has no investors—it’s a huge void.” And oh, yes—he’s not through with music yet: In 2005, he launched a new record label, Russell Simmons Music Group.

Simmons has shown remarkable vision, ambition and stamina over the years, shepherding innovative projects to fruition against the long odds of corporate indifference and racial marginalization. It’s hard to believe now, with hip-hop as the standard soundtrack to white suburban adolescence, but it took some serious operating to get early rap groups represented on mainstream media outlets like MTV. Simmons has been known to say “with [his] first act in 1979, people said rap was dead.” It was up to him to prove them wrong, and without watering down the art form or its message, he lobbied hard to get mass exposure for his acts. His big dreams have been richly rewarded. “They say the imagination is God,” he says. “Anything you can imagine, you can achieve through hard work, dedication and focus.”

Dreaming Big

That kind of passion and conviction have driven all of Simmons’ myriad entrepreneurial endeavors, and it sometimes took all he had to convince cautious corporate backers to climb on board. “Def Poetry, Def Comedy—that was not something that [network executives] liked,” he says. “That was a favor to let me shoot those [first] couple of shows. Run’s House, I called the president of programming at MTV like 10 times a day [to get it on the air]. They said, ‘We just know that Russell keeps calling; he’s crazy.’ Now, it’s the No. 1 show on the network.”

But he doesn’t bemoan such challenges. “What we refer to as obstacles are the things that make you better,” Simmons says. “And you don’t ever really arrive, so there’s always as many obstacles as you perceive there to be.” He stresses, too, that passion is best paired with patience. “You only fail when you quit,” he says. “It takes years for new things to come to fruition. It took four years’ struggle in the fashion business for me to pull my head up, and my Internet company is just beginning to generate traffic. All the businesses take a long time.”

While his most recent business ventures may aim for more grown-up appeal, Simmons says that youth culture remains a major inspiration. “Young people have a freedom and an ability to dream,” he says. “As we get older, we lose that—I’m fighting that.” Another longstanding inspiration is the authenticity and honesty of hip-hop itself, which he sees as a unifying, not a dividing, force.

Life’s Purpose

A serious student of yoga and its underlying philosophies, Simmons identifies spirituality as another source of inspiration and strength in all aspects of his life. “The purpose of life is the attainment of yoga,” he says. “For a Christian that means Christ consciousness, for a Buddhist it’s nirvana. Every religion has that purpose: to put you in union with God, to promote happiness, a blissful existence. All of our efforts should be directed toward that.”

Asked if his philanthropy is in part a response to hip-hop’s image problems, he waxes philosophical. “We learn, over a period of time, that existing outside the law doesn’t bring us closer [to happiness],” he says. “You may get a short-term good response, but the long term is fruitless. So I don’t know why I would think that yogis are any different with their struggle than the rappers.” Simmons views rap as a step forward in social consciousness, rather than the symptom of societal breakdown its detractors claim. “Rappers are less sexist, racist and homophobic than their parents,” he says. “They’re young and idealistic, and they see the contradictions in adult behavior and in the mainstream. Just because we can block it out and speak proper English doesn’t mean we’re somehow more human.” Plus, Simmons claims that rappers put their money where their mouths are. “Name a rapper, and I’ll tell you the name of his charity,” he says. “I watched 50 Cent give away $400 grand through his G-Unity Foundation. I’ve watched Eminem show up at four Hip Hop Summits and give away coats in the winter to the ghetto.”

And how would he, Russell Simmons, like to be remembered? At first, he demurs, saying he doesn’t much care. Then he reconsiders. “I hope my children know that I tried to become a good servant,” he says. “I hope they remember that Daddy was a yogi.”