Money Rehab with Nicole Lapin - Change Maker: Hill Harper (pt 2), Actor & Founder on Tackling Student Debt and Debunking Financial Experts

Episode Date: June 11, 2021

In the second part of their conversation, Nicole talks with The Good Doctor star and The Black Wall Street founder Hill Harper about how he got into - and out of - six figures of student debt. Learn more about your ad-choices at https://www.iheartpodcastnetwork.comSee omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. As you know, every Friday we talk with a public figure making change in every sense of the word

and along the way has been in or is still in money rehab. A little more than a month ago, I spoke with actor, author, founder, all the things, Hill Harper. You may remember the conversation. Well, I repeat what my pastor used to say, because my pastor used to walk around the church parking lot, and he'd see too many of these foreign cars. And he came into church one time, and he said, listen, I need y'all to start just buying a car that you can afford. And when I say afford, I mean buy a Ford, you know, because he saw a lot of Mercedes and stuff. It was amazing. And when that episode came out, I told you that Hill and I covered so much ground that I wanted to split the episode into two parts. In the first part of our interview,

we talked about crypto, racial disparities and access to financial resources, and his new digital wallet, the Black Wall Street. It was a really wonderful conversation, and you should definitely go back and check it out now if you haven't already. But there's a whole other second part of our conversation that has never been heard until now. In today's episode, Hill and I debunk the BS advice pushed by so-called financial experts. We stress the importance of having an emergency fund. And Hill shares how he got into and out of six figures of student debt. We're going to do a deeper dive on student debt soon because even in the short amount of time that's passed since I spoke with Hill, the

conversation has shifted in Washington. But I wanted to share Hill's debt story because it really gets to the heart of why I love these Changemaker episodes. The people who are uber successful? Yeah, they have struggled with money stuff too. So if you're in student debt right now, know that you're not alone. There are millions of Americans in student debt, adding up to the national total of $1.7 trillion with a T dollars owed. But if Hill can make it and make it big, then so can you. So here it is, the second part of my interview with Hill Harper. Your brain is so expensive. How much student debt did you have? Oh, I had a hundred plus thousand. Yeah. For me personally, that was an investment in myself. And I always saw it that way. I counsel people a little differently now around student debt and how they should look and do their analysis. But for me, that was some of the best money I ever spent. So what advice would you give someone who's working their way through student debt? Okay. So if you've already gone to school and now you're working and

you're working on paying it off, you treat that debt to me just like any other pieces of debt. So there's a couple of things that you need to do. Number one, if this pandemic has taught us anything, you need to have an emergency fund. And that has to take a priority of paying into. You don't have to try to do it all at once. But I always say six months. I'd like for you to even have more, but minimum six months, if not more. And it has to be your necessities.

Needs versus wants are important. And when I say necessities, I'm talking about your bare basic necessities. So what does that mean? It means food and water. It means shelter, your house, if you're renting, your rent or your mortgage and your taxes, if you're owning. And then your utilities, which I also include my phone, because I believe that that staying in touch is an essential piece. And so your telecom bill as well. And so you add that number

up, you multiply it by six, and whatever that number is, you put that away and that's off to the side. And that doesn't go into Bitcoin. That doesn't go into Tesla. That doesn't go anywhere. It just stays off to the side in a bucket because that's your emergency fund. Not an actual bucket, like a savings account. Yeah. A savings account. Just to be clear. Not a natural bucket. Not under the mattress, not in a bucket. Yes, you save it. Put it into a savings account. You can sit it there. That can, you know, you call that your emergency fund.

So that's number one. And you pay into that over time. You don't, like I said, you don't have to do it all the time. Then you look at your highest interest debt. For most people, it's not their student loans. It's their credit cards. And you look at that, right? So, but if it's for you, it's your student loans and you start targeting highest interest first now some people have a different

theory about that some people want to create a success model where you pay off the lowest amount first so you feel like you're you're marching towards success if you need that positive reinforcement that's okay too so go after that and pay that off whatever you're doing you're setting up a regular payment into that. I recommend targeting your highest interest. And then you can start using your savings. Once you start, your interest starts going down, you can start using that money, your savings,

and start putting it into some ascending value asset classes. As far as looking forward, as far as going into student loan debt, I really think that you have to be really strategic. You don't want to run up a lot of debt these days and student loan wise. And so, you know, doing things like getting your required coursework out of the way in a junior college setting that's much low cost. That's something to think about. Yes, that can take away from that

beautiful four year experience. But going to in-state schools, that can take away from that beautiful four-year experience, but going to in-state schools, going, you know, there are thousands and thousands of grants that go unused and unapplied for that are very specific. It's about rolling up your sleeves and just doing the work and writing, acting like you're an actor where you go out for a hundred, hundred things and you write a hundred applications and you only get one acceptance, if that, right? But you only need one. But you only need one. In some cases. So yeah, I, you know, there's a way to deal with it. I just think slow and steady wins the race and being regular, right. You don't have to solve it all today. And you can just figure out a way

to put stuff in buckets and stuff. It works over time if you stick with it. That's the key. A lot of folks start something and then they stop or they never even start. And then they wish that they could have started. There's this thing called the time value of money. And the earlier you start in whatever it is, the more you give it a runway to grow. And the same with paying things off, even if it's incremental. And so so starting is the key. Hold on to your wallets, boys and girls. Money rehab will be right back now for some more money rehab. It feels like we are after the same goal and the same mission. I love the wealth cure. I love what you're doing with Black Wall Street. I love also that you're not of the Suze Orman and Dave Ramsey school because I am not either. I think it's more

realistic that way. Well, that's why I wrote the wealth cure. The cure part is to deal with the wealth gap. Right. But at the same time, it was a response because when I wrote that book, there were like two schools of thought that seemed to be completely, you know, the Suze Orman and Dave Ramsey school of you have to feel guilty to spend a cent and you should be, you know, the Susie Orman and Dave Ramsey school of you have to feel guilty to spend a cent and you should be, you know, it's just horrible. You know, if you even spend a dollar and then you had the secret and the, you know, the idea that if you just sit here there and meditate and think good thoughts, that the money's going to find its way to the chimney and flow down into your aura and all that that stuff. And listen, both are great

ways to learn, but then to actually go to your own application and say, hey, yeah, you should be positive no matter who you are. And you should know that you can win. And you should know that you will win. And you should meditate about that, pray about it, or whatever you want to do about that. And then roll up your sleeves and do the work and have a budget and be serious. But at the same time, don't cut off your life because the most valuable thing you have is time. It's not about saving every single penny, but it's also about making the money work for you. Most of us have been taught to work for money than have been taught to make money work for us. And so therefore, how can you learn all the different ways money can start working for you

so that you have more time to do you and live a happy, fulfilled, beautiful life and not be pinching pennies off, but have an open hand to receive. And that's what it is to me. And so finding that middle ground or a realistic way to live is very life-affirming. It's about happiness at the end of the day. Everything we've talked about, Nicole, is about how can we build happy lives, happy communities. If we can help communities build and grow, it's better for everybody because we start to solve really big social challenges because you can't have social justice without economic justice. How do we solve the education gap? How do we solve police brutality? How do we solve the education gap? How do we solve police brutality?

How do we solve criminalization and how we have criminal justice reform? How can we solve housing crises, digital access? A lot of this stuff roots back to foundational community finance support. And we can do this. We can do better and we can help each other more. We can expand our circle of care and we can use all of this technology that in many ways is being used to grab money from people, particularly the folks who don't know and the poorest amongst us. We can flip it and use it to make their lives better and to make everyone's lives better in aggregate. Take back those tools. Let's go. And here's a tip from Hill you can take straight to the bank. If you're looking at technical school, undergrad, postgrad, all the

grads, do your financial homework before you get to school. Look at what grants you might be eligible for to lessen the burden of tuition or knock out some of the requirements in a lower cost program. Do this work before you apply so that you don't get schooled by debt later. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikadur and Will Pearson. Huge thanks to the

OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.