From music to fashion, film, and real estate, Russell Simmons is one man who has tried his hand in various ventures that have all been lucrative. Like nearly every person in the music industry, Russell grew up in a world of drugs and violence, but he was determined to rise above it all and make some positive changes. His optimism has seen Russell Simmons’s net worth grow into an empire worth $340 million. Of course, the start was bumpy, but persistence paid off, so check out how he achieved the millions, and maybe you might be motivated to make yours too.
Learning the Ropes of Entrepreneurship
Russell was destined to be in the art profession. He was raised by a father who was passionate about poetry and a mother who loved painting. He and his brothers grew up in Queens, in a neighborhood ridden with violence. Their father did not bother shielding the children from that life, perhaps reasoning it was a great way to teach them about life’s hurdles. However, instead of learning to avoid violence, the brothers got absorbed into the street life that involved fighting and drugs.
As an adolescent, Russell joined a gang called Seven Immortals. Selling drugs became the only way he could know how to run a business, and he admitted to CNBC that being a drug dealer taught him the basics of a balance sheet. He made profits by buying for a dollar and selling for three dollars, and soon he was good at managing his returns. He still tried making an honest living by getting employed, but he remembers his first job at Orange Julius only lasted for a month before he was fired. He used to make $2.26 per hour working behind the counter, but he confessed that he could not hold down a job was because he was not properly motivated. He left the gang life after a rival group killed a fellow gang member.
Russell graduated from high school in 1975 and joined City College to study for a sociology degree. While there, he was introduced to the world of rap music by Rudy Toppin. Rudy taught Russell all about promoting music, and by 1977, he was promoting bar parties. During his senior year and having tasted the success that came with music promotion, Russell dropped out of college to become a full-time promoter. Unfortunately, it turned out to be a misinformed decision because he did not have an audience for his first show. While his father encouraged him to go back to school, his mother gave him $2,000, maybe having already seen that her son was destined to revolutionize the music industry. With the money, Russell Simmons established Rush Productions -Rush was a nickname that Rudy Toppin had given him.
Becoming a Music Mogul
According to The History Makers, Russell Simmons’s first big act was Kurtis Walker, and the two co-wrote “Christmas Rappin.” After a few more successful gigs, Russell’s brother Joey joined efforts with DJ Jason Mizell and MC Darryl McDaniels to form Run DMC. He dressed the group in black suits and told them what they should record; thus, Run DMC became the first rap act to grace MTV. His reputation preceded him, and in 1984, he was approached by Rick Rubin, a student from New York University who wanted to promote rap music. Russell and Rick collaborated to found Def Jam after coming up with $8,000 as capital.
The record label further attracted Columbia records who wanted to promote their music. At the time, Def Jam was not like any other music label; it was primarily for black people and black music. However, when they teamed up Run DMC with Aerosmith, they reached the white audience. Before long, Run DMC’s album had sold 4 million copies, which of course, was worth every while to Russell Simmons. According to Entrepreneur, Def Jam signed up Beastie Boys, an-all white rap band whose first album sold over 8 million copies.
With a record label attracting all sorts of positive attention, it was not long before Russell Simmons expanded his entrepreneurial reach to the film industry. For instance, “Krush Groove” which had a $3 million budget, grossed almost $12 million at the box office. The music mogul had also established Phat Farm in 1992, which became the go-to store for all hip-hop fans. The brand grew into a multi-millionaire business, but in 2004, he sold it to Kellwood company for $140 million.
His Def Jam Recordings music label continued to make millions for the entrepreneur. According to the Los Angeles Times, 1998 was the most profitable year for Def Jam after generating $40 million in profits from $176 million in sales. In 1994, Def Jam had sold 50% of its stake to Polygram for $33 million, which later bought 10% of the remaining stake. PolyGram would have purchased the 40% stake for $60 million, but things took a positive turn. In 1999, Seagram Co. began talks of buying the 40% remaining stake, and Russell finally sold his stake to Universal Music Group for around $100 million, making him a rich man. As if that was not enough, the savvy entrepreneur proved he can also be a great author by having three New York Times bestsellers under his belt. Usually, authors get royalties, which can vary per author; a 10% rate is standard, and it usually increases after the first 5,000 books have been sold.
His Divorce Cost Him Some Millions
While Russell Simmons’s net worth of $340 million is quite impressive, he could be worth much more had he not divorced his wife, Kimora. According to People, the music mogul agreed to pay $20,000 for each of his two children until they turned 19. At the time of divorce, they were aged 6 and 9, which meant that Russell had to set aside over $5.5 million for child support only. You should also know that he had to pay $60,000 for a vehicle, which had to be changed every three years until the girls turned 16.