Dr Dre has to pay his ex-wife $100 million dollars - That's a lot of money

by Dr Boyce Watkins

I wanted to share a few quick thoughts about the divorce of rapper Dr Dre from his wife Nicole.  A court recently ordered Dre to pay his ex $100 million in the divorce settlement, which might seem like a relatively small sum, given that Dr Dre's net worth is estimated to be above $800 million dollars. 

I hope that's true.  Maybe $100 million is a walk in the park.  None of us can see inside Dr Dre's bank account. 

But here's another perspective.  

Some might think that $100 million dollars isn't very much money to Dr Dre, but I would be very surprised if that were the case. What most people don't realize is that your net worth is typically much higher than your amount of available, liquid cash.

For example, a person who has $100k in home equity, $80k in stocks and a business generating $100k in profit per year might be TECHNICALLY worth $1.2 million dollars or more. But if someone forced them to come up with, say, $120,000, it could wipe them out, especially if they don't have access to a bank that would be willing to loan them money against the value of their business' projected future income.

When I see the case of Dr Dre and Nicole Young, I think of these things:

1) Be thoughtful about who you marry. It's easier to marry someone with money, since this may keep them from coming after yours.  

2) Prenups matter.  It creates clarity in the relationship.  But given that Dre married Nicole when they were relatively young, this likely wasn't on his mind.  Some people think prenups are unromantic, but I would argue that they are an efficient way to split amicably with minimal complications or legal fees. 

3) Relationship therapy should be seen as a business investment - a costly divorce and thousands of hours of arguing can cause you to miss out on a ton of economic opportunities. So, the person who could be your greatest asset has become your greatest liability. That means you're losing both ways.

There are thousands of relationship experts out there who can help you.  If you choose to get married, invest in therapy early, before problems emerge.  This move could make all the difference in your long-term economic future. 

Dr Boyce Watkins is a Finance PhD and founder of The Black Business School.  You can learn more about Dr Watkins by visiting BoyceWatkins.com.