Rocker hides in plain sight getting money-smart

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One day not long ago some ambitious business student sat in an accounting class at Seattle University next to a lanky, short-haired guy named Michael and likely had no idea that his classmate was a true legend of rock ‘n’ roll.

That’s because when Duff McKagan, the bass player for Guns N’ Roses, decided to return to school after he finally got sick of Axl Rose’s shenanigans, he didn’t publicize it. He cut his hair, went by his real name, and kept it low key, concentrating on getting his degree instead of living off his fame.

Of course, Duff had already lived the rock ‘n’ roll dream many times over. Guns N’ Roses came into the ’90s as the most popular rock band in the world. Their debut, “Appetite for Destruction,” eventually sold more than 20 million copies worldwide. In 1991, when they took the extraordinary step of releasing two separate studio albums on the same day, “Use Your Illusion I” and “Use Your Illusion 2”, they soared to the top two spots on the Billboard charts. In the midst of this success came excess: drugs, women, controversy, public urination, cursing on live television, and all of the accouterments and abuses that came with his rock-star status. The band members wrestled with various drug addictions, and the band self-destructed soon after. McKagan’s drug abuse was so severe that his pancreas exploded, causing third-degree burns inside his intestines and stomach.

But today McKagan is clean, healthy, financially astute and once again sitting atop the rock pile. His new band, Velvet Revolver, features two of his Guns N’ Roses band mates — guitarist Slash and drummer Matt Sorum — as well as guitarist Dave Kushner and ex-Stone Temple Pilots vocalist Scott Weiland. The band’s debut release, “Contraband,” premiered at No. 1 on the Billboard charts.

Bankrate spoke to McKagan about his detour into academia, and how it has influenced his handling of his rock-star finances.

Bankrate: What propelled you to go back to college for a finance degree?

Duff McKagan: Finance is very interesting. It’s almost like history — well, it is history, looking at the cyclical things, looking at presidents and what happened the year they were re-elected. If you would have kept your money in 1929, during the crash, you would have tripled it in the following three years if you kept your stock. The same thing with Black Friday in 1987.

Bankrate: Have you always been into finance, or did this come out of the blue?

Duff McKagan: What happened was, after I left Guns, I got sober, and I had all this time on my hands. I started kick-boxing and riding mountain bikes. Nothing was really going on with the band, so I started going through all our financial statements, files and files and files of them. And they didn’t make sense. I couldn’t find a bottom line. So I took a general business class where they taught you how to read financial statements, and I found out that the statements really didn’t make sense. We didn’t get ripped off, they were just misleading. Then I took a securities class, and the professor said, you know, you’re really good at this, you should pursue this. So I bought a house in Seattle and got into Seattle University, which was pretty good for someone who didn’t graduate high school. I went for almost four years. I was a quarter away from getting my bachelor’s degree, but then this band started. But I learned a lot. I have an accounting minor, and I learned the meat and potatoes of what you’ve got to know to get around in this business, and a lot more about my personal finances. I’m real happy with the knowledge I gained for my own sake.

Bankrate: Did the other people in your classes know who you were?

Duff McKagan: Well, I cut off all my hair and I really wanted to be anonymous. I went in as Michael McKagan. People started finding out, but it’s such a tough school. Kids are coming from pretty highbrow high schools and they’re really smart, and the school’s pretty tough, so you’re on the edge of your seat every class. Sometimes kids would bring Guns N’ Roses records for me to sign, but they were pretty respectful, which was cool.

Bankrate: Do you have a larger hand in managing both your own money and the band’s money than you used to?

Duff McKagan: My own money I definitely do. The band’s money, we have a good business manager, although I had to show our production manager how to use Excel. But everything’s always a band decision. People might ask me questions, but, I’m not going to … there’s a fine line. People know I have the knowledge, but I’m not going to try to dictate, this is good, this is not good. It’s mainly tax issues. You go from state to state, there are different tax structures, and then you go overseas, and there are different tax structures over there. That’s the main thing you have to deal with. Make sure people get paid, not overpaid or underpaid, that type of thing.

Bankrate: Now that you’ve been through this education, what is the biggest difference in the way you handle your own money?

Duff McKagan: I always handled it pretty well, even when I didn’t know what the hell I was doing. I got a guy at Dean Witter back in ’95. I interviewed all these guys from different companies, and they were talking a lingo I didn’t understand whatsoever. I knew one guy was full of b——- when he said, ‘We’re a firm that’s sensitive to the artist.’ I’m like, money and artists have nothing to do with each other. He just tried to cozy up with me. Just because I didn’t know about securities and stocks and bonds and real estate didn’t mean I was stupid. So I went with a guy that one of my older brothers knew, and I’ve done well with that. Made a couple of good investments with a strip mall in Orange County and a medical center, and personal properties all over the place. It’s all about real estate.