SELEDA Finance Issue

Worke (that's Workay, get it?)

It's an interesting topic that these Seleda people have thrown out: "Money, Wealth Building and the Ethiopian Diaspora - what is their relationship?" Frankly, at times I have thought that the attitude of the Ethiopian diaspora to wealth building has been to be hell bent on destroying all traces of it. I really have no plans to discuss this point in detail, but shall we say that many of us focus more (I mean much more) on maintaining a certain image and less (as in much less) on building longer term personal wealth. Do you agree with this, more or less ?

It's a fine line really, how do you balance between enjoying your life today and saving for the proverbial rainy day in the future? It's common sense to a large extent. I would say, live within your means; if your living is outpacing your means then it's time to upgrade your means, don't you think? Ideally, we are all constantly upgrading our skills and learning new things anyway. Hopefully, the monetary rewards will follow, and that new Armani suit just might be doable next month (after the 401k deductions and your other bills are paid and you've put savings aside). But if events do not follow this sequence, then we have a problem. The Armani suit may be just what breaks your bank account if you're still struggling to make car payments on the same job for the same pay.

Well I wasn't planning to be anyone's financial advisor (I'm hardly qualified) so I will get to my main point. It seems to me that we Ethiopians in the diaspora have been presented with a remarkable opportunity in many ways (that is after you look beyond the agony of leaving your homeland, and the frustration of having to start from scratch - I'm trying to be optimistic here). On one hand we have more opportunity than we have ever had to learn new skills and develop a level of professional competence that can compete anywhere in the world. At the same time we are (hopefully) being rewarded monetarily at levels our parents could never dream of even with their advanced degrees. So how do we make sure we are not squandering this opportunity?

I will leave the issue of building skills aside for now since this Seleda issue is about money money money. Once you have figured out what you want to do in life and how you're going to get paid for it, do what you can to make sure that your hard earned money does some work for you and gets you even more money. Few of us are investment geniuses but simple things such as your company's 401K program and stock purchase plan, maybe a mutual fund or two, and even dabbling in some stock (say on E*Trade) can take you far. But why are money and wealth and all that important at all?

I know when I got my first job I knew nothing and cared even less about those silly stock plans. It also gave me a headache whenever anyone talked about it, so I chose to remain blissfully ignorant. Partially this was because I was uncomfortable with money and thought it was greedy to want more (this would explain why I never asked for a raise). This is no doubt due to my Ethiopian upbringing. But at some point I realized that building wealth can also mean building security, having options in life, and being able to do things you feel are important. Security is having something to fall back on if your job disappears tomorrow, the option to decide you want to chuck your dead-end job and go study something interesting, and the ability to give money to that orphanage you visited on your last trip home.

This is how I see it but I am afraid I have talked too much and should let you get a word in edgewise.

~..~

My dear Worké,

Sorry for the delayed reply. I was, as fate and fortune would have it, out there amongst the brambles of humanity, earning my own keep. So apropos given the current topic of our Medrek of discussion.

I must say I took much umbrage at your opening paragraph. I felt disparaged, you might say, being a member of that oh so image conscious Ethiopian Diaspora. (It would be interesting to see if the rest of our brethren, i.e., other Africans, behave in the same pattern of disposing of more of our income than we keep.)

I don't mean to imply that I'm part of the group out there -- y'all know who you are! -- who happily live beyond their means just so that they could ride around in their posh mekina du jour. Neither will I ever be in line applying for the Mansion Owners Association, no matter how prosperous I become - but that's all a matter of taste and preference in my case, more so than a propensity for fiscal responsibility. However, I don't exactly see myself as part of the group that maintains an investment portfolio which they check with impressive regularity and about which they advise their brokers with irreproachable authority. I dare say that I'm in the majority, not only in the Ethiopian Diaspora, but in the general world population.

I agree wholeheartedly with your statement: "It's a fine line really: how do you balance between enjoying your life today and saving for the proverbial rainy day?"

Fine line, indeed.

No one ever plans to end up in the soup kitchen line. Even less, Ethiopians would rather be swallowed whole by an X-Files style black hole rather than be caught, tin plate in hand, in that line. What I'm trying to say is that, as a population in the Diaspora, the majority of us are actually doing well. We are, for the most part, more family conscious than we are image conscious, we try to raise our children with the values that were inculcated in us, and we try to achieve for ourselves the kind of wealth we see around us. I really don't think that a huge number of us are hurtling towards the poorhouse because we are desperately trying to keep up with the Joneses.

I think that Ethiopians, for the most part, are fiscally responsible, as well as civic minded and hard-working. We pursue our education (even into our thirties and forties) and we tend to flourish in our chosen professions. Generally, I don't think that Ethiopians in the Diaspora lack the desire to acquire wealth or to keep it. What we definitely lack, however, is the knowledge on how to save our money, make it grow and, eventually, make it work for us instead of the other way around.

As a society, we don't come from a background of forebears who are fiscally savvy in the high-tech, very Western sense where people dabble in the stock market, Money Market accounts, and various kinds of investments. Our parents never had to deal with anything more complicated than a savings account...if that! So, in most cases, they didn't have that knowledge to pass on to us, their children.

Listen, I'd be the first to admit that I still go cross-eyed when confronted with the task of investing my money - and I don't think I'm alone on this. I've had friends recommend E*Trade, American Express Investment advisors, and other various and sundry avenues of plumping up my net worth, yet I faithfully put my money into a savings account where it sits collecting dust and interest safely. There are too many horror stories out there where people lose their life's savings on one investment scheme or another. I'm one of those people who would rather keep my money where I know it will be absolutely safe. Here, why don't we coin a term and call me a Fiscal Coward.

Only recently, I became a little more actively involved in how my TIAA/CREF money was being invested. But even that tends to be too much for me to contemplate on an empty stomach. So, when my statements come, I skim them like what I'm looking at makes sense and file them away dutifully with the vague intention that ONE DAY I'll have the time and (suddenly) the capacity to deal with them more intelligently. Sometimes, I even peruse course listings on learning how to handle my money better. I catch myself eyeing with confused desire a book entitled The Stock Market for Dummies.

The bottom line is, one day I'd like to be able to give a seminar on my success in the Stock Market. Okay, maybe I'd just settle for getting over my fear of success, because success means money, and money is so scary to me on so many levels that the idea of collecting my modest bi-weekly paycheck at work suddenly becomes comfortably appealing. Who wants to pore over their accountant's statements when the numbers begin to resemble a mathematical code for building a spaceship? And who wants to ever open a statement with, "Well, my accountant said....?" Not me, I can assure you of that.

But I can also assure you that one day I want to be wealthy enough not to have to work if I don't want to. So, it would be in my best interest to stop cowering behind fiscal ignorance and step into the 21st Century armed with the appropriate knowledge. But where to begin, I ask you? Do I go educate myself or do I turn over my money to some guy with a calculator and tell him to make me rich? To be honest with you, option 2 sound infinitely more appealing for a numerically challenged soul like myself, but who can you trust with your money?

You, Worké, sound far more knowledgeable about this than I do. What I found most comforting in your statement was that you, too, used to be a fiscal ignoramus like myself, but it looks like you've gotten over it. So, how'd you do it? Let me in on your secret and I might pencil you into my will....

Yanchiw,

Fasika

~..~

If I have sounded knowlegeable my dear Fasika then I have succeeded in pulling the wool over your eyes. I am better than I used to be but that hardly qualifies for knowledgeable.

Your point that few Ethiopians plan to end up on the soup line is well taken, but it seems that some of our actions may well land us close to this line! I noted what you said about the fact that what we need is more knowledge on how to save our money and make it work for us; that, my friend, was precisely my point. African-Americans contribute greatly to this economy in terms of their spending habits. However, their ownership of assets (and cars and clothes are not assets) are minimal for this very reason. It is difficult for each generation to help pull up the next generation when you have nothing to pass on to them and nothing that they can build on. It's like each generation starting from scratch - how are you ever going to go anywhere?

To be honest, my interest in this wealth-building issue is for the potential it has in terms of the bigger picture that extends beyond personal wealth. Now, imagine if Ethiopians in the US are able to build significant wealth. What role can we then play in the development of Ethiopia? Very few people are willing to invest in Africa because very few people are willing to take the risk - despite the well known fact that investments in Africa are some of the most lucrative. Now imagine, if you will, some degree of stability and sanity in Africa (it's a stretch, I know, but imagine it). Few foreign investors would still be interested because, let's face it, ain't no African company gonna be as attractive as, say, Cisco. Well, that's where we would come in, see. I believe that if we build enough wealth in this country we can have a significant impact by infusing capital into Africa in general, and Ethiopia specifically. The assumption is, of course, that there would be valid ventures to finance, but I am sure we have our share of entrepreneurial folk. We could also contribute to non-profit ventures such as schools and hospitals, you know .. stuff that most African governments don't seem to care much about. I've noticed how Indians in the US are building tremendous wealth, and they seem to do so much for India. There are schools in India that are 100% funded by Indians who work in just one company in the US. So, like, who needs the World Bank and IMF, what do those folks do any way? Well, okay, we probably won't have that kind of money but you see my point? Kind of an informal re-distribution of wealth, a modern day Robin Hood thing...okay, I'm getting carried away. Mind you, I have not yet done any such thing yet, but wouldn't it be nice?

So how do we go about getting this wonderful wealth, you say? Well, the way I got started on this stock business (and I JUST got started) is when a couple of girlfriends and I decided that we really needed to get with the program and get a piece of the Wall Street action. We prodded each other into opening an on-line brokerage (is that what it's called?) account and started talking about some of the attractive stocks, and we bravely dipped our toes in. I heavily favor technology stocks but obviously shun the petfood.com types. It would have been great to belong to (or start)an investment club with friends. But I have not yet graduated to that level. I believe there are a few Ethiopian ones out there. If we expand on these initial efforts I think we could go far.

So you see Fasika this is my take on wealth building. We Ethiopians have become the symbol for poverty and disenfranchisement in the world. I say it is high time we grab every opportunity we have to turn this around one person at a time ..... what say you ?

~..~

Worké,

So you, too, are a would-be philanthropist at heart. How gratifying to find out.

I must say that I agree with you on almost all points. Your argument about the African-American dollar power in this country (12 million strong at last count) is a favorite of mine. There is so much power out there amongst our (extended) people, but so little cohesion, that it all goes to waste. The same can most certainly be said for Africans, both on and off the continent.

I have long maintained (mostly to myself) that if we as a people could pause for a significant moment or two and look - really look - at who we are, where we came from, and what we can be, we would find ourselves in awe of all that power. We, the people of Africa, suffer in darkness (both literally and figuratively) because we are unwilling to harness the power Nature has given us. We all know what the problem is. In two simple words: corruption and mismanagement. But I strongly believe that in order for us to one day become powerful as a collective, we must first evolve as a society.

Africa as a whole, and Ethiopia as our medrek of interest, has always been big on political revolutions. All throughout our history, we have hastily abandoned our heritage and our history to pursue foreign ideology - usually to our detriment. Without getting too esoteric, I believe that for Ethiopians/Africans to evolve as a people, we must have yet another revolution, but this time, a revolution of Philosophy. We must look more consistently to and at our history and find a way to revive what we must have once been so that we may build what we one day could be.

All too often, we reach a comfort zone and are loathe to risk having to step away from the very thing we have been conditioned most of our lives to seek. Once we achieve financial independence, we are less likely to want to give back. We want even more. We keep padding our "nest egg" but still continue to strengthen our safety net. We are cautious, maybe not always by nature, but our history has certainly taught us to be. So who wants to go to Ethiopia and invest in their future? Not me. Certainly not yet. We are all tiptoeing around, muttering the refrain, "Never be Monday," while we wait...and watch those who can afford to lose their shirts dabble in what we want to do ourselves. What are we waiting for? For the other shoe to drop.

Talking about building personal wealth to a level where you can actually do significant good with your money (and that doesn't always have to translate into global, continental, or even national impact; it could be as simple as donating to an orphanage, running an HIV/AIDS clinic, or taking even one street child in Addis off the streets). I think we are closer to that than we think. However, we must not neglect the growth of the conscience of the people, either. Where poverty reigns, so does the mentality that accompanies it: a sense of powerlessness; the loss of the idea of the "the power of one"; and a loss of optimism for the future.

What I'm trying to say here (if it's not too late to shove it all into a nutshell) is that financial prosperity for our people is the easy part. Our potential is overwhelmingly apparent. Only, to get there, we must first BELIEVE - not just as individuals, but as a society - that the possibility is clearly there and that we CAN achieve it. You point out that Ethiopia has become a symbol for poverty and disenfranchisement. But not in the too distant past, we were also the symbol of independence for an entire continent and at the pinnacle of our achievement as a nation.

Yes, we may now be at the bottom of the power/wealth ladder, but here is a bit of good news: there is nowhere to go but up from there.

Well, Worké, I hope that I didn't get too preachy on you. Hard to get me off that soapbox once I've clambered on.

Let me close off our little virtual tête-a-tête with a little toast: May the sun never set on our dreams!

Fasika