Saturday, November 17, 2018

Price Tag

If you need something now, it doesn't matter if you know a place where you can get it cheap. It matters where you can get it now. It matters if you can get it. As a Soutie (someone with one foot in England and one foot in South Africa), one of the harder things to wrap my head and heart around is Relative Poverty. In terms of Global Poverty Criteria, virtually no one in the UK lives on less than £4 a day. That is about R72 a day. 80% of South Africans live on less than R3800 a month. That is roughly R125 a day. Those numbers aren't that helpful, because they only talk about the ins. They don't talk about the outs. About 20% of the people in the UK live in poverty with measures looking at ability to eat, heat a home, and have a roof over your head. At the quality of schooling. At the life opportunities.

Money is smoke and mirrors. You can earn a lot more in London than you can anywhere in South Africa. If you want to feel poor though... go to London. Even if you think you are reasonably well off. In Langa, an area of Cape Town where 72% of families of three live on less than R3,200, there is still an awesome buzz. There is a cricket field and hockey pitch that has generated National Sports stars. Not to downplay the poverty challenges. The resilience and energy in these places despite permanent Great Depression Level unemployment is in equal parts heart-wrenching and inspiring.

Communities have price tags. Friendships have price tags. It is why as things stretch, it becomes harder and harder to make friends across income lines. It is genuinely not unusual to spend £50 a head in the UK on a dinner with friends. To maintain friendships, it can be hard/impossible to be 'one of the crowd' if you don't. That is R900. For one meal. One meal. One. Except it isn't. I couldn't buy a meal for Rands in the UK. 

The problem is... I could send that money to South Africa. In a Global world where Capital, Goods, and Services can flow freely... it is the flow of people that is more tricky. People are ultra-local. We aren't ones and zeros that can be swapped between places in a line of banking code.

This is more an observation than an answer. I find it difficult living on two sides of a salty pond. Yet on both sides of the pond, that same inequality is on display. South Africa's is more in your face. As a country gets richer, they get more adept at hiding their difficulties. The difficulties don't disappear. Get "richer" doesn't matter much if part of the reward is an increased price tag. That is the problem with goals being based on numbers.

We need to get better at looking through the noise. At the dance between what comes in, and what goes out. 

Strand/Somerset-West and Nomzamo/Lwandle
Photo: Johnny Miller

Friday, November 16, 2018

Investment Culture

As part of the 'trial and error' process of building a Community Wealth Fund, I am starting an Investment Stokvel with a few friends here in the UK, and a bigger group in South Africa. The idea of 'team saving' is not uniquely South African. A friend pointed out that 'village savings societies are particularly common particularly common in Bangladesh, Central America and East Africa. Apps now exist for stokvels in Kenya, transfers via Mpesa and the data collected can be used by banks for credit assessment thus allowing small businesses to formalise.'

The advantage of team-effort is the secret relationship sauce that holds it all together. Investing can become part of our culture. When building becomes something that is as normal as a five-day-work-week. As normal as four weeks of leave a year. Church on Sunday. Rugby on Saturday. Breakfast, Lunch, and Supper. Passports and Borders. Monthly paychecks, mortgages and year-end parties. There are various things we do because that is what the people around us do. Gradually over time, patterns become accepted and repeated. Some benefit us. Some need tweaking. Some need starting.

I am a big believe that what you do on any given day isn't that important. What is important is what you do every day. Habits. Patterns. Loops. Defaults. It is in the repetition that actions soak in deep. In the repetition that things of value are built. One brick at a time.

I want it to become a thing for people to separate their identity from their jobs. To separate their ability to survive from their inherited usefulness to society. I believe part of that is in building together. In creating the daily habits, that with time, will create strong foundations, weather-proof walls and a creative space for us to thrive.

Wednesday, November 14, 2018


I grew up in a very religious community at the tail end of the Cold War and Apartheid. Ideologies end up having strange bedfellows, and we tend to believe the particular cocktail we were born into. Aged 13, I can still remember an argument in my Maths class when I suggested to someone that Jesus was probably a Communist. I was a Church-three-times-a-week boy, so this was a pro-Communist sentiment, and it didn't go down very well. I didn't know about Mao and Stalin, but I did know about a loaf of bread and a fish that fed a lot of poor people. I probably should have been doing my Maths, but my nickname isn't Donkey because I am quiet.

The Apartheid Government was one of the regimes being supported by the UK and America in order to hold the wall against Communism. Mandela was released in 1990, the Berlin Wall fell in 1991, and South Africa held its Apartheid ending elections in 1994. Many members of the African National Congress still call each other Comrade.

Like someone who grew up watching 'The Wizard of Oz', then went to watch 'Wicked', I ended up studying Money because I hated the control it had over me. One of my first courses at University was 'Thinking about Business' (TAB). A couple of friends and I used to call it 'Free Market Indocrination' (FMI) and came wearing red shirts. Twenty years later, we still greet each other with a variation of our nicknames with the addition of a Russianised '... anofski'. Donkanofski, Tapiwanalotaflopski, and Robanobadropski were the Comrades-in-Chief.

As someone who could be described as a Capitalist Activist... I am clearly a convert. But I am probably more accurately described as an Anti-Capitalist's Capitalist. I still believe that money doesn't mix well with certain ideas. My blood still boils enough at Corporate culture, that I far prefer living off a Basic Income (Generated by Capital) to working for money.

In particular, I have big concerns about money mixing with Housing, Health, Law, and Medicine. I still believe there are good ideas, and good business ideas. They overlap significantly, but there are some good ideas that get perverted by money, and there are some great ideas that are impossible (/not a good idea) to monetize. I call myself a Neoliberal, but that is now as much of a swear word as me calling Jesus a Communist in Durban in 1993 South Africa. "The Establishment" is the Wicked Witch, and the torches are out to burn things down. I believe some things are better run privately, and some things are better run by Institutions that are democratically controlled. We are gradually learning which is which as different places try different things. Through trial and error, and global best practice.

Nothing is as simple as any ideology claims. The world is messy. The Wicked Witch of the West has a completely different version of the truth. A truth that works for everyone is hard to come to, if we aren't able to pause and look at things from other perspectives.

Time Advantage

The biggest competitive advantage is time. Time to be patient. Time to invest. Time to pick the right moment. A lot of people hope to suddenly come across a life-changing idea. A get-rich-quick scheme. A sentence, or thought, that sparks a complete revolution in their interaction with the world. I don't think that is how it works. Real advantages often live in the open, hidden only by our willingness to dedicate ourselves to the time we need to commit.

There is a difference between being able to Google the answer, and knowing the answer. It is the same difference between someone who has grown up speaking a language, and someone being handed a Smartphone with Google Translate, and a Dictionary. Having the answers, and knowing the answers are two different things.

We are shifting away from industries that need people to smash things, pick things up, and carry things to and fro. Towards industries that need people to be able to see.

In my first job, I often had to write papers or proposals on how to deal with a problem. They could be 10 or 15 pages long, and hidden in there were one or two things I felt very uncomfortable about. My first 'big boss' seemed to have a secret ability to skim through the document, and land his finger on those two points before I had finished my self-congratulatory cup of handed-it-in coffee. It seemed like black magic. His advantage? Time. Gradually, the deeper you go, the clearer things become. The work I was doing wasn't rocket science, but it did require application. Just do the work.

I believe lots of things are like that. Learning a language, learning an instrument, running a marathon. The reason we don't do these things is we don't feel sufficiently competent quick enough. We expect to be able to go for a 5km run after sitting at a desk for 20 years without it hurting. Hint - it wasn't the run that was the problem. We expect to pick up a guitar and play like Brian May. Hint - Brian May didn't start playing like Brian May. We expect to learn languages like mother tongue speakers without the decade, or two, or three, of deep soaking little Monsters go through.

Some answers aren't easy. Even if they are obvious. The answers that require time.

Tuesday, November 13, 2018

Boggles my Mind

We are all at the centre of our own Universes. What we see and understand is determined by what we have seen and understood. A Controlled Hallucination which plugs in new information to all the things we have processed before. In Mindwise by Nicholas Epley, he talks about reasons why it can boggle our minds when people don't understand things the same way we do.

The Neck Problem is that people are simply paying attention to different things to us. Our attention is limited, and other people don't dwell on the same things we do. The most important thing to us, isn't necessarily the most important thing to them. There are too many important issues in the world for us to focus on. We choose. We choose differently.

The Lense Problem is that we don't see things in the same way. The Curse of Knowledge is that the deeper you understand something, the more it restricts you from seeing something else. Once you can read, you can't help but 'hear' words in your head if you see them. They then frame everything else. If you can't read a certain alphabet or language, you just see squiggles... and you will see differently. The same with languages. The same with all the context, and shared context, required to understand. Nothing exists in isolation.

My mind and heart are regularly boggled. I think all of us have to struggle with miscommunication, misunderstanding and generally missing each other. That is why I increasingly believe that debate is overrated. When someone disagrees, we should be fascinated. We should explore that alternative way of thinking. In exploring with them, both of our ways of seeing will be changed.

That is what connection does. It changes us by changing how we experience the world. Together.

Monday, November 12, 2018

Half and Half

Some questions are too hard to answer. Not answering is also not good enough. But we have to do something, because not doing something, is doing something. One of those hard questions is what to do about Poverty. Poverty is predominantly inherited. Privilege is also predominantly inherited. Where you are born, who your community is, the people you are likely to meet, and the natural skills and abilities you have.

Another hard question is to fix a challenge now, or fix it permanently later. 

The vast majority of us live hand-to-mouth. Even the wealthy. We don't have a savings culture. Safely less than 10% of us manage to retire one day having built financial security that allows us to maintain the lifestyle we had while working. Most people consume whatever they make, rather than building. Normally, because they need to. Normally, because creating a gap between the hand and the mouth is hard.

Survival is a Financing problem. Finance is basically 'how do we get the money to solve this problem?'. The problem of survival, up to this point, has been solved by 'pay people to do work'. This ties our survival to our ability to make money.

Another solution would be Capital. Capital can earn money. What I call an Engine. The wheels of a car have a job to do, but not one that creates Energy. They rely on the Engine. I believe the same is true of the challenges that face us. Money is Energy. Without it, we can't do much. But not everything worth doing is about Energy... that Energy needs to be transformed into something worthwhile. That Energy needs to take us somewhere. That is where the wheels come in. Financial Security powers wheels.

'Half and Half' is a possible do something to these hard questions. A Universal Basic Income could be financed on a build your own, and build another basis. Those who are privileged enough to have some financial security, say those consuming more than $32/day (the richest billion people on the planet), could build themselves and another person a UBI. If they put $8/day aside. Half could build a UBI Engine. Half could pay a UBI now. Half and Half. $4 could be invested to build a Community Wealth Fund. $4 could pay themselves and another person a UBI of $2/day. The poorest Billion people on the planet live on less than $2 a day.

It is possible, over a period of 15 years, to build a Community Wealth Fund that could permanently fund a UBI of $2 a day.  If we shift from a Consumer to a Custodian mindset. If you create a fund that puts the Capital to work. If the owners of the Fund consume less, on average, than the fund makes.

These are hard questions. Half and Half seems like a good answer to try.

Half for now, Half for later
Fund your own, Fund another
Build your own, Build another

Friday, November 09, 2018

UBI Stokvel

I am a Soutie. That is a South African term for a person with one foot in England, and one foot in South Africa. Stokvel is a very Soutie word. It originates from the "Stock Fairs" of the English Settlers in the Eastern Cape of South Africa. After the Napoleonic Wars, the UK was suffering serious unemployment problems - sending a bunch of people off to South Africa seemed a good solution.

The English Settlers had rotating cattle auctions. The word may be Afrikaans, and the source of the word English, but the bull was taken by the horns by communities. Today there are over 800,000 Stokvels in South Africa according to the NASASA which aims to represent their combined needs.

A group of people come together, and create a community. This community forms a Constitution, which agrees on how money will be collected, what will be done with it, and how it will be dispersed. The foundation of Stokvels is trust amongst the members.  The biggest focuses are normally Savings (for something the members agree on), Burial Societies, Groceries, or Birthdays, but there are also Investment Stokvels... where the money gets put to work.

I would like to be part of building a Universal Basic Income Stokvel. The idea being that 150 of us get together with a "one for me, one for someone else" mentality. So 75 "Breadwinners" aim to build an Engine for a UBI for themselves, and one for someone else. We come together, and form a Constitution, and support each other in building a Community Wealth Fund which one day can pay 150 Universal Basic Incomes.

If 75 people contribute $8 a day, half could be "pay as you go" and half "invest for the future". So $4 would pay for two UBIs now, and $4 would build towards an Engine that can sustainably pay two UBIs later. That means 150 UBIs could be paid "hand to mouth" now, and 150 UBIs could be paid from a fully funded Community Wealth Fund (UBI Stokvel) later. I think with sound investing, that later could be about 15 years.

Wednesday, November 07, 2018

Cost of Living

"Purchase Power Parity" (PPP) is a tool used when comparing the output of two countries. If you just compare the Price, it doesn't compare apples with apples. Since apples don't cost the same in both countries. 

I first dipped my toe into life as a Soutie when I was 18 years old. I had two older brothers at university, and no idea what to study. I hated the idea of having to choose one thing. At school, you could do everything. Apparently being an Adult meant forgetting how to play. I wasn't ready. The bonus of a 'Gap Year' (or two) from the School-University-Work-Retirement-Death machine was that it wouldn't have fees. At that stage, you could get a two year 'working holiday visa' to go the UK. That sounded fun. I earned the plane ticket fee by working at Centre Court Restaurant at the Pavillion in Westville. I then hopped on that plane and went to work at a school in the South of England.

During the 9 week Summer holiday, I took on an extra job at a local hotel as a waiter, and a Night Porter. Scurrying away my pounds like a Hamster, I tried to live as cheaply as possible. The school I was working as an Assistant Teacher (Gap Student) gave me board and lodging. I tried to spend almost nothing.

I particularly remember the first round of drinks I had to buy. In South Africa, I was used to buying drinks for people. But normally on a one to one basis. In the UK, it seemed drinking was more of a Rugby match than a Tennis match. A Team Sport. One round cost me the same as the most I had ever spent on booze.

When I got back to South Africa, my Pounds were magically converted into Rands. I felt like a Millionaire. The opposite of the punch to the stomach when you reached the bar, it felt like I was being given the beer. "Thinking in Pounds" gave me a spring in my step. The Barmy Army felt the same, and made up a song called "We're so rich it's unbelievable".

Barmy Banter - a Donkey taunting the Army

"The Law of One Price" is the idea that without friction, and with free competition, the same thing should cost the same everywhere. The "Law" doesn't work. In reality, prices are local, and the cost of living differs in different communities. Money is a story, and stories are local. Even within a country, the cost of living differs in different places. Every community has a different "Entry Ticket".

Financial Security depends at least as much on the outs as the ins. It depends more on the outs than the ins. Someone who gets control of their outs, and can get that sustainably below their ins, is in a much better position than someone with big ins but outsized outs.

Often ins and outs end up matching. Working is expensive. We have to pay to live close to work, perhaps put kids in school close to work, and we end up having to 'buy our round'. Buying your round may not be how you want to spend your money, but you end up being forced to because that is what everyone around you is doing, and where the people you want to be around are.

It is hard to get control of your ins and outs by yourself. 
Financial Security is also a team sport.