Henry Kaestner: Welcome back to a special edition of the Faith Driven Investor podcast today we’ve got a special guest great friend of mine, Peter Career with us from Hope International and Peter. As so many of you will know, Rise, an incredible organization called Hope International, which focuses on Christ centered economic development, savings plans, savings groups, rather microfinance smear loans and assistance. And he does that and just pretty much all over the world and many, many countries that we’ll hear about. But one of those countries is particularly special to him and to the staff of Hope International, and that is the Ukraine. It’s in fact where Hope got started just about 25 years ago. He has 47 employees that are on the ground. He’s been coordinating a work with them to make sure they and their families are set, and he is in a great spot to give us a sense as to what’s going on in the ground. Hopefully not to put too much pressure on my great friend, but hopefully will give us a good flyover and help us to understand a bit more about what’s going on. There may maybe some of the history and some of the ethnicity and in some of what’s happened over the course of the last week in a way that you will be able to understand the conflict and understand what’s going on through the lives of those he knows on the ground in a way that would be different than to CNN or BBC. But hopefully you will leave our time together with a sense of what God is doing in the world, how he might call you into it. And at the very least, a way to pray differently about Ukraine in this crisis. Peter, welcome to the show.

Speaker 2: Thank you, Henry. So good to be with you.

Henry Kaestner: Awesome, have you? So we’re going to put this in the show notes, but I listen to a video presentation that you gave and event for the Denver Institute of Faith and Work last Tuesday or Wednesday, shortly after the conflict started. You know, it’s beautiful. It, it’s just awesome. And so I’m really grateful for you to be able to share some of that, some of the lessons of hope amidst a very tragic backdrop. But before we get into some of the things that you shared with that audience, give us, give us a sit rep. Tell us what’s going on today, please.

Peter Greer: Yeah, thanks, Henry. And I mean, the situation continues to rapidly change and we are continuing to pray for peace that this invasion would be over. But every day we’re in contact with the staff in Ukraine. As you said, Henry, 47, staff around the country, not all of them have been able to get to the West. Some are still very much in conflict zones, very close to the fighting. And I mean, you when you love someone, when they go through pain, you feel just a little bit of it to you. And I think that’s really just for the entire organization right now, all of the other countries feeling just a little bit of that, of that pain that our friends are experiencing right now. So in terms of what’s happening, there continues to be a mass exodus of individuals who are able to get out of Ukraine, estimated the right now 1.5 million people have evacuated. We know that males ages 18 to 60 are not able to exit, so there’s still a lot that are in country, but a lot of movement. I am thankful that the global business community is continuing to put pressure on Russia and Henry to think about the impact of business and this story that continues to unfold about a growing number of companies that are saying this is not OK and trying to figure out ways to make sure that the nation of Russia understands a little bit so really encouraged actually by what MasterCard, Visa, American Express are doing. Apple and a number of different companies that are saying we are going to suspend work in Russia as a way of trying to increase pressure on Vladimir Putin for this invasion to end. And in the midst of all of it, just an incredible show of solidarity and support among Ukrainians. The spirit of unity in Ukraine is so strong, and I have just the highest respect for our brothers and sisters right there that are facing incredible challenge and yet doing it with a spirit of unity that you have the world is seeing. So they’re continuing to pray for the peace talks, continuing to pray for peace and for all of us trying to figure out what does it look like to pray and to act in ways that very quickly, as soon as possible, this conflict will be over.

Henry Kaestner: Touch us a bit about the unity that you just mentioned. There are hope and there’s there’s a map. Hopefully we’ll have in the show notes to that shows where hope employees are and where there is conflict and their hope employees on the traditional Russian speaking side on the Far East and the Ukraine, and then also in the Ukrainian speaking side. Talk to us about this unity. One of the things that lots of us have been a little bit of a crash course on over the last two or three weeks is this kind of history of Ukraine, some different groups. And yet it’s not like all the Russian speakers are just like, can’t wait to be joined with the motherland, right? It seems quite the opposite.

Peter Greer: I think so. Within any country and. Any time we even have a conversation like this, it is real difficult to get to the overall, what is true in one region might be a little bit different for another region. And there certainly is nuance in the Donbass region. There certainly is history, right? But I think for me, the peace that has been a lesson for the world is what Zelensky has done and leading in a way of really coming back to that identity, coming back to who we are as a free nation, as Ukraine and watching the way that this truly has brought the nation together. And not just that, but I even think about my colleagues here at Hope International. The number of us you can’t see on video, but there’s a lot of blue and yellow that is being worn on that. And I think for you and me, Henry as followers of Jesus, a backdrop of pain and war and difficulty. This has always been a moment when the church shows up. The way the global church has showed up has been absolutely amazing and inspiring right now. So we have partners in Romania and Moldova and immediately for them to reach out to their colleagues in Ukraine and say if anyone needs to get out of the country, family members, we are here. We will meet you at the border. We will make sure you are in a safe spot and there is nothing we would not do for you. And that’s what we’re seeing from the Romanian church. That’s what we’re seeing from the Moldovan church. That’s what we’re seeing as individuals come in. And then even for organizations, Henry, just in the last several days, compassion international reaching out to their whole, you know, kind of support and saying Our friends hope international. They are in Ukraine. They’ve been in Ukraine for 25 years. They’re going to be there. And not just that and then us trying to point people to other organizations that are doing great relief work and celebrating the work of water mission. And there’s so many and I just love the way that this truly is bringing together the global church as it should. A moment of crisis should bring the church together and in a way that is so inspiring where it is not about organizational logos. This is about the global collective body saying, What can we do to make a difference for our brothers and sisters that are experiencing real suffering right now? So it has been a beautiful picture of unity at a national level for Ukraine. But I think it’s also been a beautiful picture of unity for the global church right now to

Henry Kaestner: tell us a bit about the size and scope of your ministry. I know you’ve got 47 employees. You were founded in the Ukraine. I actually want to get to their founding story a little bit because I know that we’ve had you on the podcast before, but I don’t know that we’ve gotten into that as much because now it’s so relevant. But who do those forty seven employees serve? And also tell us a bit about what we’re hearing on the ground from some of those hope clients.

Peter Greer: And the first thing that comes to mind, Henry, is just there is there is a fatigue that is very real. You hear it, you see it. You cannot live in a situation of that type of stress and concern for your kids, for your family members and it not take a toll. And now we are not on day one or two or three. This is long term stress and it is it is taking a toll on our friends. So I think that’s the reality of war, conflict, fear that impacts every part. You are not sleeping, unable to to eat. When you are focused on survival, you think about those families that are living in the subway. And if you’ve been in a Ukrainian subway mean built as bomb shelters, they are so incredibly deep. And that’s where families are living right now again. And it’s not short term now. It is going to be measured in weeks, not days of how long families are going to be living in that type of stressful situation. So clients, staff, the broader country is experiencing a level of trauma right now that is very real, very, very, very real. And when I think about the impact on the clients, we always know that it is the most vulnerable that are impacted the most severely. So, yeah, I mean, focusing on where do we get food focused on what is the safest place and and we can’t get there. The cities are shut off. As you said, 70 percent of our work is in the east in areas that now were under Russian control or still at the very forefront of the fighting. And if you saw the recent headlines of the nuclear power plant in Russia, that is the founding city of Hope, international and staff and lots of clients that are in that area. So I think that to me is just the reality of chronic fear and stress and the impact that that has on on an individual and at the same time, courage and compassion. We are seeing a response that is so unbelievably inspiring of people that are willing to sacrifice. Or someone else? Yeah, so there’s so much more that could be, said Henry, but that’s yeah, I think that’s

Henry Kaestner: give us a quick overview of the history, but then talk to us and bring that into the services and how a business in Ukraine will interact with you and the type of financial services that you provide. I think it’s important for us as an audience of investors to understand what does it look like to invest in businesses in a place like the Ukraine? And it may be too early for us to talk to you about, well, what is it look like to invest in businesses in Ukraine immediately after this? It’s probably too early. And yet you probably have a sense of what those businesses do and the services you’ve offered. And and presumably to the extent that there are some loans, there’s going to be some defaults. But just, yeah, just a bit history right through the services you offer. Yeah.

Peter Greer: Well, Henry, it’s not too early to talk about what is coming because we’ve been through this before in Ukraine. If you actually look at what happened after the fall of the Soviet Union, you look at what happened in the early 90s and you saw all of the challenge. And so Hope International came in with relief at the time, not Hope International, but the church that was involved in the founding of Hope International came in with relief because in a crisis, that’s what is needed and so provided food for those that were insecure, provided housing, started rebuilding churches and really seeing this opportunity to love. But relief is always best when it is targeted and it is time bound. And there was a moment that really was the turning point when Pastor Petrenko in Ukraine said to these individuals. And Jeff Wright, hopes founder. We sure appreciate all the aid that you’ve been providing, but isn’t there a way you can help us help ourselves? Isn’t there a way we can no longer become dependent on your charity and we can have the gift of work we can provide for our families? And that was the moment that Hope International was born. And really shifting from charity to then development. And so in a very similar way, that’s what we’re going to experience. There’s going to be a time of outpouring of charity that is good and needed and appropriate. And then I believe very quickly it’s going to be an opportunity to rebuild the enterprises, the small businesses, the micro entrepreneurs. It’s going to be a time to help them get back to work and rebuilding their nation. And so that was the founding story. That is what we continue to do, and that is what we are going to do. Been there for 25 years and we’re going to be there for the next 25 years, helping entrepreneurs rebuild. Initially, it was about the small scale markets, but then really got into agriculture. 60 percent of our work is investing in agriculture and greenhouses and helping with food production in Ukraine. And that is what we’re going to continue to do on that.

Henry Kaestner: Tell us how you do that. Do you compete against the banks in the Ukraine? I know enough about hope to know that you have programs and services on top of the lending, but give us an overview Aminu menu, if you will, of what you do when you’re working with one of these agricultural entrepreneurs, one of these farmers. And by the way, when you talk about insecurity, you’re talking about, people are just her hungry. And as an aside, this weekend, my family and I watched the movie The Pianist. This was an Oscar winning movie from maybe 30 years ago. Roman Polanski movie. Adrien Brody, I think won Best Actor for it. Incredible. And it did such a great job of talking about a period of time, which is interesting to watch right now. But you came away from that and just realized that very quickly somebody can become food insecure when all of a sudden the shops go and you just you’re hungry. And that becomes that was, you know, for two hours. Effectively, you watch Adrien Brody going around and trying to find food. You’re working with these farmers. What does it look like to be able to serve them as they look to to feed this country?

Peter Greer: Yeah. Well, unfortunately, the timing of this, as at a time of individuals should be planting right now. There should be a time where there’s a whole lot of work being done to get ready. So I do worry if if there is an inability to at this stage, be planting the seeds and plowing the ground. I do think there’s going to be a crisis in the months to come on that as well. So what does it look like? It looks like the agricultural inputs are being matched with the hardworking entrepreneurs, hardworking farmers and then helping them to feed their families and feed their nation. So on a practical level, it’s inputs. It’s access to capital so that individuals can get what they need to grow up a whole variety. But for us, a huge, huge emphasis has been in greenhouses that turns it from just one growing season a year to multiple growing seasons a year. So doing a lot with helping individuals have access to greenhouses as well.

Henry Kaestner: Tell us about that. Their lawns ever equity deals. How do you source those deals?

Peter Greer: Yeah. So we keep it real simple. We do all with loans, so we do not take equity in the different ventures, but started with. Real small loans, you know, 50, $100, 200, $500. And then as we’ve grown now, it’s in the thousands of dollars of investments. And so, yeah, it’s not by any means our largest country of operation, but it has been, yeah, long term commitment to walking with these entrepreneurs. And I guess Henry, again, my mind, I feel like I’m not able to really articulate this real well right now. It has been a tough, tough season because as we are with our clients and with our staff, there is this sense of a feeling like there’s not a whole lot we can do right now and we will be there when the rebuilding begins. We know that. And right now, safety and security of staff calling all of our clients and saying immediate grace periods. We know there’s going to be write offs. We know there’s going to be loan forgiveness. And I think that’s an opportunity to show the different of our model and methodology. If you had your store ransacked by an invading army, we are going to help you not through the normal mechanisms, but we’re going to help you get back in business through an outpouring of compassion and generosity. And again, just checking in with clients praying for them. And yeah, it’s real hard when you think about the work that we do in light of an invasion and just so desperately wanting this to be over so that that rebuilding time can come, but it’s not there yet. This is not a time to be planning fields yet. This is not a time yet to be restocking shelves for the micro-entrepreneurs. And so it just is this huge piece of just picking up the phone call and clients making sure staff know we’re with them and doing everything possible that they would just simply know we are here, that we see. We know we care. And in many ways, just getting ready for as soon as we can. There’s a whole lot of excitement and anticipation the day that there is peace. The rebuilding will begin. And yeah, that’s really what we are actively planning and preparing for.

Henry Kaestner: One of the key differences in your model versus those of other models that invest in developing markets is that you have this faith driven staff and a couple of things. It just occurred to me. Number one, I see the the fatigue in you knowing that this is something you’ve been wrestling with and looking at. And the second one is, I’m just so glad that you’re in the market in the theater, if you will, loving all people because it would seem to me that when you have forty seven people able to call business owners that they know that are all in all, 47 of these are driven by their Christian faith. There’s an opportunity to love on people that might be different. It’s going to be different. It’s got to be radically different than when times are great and hope is just another loan. You know, they could get one from a bank or someplace else. And yeah, the hope international pray for the employer will pray for them. But and maybe that resonates a bit. But this would seem to be this time that while the faith aspect of your model and of your workers on the ground really, really matters. Am I getting that right?

Peter Greer: Yeah, you’re absolutely getting right. We saw that in the founding years of Hope International. We saw that in the invasion in 2014, and we are seeing it right now and I couldn’t agree more. Henry, when your world is shaken, when what you have been accumulating, what you’ve been saving and investing, when that is taken away, the question is what do you have? And for those of us that are followers of Jesus, we believe you can take our businesses. We believe that there are challenges that we were experience. And in the midst of that, there is a hope that is unshakable because it is not dependent on our circumstance, but on the character of Christ. And if the tomb is empty, that has relevance for us today. And so, yeah, we have seen we have definitely seen in many cases working with clients for years and years and years. And then it’s in a moment of crisis that the door opens to conversations about what really matters. Is there a hope in the midst of everything falling apart? And we would say, yes, there is on that. So yeah, I anticipate I believe this. We’ve already experienced it and I believe we’re going to experience it in the months to come. If the church can mobilize and if the church can be on the forefront of caring, of responding and rebuilding. I believe there will be incredible opportunities for the gospel to advance in Ukraine right now.

Henry Kaestner: Speaking on Hope a bit, I was really impacted by your sharing about one of the prophets talking about hope amidst conflict and challenge. Tell us a bit about that as very, very relevant for what’s going on right now, but also has to do with a work that God has been doing on your heart for a while. And I think you’ve got a book coming out about this, but tell us about this hope that comes. Out of the profits that’s made such an impact.

Peter Greer: Henry, this has been an absolute gift for Christmas and I to work on really this question initially of how do some of our friends keep going for decade after decade when they have every right to be disappointed, disillusioned, cynical and give up? And they haven’t like what is it? And you know this we have these friends and they just they just have this, as Eugene Peterson says, this long obedience in the same direction and what is it that sustains that? And so thinking about Zimbabwe, why are they still serving your our friends in Haiti? What or thinking about all of our friends that have just had this long term faithful obedience? And we started doing a research project really of saying, what is it that grounds their long term service when there are incredible challenges? And the theme that they kept bringing up again and again was this idea of a grounded and rooted hope, and they kept bringing up again and again this Old Testament prophet that I could quote one verse from. I could quote Jeremiah to 911 for. I know the plans that I have for you declared the Lord’s plans to prosper. You give you hope in future not to harm you, and I could quote that, but I had no idea of the full scale and scope when those words were written down by Jeremiah. And you look at Jeremiah and it was in the midst of an invasion from an occupying force that destroyed his homeland. It was in the midst of him having incredible personal challenge, death threats and assault and slander and all of these challenge. And yet sometimes he’s known as the Weeping Prophet. I think that’s the wrong description. He’s the persevering prophet. He’s the one who had this long obedience in the same direction. And in Jeremiah, 17, it really points to this idea of what sustains his service and how did he keep going. And. And I think what he wrote down, what got the message that God gave through the prophet Jeremiah has so much relevance for all of us today. And it basically said, You know what? You try to do it on your own, your strength. So that is not going to be when the drought comes, you are going to break off and blow away only if you have a hope that is in the character of who God is. That is the only way that you can have green leaves and drought conditions. And as we listen to our global friends, that is what they kept, pointing the example of Jeremiah faithfulness that is independent of circumstance and a hope that is rooted in God’s character. And instead of like turning inward instead of focusing on all of our disillusionment or all of our pain or all of our disappointment, it simply is looking up and this wonderful promise that Jesus gave. So in this world, you will have trouble like we were told this is going to be hard. And any North American expectation that following Jesus is easy is an unbiblical expectation. This is supposed to be hard. This is supposed to be difficult. But what does Jesus say? Says, but take heart. I have overcome the world, and I think that’s what our friends in Ukraine know right now. This is ridiculously painful and hard to watch what is happening, but it is possible to experience the presence of Christ in the midst of it. And for our brothers and sisters in other contexts around the world that are also experiencing incredible challenge, they expected that this was going to be hard and they’re not trying to do it in their own strength, but they have found a way of connecting to the author of Life. The reason we have hope they have found a way that their faith is what grounds them, and they know that there is a different end to this story than the current circumstance.

Henry Kaestner: What an incredible, encouraging note to end on. We’re now linked to this in the show notes, but I just want to encourage listeners right now, as you wanted to know more about the work that I hope international does and then their take on what’s going on in the ground to include links on how to give and get involved with other ministries. One of my big takeaways from Peter is just the way that the global church is responding. And I love your open headed nature with the way that you’re calling attention to what Samaritan’s Purse is doing, A.W. and Water Mission and others. I really encourage you to check out the Hope International website and for us as listeners, as faith driven investors to be on our knees praying about how God might have us allocate our capital in light of what’s going on and understanding that there is an opportunity for us as Faith Driven Investor is to have this long obedience in the same direction and try to understand how God might have us deploy capital for us to think about doing that. In Ukraine, there are a couple of dozen or so other countries that hope works in and as well. But right now, I think that we are indeed looking at some troubles which are in Eastern Europe, so let’s hope that God. Lines as faithful as we think and pray about these things. Peter, I’m grateful for you. I’m grateful for our friendship. I’m grateful for your leadership. I’m so fired up about the new book that’s coming out so I can understand more about this pattern that you see. And I love that I love this concept of who can you look at that are really the heroes out there on the ground doing things in a way that after two or three months, we’re like, Gosh, this work is just too hard. We just we’ve got to quit. And you knowing that there are men and women motivated by their Christian faith out there that are sticking to it? What does that look like? They grit through a biblical worldview, and so thank you for that. And let me just pray for you and and hope Heavenly Father. We lift up Peter and his leadership, and I thank you for the fact that he’s had a faithful obedience in the same direction for 17 18 years now as a CEO of Hope International and the way that he’s been such a light for me and so many others, I thank you for the work of hope on the ground and a few dozen countries in Africa and Latin America and Asia. Just it’s amazing to see what they’ve done, what you’ve done through them. Dear Lord. Specifically, though, today we pray for those 47 families. We pray for the 47 families that you will bring them safety and security. And yet, Lord, that you’d also allow them to be able to continue to serve those clients. We pray for the clients, we pray for these businesses that we pray for the conversations that hope employees will have with these businesses and checking in and praying with them. Dear Lord, we pray for the safety of your church in the Ukraine, the men and women that are running these businesses that are trying to keep the businesses afloat, trying to love their families while trying to even just find food. Some of these clients might be living in subway stations right now, Lord, and I think that just my impatience when I have to sit in a subway station for ten minutes when I’m waiting for a train, as I did last week in New York, and think that they’re there for days or maybe even weeks or longer. Dear Lord, we just pray for the brokenness of this world. And yet we also understand that you have told us that there will be troubles in this world. Find his faithful and obedient and worthy of those troubles because you have indeed overcome the world. Help us know what that looks like. Dear Lord, forgive me for the fact that I too often do not have that perspective and I coast too often. Forgive me for that. Allow me to rise to the occasion. Allow these listeners to do the same in Jesus name. Amen. Amen, thank you, Henry. Bless you, brother. Really good to see you. Do I get to?

Henry Kaestner: Welcome back to the Faith Driven Investor podcast. I’m here in our virtual studio and sweet with William Norvell William.

William Norvell: Greetings, greetings. Love the changes we’ve made at the virtual studio lately. It’s looking, looking fresh.

Henry Kaestner: It maybe, maybe it’s the same bookshelf, but you’re looking good. You look like you’re headed into a weekend with Alabama Crimson on. Is that right? Or is that

William Norvell: kind of what happens around weekend time for me? No, no. It’s a blend, but it’s Alabama Red Alabama.

Henry Kaestner: It’s not Stanford.

William Norvell: It’s not real. No, it’s crimson.

Henry Kaestner: Okay. All right. That’s good enough. So before we get into, we’ve got a really cool podcast guest today, we’re going to talk about a topic we’ve actually never talked about precious metals and what that looks like. And so I’m fired up for this for a whole bunch of different reasons, which will become manifest shortly. But before we do that, William, this is not the only podcast you have done, and we’ve been remiss in not mentioning a really good work that you had put out there in podcast land and to share real quickly with the FDE audience. What did you do? Why did you do it? Keep it to two minutes or less, as you have done with each of these podcasts, which is really cool. I mean, I can do a podcast episode this like two minutes long. So give us a description.

William Norvell: Podcast episodes are a lot shorter than my typical overview of my podcast, but yeah, now I appreciate that. Yeah, so Phil called the God to personally go through a journey to understand humility just as season of my life, where I just felt like I wanted to see what God really says about that. So I put together 50 really short devotionals and a 50 sounds like a lot, but they’re all less than five minutes. And I basically just read a passage of scripture and a couple of different translations and then have a couple of quick commentary. And then actually, I leave the last ninety to one hundred and twenty seconds just for reflection on what God might be saying to you through that podcast. So five seasons each goes through a different topic of humility and how we can play that out in our lives. And yeah, it was useful to me and thought maybe somebody else could learn something from it. You get a lot less of me and a lot more of the Bible, which is probably a great podcast.

Henry Kaestner: It was awesome, so I’ve been blessed by it. Thank you. I think that our listening audience can be blessed by two as a will by our guest today. OK, so I’m gonna set this up a little differently than we do. We are going to talk to David about his background, how he came to faith, how it informs what he does, and there’s a bunch of things about how he has a culture and his company, I think, are really worth exploring. But this podcast came out about a little differently than most do, and it came out of a source of almost like a mini debate. OK, so I’m I set the stage. All three of us, William David and I attend something called the Christian Economic Forum every summer, and it’s a great blessing. Chuck Bentley, who’s been on the program, is such a great leader, such a great guy. The conference is unbelievable. It’s just really some of the great thinkers from around the world, and it’s just awesome to go to. So a great friend of ours named Tom Darden led off and had encouraged Chuck to say, You know what? We had these great presentations, but let’s have a little debate. Let’s get a little contentious. Let’s go ahead and look at some issues that maybe there’s a we can have a healthy debate on. And so Chuck said, you know, in the next seventy five minutes, we can have this kind of debate atmosphere and let’s talk about some of the things maybe we disagree with a little bit. So he had a couple of speakers up and he or one of the speakers offered up this question how might you as a Christ follower hedge against inflation? Which is a great question. It’s a great question. Some of the panelists, some of the people then offered up some answers came from the perspective of cryptocurrency and then also precious metals. And so I felt compelled and challenged by Tom, who would say, let’s go ahead and have a healthy debate about things. I felt compelled to go up to the microphone and ask this question. And what I had offered up was in a world in which most Christ followers are not investing in their assets in a way that participates in underlying ministry. And by that, I mean by investing in real estate assets where there’s a corporate chaplain that might ministered to the people in the community or into private equity or venture capital, into faith driven entrepreneurs and expanding the work they do and creating redemptive products and services and things of that vein, things that you’d be relatively familiar with if you’ve been listening to podcasts. I said, if that’s the case, should we be really and we’re looking at precious metals and cryptocurrency, should we be instead asking about how do we take our portfolios and hedge against inflation? Should we instead be asking, how do we take our portfolios and hedge against Judgment Day? Now again, if you’ve been listening to podcasts, that’s not language. I use a lot, but I wanted to go ahead and play ball a little bit and be somewhat, you know, kind of throw in a kind of a debate form. And my commentary came across and it was meant to come across as offering up that there wasn’t a lot of spiritual immigration in precious metals or cryptocurrency with the underlying assets, and therefore a Christ follower should underweight them and shouldn’t focus on them as much. So at lunch, David, today’s guest came up to me and very, very, very thoughtfully and very gently helped me to understand. That there’s a lot more nuance there, there’s a lot more at work there, there’s a lot more redemptive purpose to precious metals than I had seen. And there’s a viewpoint and a perspective that as I heard it and as he walked me through it, I’m like, That’s really helpful and instructive. And I still, to be clear, still believe that crossfire is this incredible opportunity to participate with where the underlying assets proclaim God’s love and sovereignty and create redemptive price and service and things like this. And yet David’s perspective and his background and his expertize are super important for any Christ far to consider. And so, David, we’re going to do solidify. Typically, we start about the background of a gas and we’re going to get there. But let’s get right into it and talk about what did you come up with to me at lunch and say that made such an impact on me?

Speaker 3: Yeah, I think one of the things that is helpful in we can look at this from several different vantage points is to see gold as a reserve asset. And you know, is it something you’re speculating in like cryptocurrencies or are you thinking that it’s going to buy it at one acts and it’s going to be 10x tomorrow? It plays a very different role within a total portfolio. And one of the things that I wanted to visit with you about there in Colorado was this idea of gold being on a par with what we have incorporated into our other life in other areas. So for instance, you’re married, man, you understand that there’s a need for relational reserves and not a perfect husband. You may not be a perfect husband, perfect father. I certainly am not a perfect father. And in the continual investment sex that there is an excess reserve such that when there are relational drawdowns, you’re not taking the account negative. You know, that emotional reserve relational reserve biochemically were the same way you can throttle your body and biochemistry to a certain degree. But when you deplete your serotonin levels to a certain level, it’s game over. You’re talking about some clinical issues which have to then be treated. So whether it’s serotonin or cortisol, you bring things down to a certain level. You get to a critical point and you can’t recover. It’s the same with countries when they’re running foreign exchange reserves, you end up seeing currency crises, in particular countries where they run their reserves so low. Then all of a sudden external pressure emerges. They don’t have the resources to deal with it, and it’s game over. The Asian contagion that we saw late 90s was a perfect example of that, where Vietnam and Thailand came under intense pressure because their foreign currency reserves diminished to the point where they now had a currency crisis that followed. So reserves as an idea, I think, is where I would want to hang my hat with metals. And we do this to a certain degree. Already anybody who from a financial perspective, from a personal perspective, has an emergency fund has done that. Maybe you’ve got a month’s worth of expenses set aside or three months worth of expenses set aside, and that’s your kind of personal cushion. Why do we do that with our company as well? I think gold fills this role within a total portfolio as a reliable reserve. You look at the history of gold, it’s really just money. That’s what it’s been for five thousand years, and it happens to be something that has a stable value through time versus any paper currency, which frankly, the history of every paper currency to this point has been experimental. It’s genius inspired. And then all of a sudden it blows up. You know, we’ve been doing this for three thousand years. The first paper currency was the Chinese. So the question is, do you want your reserves in something that is intrinsically worth the ink and paper it’s printed on or representative of time and a very laborious process to actually get it out of the ground? So this is like energy in a packet. You have that reserve because there’s times in life where you need the reserves. We know that from an emotional, cyclical standpoint, that’s why we need emotional reserves when it comes to a business cycle. Sometimes things are booming, sometimes things are moving higher and it makes sense to have leveraged portfolio and there’s benefits to that. There’s other times where the market’s moving against you, and you may either be in a position to play the patience game because you didn’t have enough reserves and now you’re just sitting there waiting and saying, I hope I get back to break even someday. Or you have these reserves which allow you to lower total volatility and over the course of time, actually improve returns. So looking at gold as a portfolio allocation, it plays that role as a stable reserve and it’s intended to be put to use at some point. It’s not a debt asset. It shouldn’t be thought of as a good asset. And I think that’s the indictment that, for instance, Warren Buffett has certainly laid at the feet of gold. His father was a big proponent of gold when he worked in the Senate. But Warren had no interest in it, in his view, would be, Look, I want companies where you can see things being produced, culture changing, and I like the products everybody needs those products like. That’s an investment that I think can move forward through time. Gold said that asset would be his opinion. My view is that he appreciates the value of reserves, too. He’s currently sitting on a hundred and forty four billion dollars in cash, just as Apple sitting on $240 billion in cash and liquid assets. The question when you’re looking at cash in liquid assets ends up being denomination, denomination, denomination. We take this for granted in the US because the dollar is relatively stable. Maybe it’s not so much this year, but that’s no big deal, really. If you go to Brazil or in recent years, Argentina, where the annual inflation rate is twenty five to thirty five percent, a few years ago, it was as high as 45 percent in one year. You’re basically cutting the value of your savings in half if you leave them in something that would be considered a cash reserve. So the denomination question becomes an issue, and I’m not pretending to be a currency expert where, okay, I don’t want to be in dollars. Should I be in Swiss franc? Should I be in yen? Should I be in euros? What I’m saying is that for 5000 years, a reliable store of value savings and actually what was considered money up until 1971 on a global basis was gold. So it is a reliable reserve. The need for reserves, I think that’s where it kind of speaks for itself. We know business cyclicality. Sometimes you need it and you’re glad when you have it. That’s one of the things that I think we learned from 2008 and 2009. The global financial crisis did not start out as a, you know, liquidation of companies because they were under duress. It started out when Lehman and Bear Stearns left and they didn’t have enough in capital. It was a liquidity crisis before it became a solvency crisis and arguably the weeks leading up to the solvency crisis, they would have said, We have ample liquidity. We’re fine. Liquidity disappeared. And that’s when things began to snowball in 2008 and 2009. So reliable reserves is an issue, an asset that is outside of the financial system. So essentially you’re removing it from counterparty risk. These are the aspects that make gold a solid reserve. I mean, I think that’s a part of what we talked about.

Henry Kaestner: It is. And so I’ll tell you how I’m applying it. I don’t want to put words in your mouth, but I’ll tell you how I’m applying it. You can tell me if I’m thinking about the right way, and that is that there are going to be different faith driven investments I’m going to get excited about in a year’s time, 18 months time, twenty four months time and what I need to wrestle with. And maybe this be interesting to actually talk about just a little bit and get your take on. But generally, I don’t know that I want to be 100 percent invested right now in illiquid private equity and all its investments. I want to be able to have some money that’s available if I see a compelling opportunity to give, for instance, because I think that this is the broader stewardship. If there’s, you know, a calamity or some place that is clearly that God might have my capital deployed in a way that advances kingdom philanthropically, I need to have some liquidity or, as you would say, reserve if there is a Great Kingdom investment opportunity, same type of thing, say, 18 months or 24 months. And I think that it maybe we’ll get this in the second again about, well, what is that right ratio? You know, Tom Darden, who we had talked about before, who had introduced this kind of concept of a healthy debate is famous for being completely deployed. He’s always completely deployed now. He has a diverse portfolio where he has one hundred plus private investments, and in any given year, two or three of them are coming due and having a liquidity event. So he tends to have some level of liquidity just by virtue of the fact that it’s very diverse. And yet he would probably also say that he never really manages for liquidity because he’d rather have those assets always deployed, always working towards those things that Warren Buffet would say. I don’t know that I’d go to that extreme. And I, for instance, would like to see some percentage of. Available to be able to honor a guy’s car and see some of the opportunities, but am I getting it that the right way and that that is something that if OK, Henry, if that’s the case and you want to take 10, 15, 20 percent of your portfolio and have it in reserve to be able to answer God’s call and see opportunities? What I’m suggesting to you is that precious metals is absolutely a place that you might keep that and maybe you keep it in cash. Maybe you don’t, but you should be thinking about precious metals in that regard. Am I getting it right?

David McAlvany: Yeah, I think you are. Because again, what you’re doing is you’re setting the mindset of this should be put to use. And I think this is where it when you look at the parable of the talents, you can see someone who had no intention of putting something to use. It was strictly buried versus someone who had every intention of having a resource and putting it to use. And my suggestion is that the multiplication factor this is perhaps a I’m not a theologian, so feel free to critique this, but the multiplication factor that you see in the parable of talents, it can happen a couple of different ways. You buy an asset at one X and it goes to 10x because it was a great growth prospect, opportunity, et cetera, et cetera. Or you buy an asset at One X. That’s trading at a fraction of one X. In other words, you’re trained to understand the value and what real value looks like. So if that’s a 100 acre farm or 100 shares of General Electric or a private equity venture where you say this is really priced attractively, I should be doing something about this where value gets factored in in a major way. Well, the point is putting it to work opportunistically, which is, I think where you’re hitting the nail on the head, yes, you want to be able to have enough liquidity that you can deploy opportunistically. We have a really interesting situation now because ordinarily a business cycle ebbs and flows. If you look back, say, two or three hundred years even stretching back into the British mercantile history, you had about a three to five year business cycle and they were many booms and busts. Nothing really catastrophic. But, you know, 60 and 94 was the creation of the central bank, the Bank of England. We had our central bank kind of catch its legs, the second iteration in 1913. This was the second central bank of the United States with the first one down. But what has happened is we’ve basically said we think we can manage the business cycle more effectively. There will be no more declines. There’s no reason for us to ever have a recession. And so there’s a certain presumption that now exists within the central bank community. That is, if we push this button, pull that lever, we’ll never see a recession. But what it’s done is it’s extended periods of growth, but it’s also made the down strokes much more catastrophic. When they lose control, they really lose control. And so I think we’re in a different environment where the opportunities could arguably be better. Having liquidity available your question and maybe I’m running ahead, so feel free to rein this in. But your question of kind of proportionately what that would look like. I know much of the discussion you have is around Faith Driven Investor and it takes you to the private markets. If I looked at the backtesting in the public markets, which is where I can get pretty decent data going back a couple hundred years, you would look at a ratio of about seventy five twenty five seventy five percent allocated to assets that are growth oriented. So in my case, that would be capital markets, the equity markets that the S&P 500 did, that would have it. Seventy five twenty five is an interesting mix because three quarters of your allocation is oriented to growth, but with 25 percent allocated to gold. Any major down stroke if you’re doing an annual rebalance once a year annual rebalance Any down stroke in the market means you’re putting that liquidity to work at much lower numbers, and your return to full value isn’t that long. Patience game of equities are down 30 percent or 60 percent, or, you know, we had tech stocks in 2000 2001, down 80 90 percent, right? It’s not the Long March back to break. Even you were able to redeploy on a lot more at a lower number, and your recovery cycle is that much shorter. So if you’re looking at total returns, that’s 75 twenty five mix. Even though you’re taking 25 percent horsepower out of the growth equation, over a 50 100 200 year period ends up being a superior rate of return, a more aggressive growth portfolio because you’re avoiding the major down strokes. Or I should say the down strokes are less impactful. That makes sense.

William Norvell: Now that does. That’s really one of the things you just mentioned was a long time horizon. I want to dig into that for a little bit from a Faith Driven Investor perspective. You mentioned 10, 15, 20 years. How do you think about that? You know, you’ve been investing a majority of your career in life. How do you think about that from a faith perspective? Do you have, you know, but. It’s a twenty five year horizon and buckets of one year horizon, I mean, you know, we’ve got a lot of listeners that are brand new to this and figuring out what this could look like in their life. Do you have a year philanthropic budgets and 20 year philanthropy? I know that’s kind of a broad question, but I’m just curious your overall perspective on portfolio management from a faith driven perspective.

David McAlvany: Yeah, I mean, I think your reference to buckets is helpful because there is no single asset class that is deserving of 100 percent of your time, attention and resources. I look at precious metals is one of many investments, and there are specific ways to utilize precious metals effectively. Right. So that’s one bucket and there’s different in that market. There are arbitrage opportunities and an ability to compound ounces in a very compelling way. So even if you said, well, it’s just sitting there collecting dust. No, no, no. I would tell you that after 50 years of being in the business as a family, they’re very productive ways to turn a thousand ounces of silver into 2000 ounces of silver without adding money to that portfolio or gold or what have you. So management style within a bucket is also important. First bucket precious metals. Second bucket cash. The third bucket real estate. The fourth bucket stocks and bonds in the fifth bucket would be sort of private assets that could be private equity and alternatives. It could be a business that you own and control. So not everybody has the fifth bucket. If you’re talking about an entrepreneurial venture, but you might have that fifth bucket if it was in the adult category, where again, it doesn’t fit the traditional daily traded stocks and bonds, cash, precious metals or real estate. But there’s ways that as a steward, you can engage in harness income and growth within each of those buckets. And that’s where, you know, appreciating what value looks like, deepening your understanding of the dynamics that drive each one of those asset classes. Some people choose to have one focus on one asset class. I think the best way to approach stewardship and wealth management across multiple generations is to say appreciate the value that each of these buckets can provide. Precious metals will never provide the same kind of income component that say a commercial real estate portfolio would have right, and there’s risks and potential pitfalls within commercial real estate that you are not going to have within multifamily or single family. I mean, to all that complexity is a part of our ongoing effort to understand and make wise decisions in each of those areas. Diversification I take is a given, with each of those buckets being an opportunity to learn and to grow and to come alongside experts who can shorten the time frame, step in the learning curve and help us get farther along in terms of the progress of stewardship.

Henry Kaestner: OK, I want to go backwards here a little bit. This is kind of the Upside Down podcast interview because at this point in time, some people may be asking Who is this guy? And this guy’s an author and is a podcast as he owned

William Norvell: a gold ETF. Does he want to invest in it?

Henry Kaestner: Yeah, that’s right. Yeah. Where is this going? So David, I want to start from the beginning. We’re going to come back up. There are the questions that we want to ask about this, but why don’t you tell the audience about who you are? Let’s go through an autobiographical sketch. And if you don’t mention the whole part about the triathlons and the podcast, then I’m going to ask you about them.

David McAlvany: Well, I mean, for some people, the autobiographical sketch can be put into a paragraph. It took me about fifty six pages. I wrote a book, If

Henry Kaestner: you don’t have that much time.

David McAlvany: I know, I know. The Intentional Legacy was a book that I wrote in 2017, and it’s a very personal look at what goes into managing resources where we’ve basically redefined a balance sheet to save their spiritual aspects of the resources that we’re managing. There’s emotional aspects, and that’s a resource we have to manage. There’s interpersonal and relational capital that needs to be managed well because the reality is, you know, and I know we’ve all met people who have vast resources of money, and yet there’s pockets of poverty in their life and you can say, well, they didn’t do a really good job managing a relationship with a brother or a father or a grandfather or an uncle. And you can see sort of the unwind of that aspect of their life. So to me, managing resources is really important. I could only approach the topic of legacy from a very personal perspective. And so the intentional legacy starts with sort of our family dysfunction and the things that we’ve learned about our best attempt to do a better job at managing resources. And so I mean, we could start anywhere running away from home at age 14, living away from home for a year at a boys home, really finding faith at age 16 and allowing the pendulum to swing from agnosticism to really concerted effort to make up for lost time. Yeah, I don’t know many 15 16 year olds who are dead set on reading everything that Dietrich Bonhoeffer has ever written and diving into spiritual formation. And sort of. The classics of Christian Faith. But that was me at age 16, looking back with some regret at an early age, saying, What have I done? What am I doing? What is meaningful to me, looking forward is very different than what I thought was meaningful. Just a few years ago. And so the recapture took me to studying philosophy theology at Baylor. And, you know, just to sort of fast forward

Henry Kaestner: how long have before. If I do want to fast forward, I want to get there. But I just have to reflect and just acknowledge the fact that that is amazing. And maybe it’s just because I’m the father of three teenage boys, none of whom I’d like to think. Maybe they know who Dietrich Bonhoeffer is. But reading everything he’s written and making me think that and I hadn’t. That’s amazing. That’s incredible. I mean, that’s really so you’re looking back with some regret on lost time when you were 16 years old.

David McAlvany: Yeah. And you know, the advice my dad gave me was study finance. Study business is very practical. You need to know something about marketing. And he just says, I mean, he was engaging with the world and giving me advice that absolutely made sense in terms of professional operational place in the world. But I was still trying to unpack Who am I and what is this all about anyways? So for me, bipolar was this perfect place to ask big questions and to be mentored by men and women who had razor sharp minds and soft and tender hearts. And Henry and I experienced it by all has informed the way I pray for my kids every night, which is that they would have strong minds and soft and tender hearts. And that’s because that’s what I saw with these people who had a passion for the gospel and seeing God’s kingdom come. But these were no slouches when it came to their professional credentials. Their ability to engage the content matter that they were responsible for winsome, severe even. I mean, they took it really seriously, and I loved it.

Henry Kaestner: What a great commercial for a great university. Gary Lindblad runs a program there for business, and he’s just an amazing guy. He is incredibly winsome. I don’t know if you know you must know Gary. Gary just is led in 80s rock band and has music videos out there. His yet they’re fun part about him, but he is a deep thinker, passionate about his craft and loves the Lord and just makes me want to spend more time with him. So I’m a big baseball fan too.

David McAlvany: Yeah. You know, you graduate with a degree in philosophy and you don’t have sort of a stack of offers. Actually, my wife graduated with a degree in philosophy, and she did have a stack of offers, including from Goldman Sachs. Maybe it’s where you go to school as well. Boston College is slightly different in terms of pedigree than Baylor,

Henry Kaestner: but Bill is yet in there,

David McAlvany: so formation was absolutely critical. That was the big benefit to me of being at that place. You know, fast forward to joining our family business in 2003. I spent some time working at Morgan Stanley. And, you know, between a variety of start ups, including Restaurant Lunch with my brother in law like this is all sort of post-college leading into twenty five newlywed learning. All I could about Wall Street and the things that my dad originally said, you know, you should take an interest in this. I think you’ll find it very intriguing how finance ends up being this hub where everything from international relations and public policy and economics and it all comes together in the market mechanisms that are pricing assets constantly and taking into account the new information that you’re getting from all of these various sources. I think you’re going to find it interesting, and it took me years to come back around and say, You know, my dad’s pretty smart. He’s right. It’s really interesting. It’s fascinating. So that’s the world that I’m engaged in today. We have an asset management company that focuses on hard assets like infrastructure and specialty real estate and precious metals and global natural resources. We have the precious metals brokerage company, which my parents started 50 years ago, and I manage both of those businesses. What drives me every week? Henry is doing what we’re doing right now. I’ve done a podcast for the last 15 years every week, and the Mac Mini weekly commentary is a place for me to continue to allow my curiosity to just run free to ask questions that I don’t have an answer for, and to explore and to discover all the things that I wish I had known. 15 and 14 and 12 and 10 and even last year. So I think one of the things that I love about finance in the markets is it’s constantly humbling.

Henry Kaestner: Yeah. So tell me. So I just want to go back in one thing and look at if I think about the opposite of precious metals brokering precious metals investing. I think about investing in in a restaurant. And I’m wondering if you have because I do, it’s a leading question. I’m curious if yours is the same. I wonder if you have a favorite movie about investing in restaurants or the restaurant business.

David McAlvany: Favorite movie about investing in restaurants with the restaurant business.

William Norvell: The esoteric question part of this is yes, that’s right.

Henry Kaestner: That may or may not. Take it to the final version.

David McAlvany: Yeah. I got a love, there’s so many movies that I love about food.

Henry Kaestner: Yeah, you have babette’s feast and oh, it’s amazing delegates

David McAlvany: mean and Babette’s Feast is is is phenomenal. I think one of the things that I like about that, it’s feast as you get to see someone who loves taking care of people and looks at their skill set and says, This is how I care. This is how I love. So to me, one of the things that’s so gospel centric about that movie is that she’s doing the essential translation, the essential translation of what am I supposed to do with my life? Well, OK, God’s given us a certain amount of DNA hard coding. I’m inclined to be a certain person, just like William, just like Henry is, and we get to express and bring glory to God through the things that he has hardcoded into us. And so you see the chef create something of beauty, and it’s a celebration of these are people who never spoke. You know, you’ve got this whole town that they don’t get along this, but she’s bringing peace and she’s an emissary of love and servant hood, using her skill as the best way to facilitate change in this community. It’s beautiful, beautiful. You could take that and say, Yeah, but my skill sets differ and I could never fix that face. No, but you can set a different table in a different context and you should Amen.

Henry Kaestner: OK, so that’s great one. That’s not what I was looking for, but that is it is a great one, and I may submit that that’s actually better than the one I was thinking about, which is big night featuring Stanley Tucci in the restaurant business. This rivalry between these two Italian restaurants and one wants is passionate about their craft and doesn’t want to cut corners, and the other one is all about glitz and just about marketing and just the rivalry between the two. I think is fascinating. OK, but what kind of restaurant did you have?

David McAlvany: It was a fondue restaurant.

Henry Kaestner: Oh man, I love until we just did a Faith Driven Investor event in Zurich last week and coming off the heels of five Faith Driven Entrepreneur meetings in Romania, which were amazing. Unbelievable. The night before the Faith Driven Investor event in Zurich, our host Thomas Winkler, took us out to a local fondue place, and I may have had, without exaggeration, three and a half pounds of fondue. It was awesome. I think there must be some margin in that, though, because they charge us a lot of money for what I thought was just Emmental, our cheese and a little bit of white wine. But maybe the margins aren’t as big as I thought they were.

David McAlvany: No, the margins are OK. What we loved was it was an expression of our family. This is something that we’ve been doing since I was. I mean, for every year, I can remember we do a fondue feast every year and, you know, to have people come and be a part of that at our dinner table and to be able to open a bottle of wine and sit there and relax and talk. And I mean, it’s a very entertaining meal because there’s a lot going on. We do the cheese fondue. We also do the meat reckless and we’ve got chocolate fondue. So it’s a multi-course thing that takes three or four hours. So it’s the conversation, it’s the activity, it’s the matching with sauces. And I mean, we just have a great time with it. But it’s an anchor to relationship. And for us, having a restaurant that facilitated that for other people was amazing. I managed the front of the house, he managed the kitchen and to sort of literally set the table and have people just enjoy themselves for three or four hours. This is common in Europe, but we’re in and out in 30 45 minutes max. That’s the American style. And to try to sort of refashion how to celebrate one sitting a night max two sittings a night where you’ve got the place just to sit and relax.

Henry Kaestner: I was talking to somebody yesterday who was talking about his time in Israel and how he learned about Shabbat. He was an investor in Taiwan from the HTC family. Super Guy really serious about his Christian faith guys degree at Fuller and as a technology investor in crypto and blockchain. But he talked about the formative experience in his faith and that he’s trying to replicate in his family of Shabbat because he lived in Israel for a while doing some technology investing and just the three hour intentionality of what Shabbat means for Orthodox families and the beauty that happens around the dinner table and talking about faith. And, you know, no technology, no phones and just a focus on faith and food. And that’s a it’s a beautiful thing. I did not think we’d be talking about this on today’s podcast.

William Norvell: So this is not in the show notes no, but movie recommendations coming soon from Faith Driven Investor babette’s feast. Big night. Now we got some good ones. Indeed. Well, actually, that’s a perfect tradition. One of things we did want to talk about. We’d be remiss not to David. So you’ve been talking a lot about gold. You know, we’re all quick hit people. You know, we’re all trying to make money, right? So some of our listeners are, too. We’d love to two part question one. What’s the future of gold prices right now? How do you think about that? And to how do you think about what people are calling digital gold the big? Coin and crypto revolution, but bitcoin specifically and we’ve had a great guest, Jimmy Song, who came on, you know, just to talk about bitcoin specifically because I feel like that’s one of the few cryptos that is be talking about a store of reserve, right? That’s one of the few that people are comparing in that way. Do you buy that? Do you not and not like, are you putting a buy recommendation on it? But just how do you think about the new concept of a digital bank? Well, the story value is that real? Not real? Yeah.

David McAlvany: So let’s start with the second part and then go back to the first. With cryptocurrencies, you’ve got something that is incredibly innovative. Blockchain technology stands to be integrated into a lot of different economic spheres, and it’s working its way in as we speak. You know, there’s years of development and decades for it to continue to mature and have an impact. We’ve seen it in Eastern Europe, where governments have decided that they don’t want their records changed. They don’t want history to be fluid if something has happened. They want those documents to be immutable. So the blockchain has allowed for Eastern European countries to lock in time. What has happened and I like that there’ll be other iterations of that. You was smart contracts and a whole host of other things. What I would say is that it’s primarily served as a vehicle speculation to this point. And as it matures, it may have other features to it, but it still is functioning largely as a speculation price goes up, the price goes down. When the price goes down, enthusiasm wanes when the price goes up. Everyone’s a believer. So there is that dynamic afoot with the cryptocurrencies not to take away from their long term trajectory, but in the short run, they’re primarily a vehicle for speculation. And in that sense, there’s at least one big contrast with gold. Looking at the gold market and looking how gold is priced and where, I think it’s going to be priced in future years, I think this ties to where we’re at in a number of cycles. We’ve had a 12 year growth cycle in equities. That’s been helpful. But now you look at things like price to sales, price to earnings. We’re now in the nosebleed section. So from a valuation perspective, I think gold is relatively cheap compared to bonds and stocks and is going to have significant growth relative to those two asset classes over the next two to three years. Again, I mean, look at something even like the buffet ratio. We talked about Warren Buffett earlier. Buffett ratio takes all stock market capitalization and compares it to GDP. We’re now at the highest level we’ve seen in the history of the US markets, where the engine of growth that is GDP is now a fraction of the size of this speculative representation of the growth. So in past market cycles, it’s peaked at about 180 or 210 percent of GDP. That is stock market capitalization of GDP. We’re currently at 322 percent, a stock market capitalization to GDP. This is the most stretched in terms of valuations we’ve ever seen. The stock market, so arguably the energy change out of equities will promote safe haven buying for gold, just as it will safe haven buying for treasuries and other safe haven assets. But I think that is a big play for growth dynamics in the gold market within, say, a 12 to 24 month period of time. Add to that the layer of fiscal and monetary policy largesse, which would have people saying Is there ultimately consequences to running our debt levels to twenty eight trillion dollars? Thirty five trillion dollars, fifty trillion dollars? I mean, just pick a number because under modern monetary theory, the number can be any number and we’re not supposed to be afraid of it. So that number is likely to grow as it was growing under the Trump administration. It’s growing under the Biden administration. It doesn’t matter who takes over in two years or four years. The trend is radical fiscal policy and monetary policy largesse. There’s discussions among the whole cohort at the Fed. They’ll trim things back, be less aggressive. I think what they will find is when they actually do that, the consequences into the marketplace will be so grave that they have to come right back with more quantitative easing measures and again, more monetary policy push, which has significant currency market implications. Right. So currency market implications, a devaluation of the dollar as a result of fiscal policy largesse and monetary policy largesse also has on the other side of the equation, in implication for gold at much higher prices. Price for inflation If we wanted to bring history into this price for inflation, gold should be right around twenty $800 an ounce. That is its inflation adjusted price. When a market moves to extremes, you can see that not on a sustainable basis, but you can see something go to say to two and a half times its inflation adjusted price. If I had to pick a cap, I’m not going to give you a timeframe for this, but I think the cap on gold is probably five thousand an ounce. That’s twice its inflation adjusted price. And at that point, you’ve been through a speculative push, not sustainable. I think we ultimately come back down and settle into a new generational sort of flat line or plateau between 2500 and 3000 at or above whatever the inflation adjusted price is after this next major move. So that’s a little context. I do think gold has some upside. Silver is kind of a different animal. It is considered a monetary metal in its past, but it’s taken on so much of an industrial component in its uses and everything from cell phones and flat screen televisions to nanoparticles and biotechnology. That it kind of has a foot in both worlds is a monetary metal and is something that has very practical uses and is being used up. If gold has decent upside from a growth perspective. I think silver has phenomenal upside, but it’s a different animal too, because it has that characteristic where if you got into a slowing of the economy, one of the major sources of demand can diminish, and so it doesn’t necessarily have to follow in lockstep with gold. I’ve probably spoken

William Norvell: behind. That’s great. That’s great. And you know, and for reference, if you’re listening and don’t know the price of gold, gold’s about 7500 right now, give or take. So when you’re talking about that, and like I said, this is not a stock picking podcast, but I’m curious because it is a little esoteric. I don’t think a lot of people own goal, but I mean, if you watch any CNBC report, you hear this passively said, Hey, five percent of your money in gold, you hear Jim Cramer, you hear other people say that there are so many financial instruments in the world. I am curious, is there a in your particular opinion for a retail investor who says, who’s listening? Yeah. You know, two or three percent in gold, I’m convinced to look into that. Is there a better or worse way to purchase the asset?

David McAlvany: Well, there’s definitely better and worse ways to provide.

William Norvell: I figured.

David McAlvany: Yeah. I mean, you know, right now there is such supply constraints in the physical market that certain products you have to pay 30 or 40 percent over the spot price. And I’m thinking of like an American Silver Eagle, it’s a bullion coin. And yet, because there’s not much supply and demand is fairly robust, I’m not going to pay 30 percent over. I wouldn’t touch that with a ten foot pole. Right. So there’s there are ways that you can definitely go the wrong direction. One of the things that we did a few years ago and this is, I mean, full disclosure, this is a point of personal self-interest. A few years ago, we launched a program with the Royal Canadian Mint called Vaulted and Vault. It allows you to buy a fraction of a kilo bar or an entire kilo bar. Kilo bars about 32 ounces of gold. And the platform is digital. You can go online about two weeks. You’ll be able to go to the App Store and download the vaulted app, and you can treat this like a savings account, but it’s denominated in gold. The benefits are you’re getting the economy of scale off of the kilo bar, right? So you’re not paying high premiums. The commission structure is crushed. We’ve taken out the middleman. We’re buying gold directly from the Royal Canadian Mint. So the economics are brilliant, but you have an allocated gold position, which you can take delivery of if you want. On the other hand, if you don’t want to bother with it, then it’s there in digital form and you can buy it and sell it and get liquid in two days. So better liquidity than your T plus three transactional settlement on a security like a stock or a bond. Better liquidity than that. But in a denomination going back to what we talked about earlier, a denomination that you may want to have a part of your cash in, so easy to buy, easy to sell, inexpensive, reliable counterparty Royal Canadian mounted to crown property in Ottawa. And that’s an easy way vault at that time. That’s an easy way to own the asset. Some people would say, No, I’d rather have it in my physical delivery, or can I hold it in an IRA? All of those are options with different cost structures, different limitations. But you wanted something simple. That’s the vault

William Norvell: itself. Yeah, no, that’s great. And anything can go on the web now. And so I assume the app’s going to function like Coinbase or something where you’ve got things going on and you can buy a $500 worth of gold and you have a wallet in the portfolio.

David McAlvany: Yeah. And I mean, what inspired this was having kids who like that elected on gold too. And like, all right. Well, it’s seventeen hundred bucks. Just wait a while, you know, you can save for a while and they always bought silver because it was cheaper. In this case, you can spend $5 if you want to spend five dollars on gold. Essentially, what it has done is it’s democratized gold ownership, and it’s no longer sort of you have to have lots of wealth to own it. Know if you wanted to nominate a part of your savings and something that is helpful on the inflation front serves there as a reserve asset is incredibly liquid. I mean, think about this the whole process of owning gold, having something shipped to you and then you say, Well, I want to sell it. It’s two weeks, three weeks. By the time you ship it back, lock in a price. Have something wired back to you. We’ve basically taken all of the complications of owning metals and eliminated them.

Henry Kaestner: How about the you probably get this a lot and I know so little about the market, as evidenced by, you know, my questions on this podcast and before. But what about the exchange traded funds like GLD or other things where it pros and cons of perfectly adequate?

David McAlvany: I mean, you know, some would say, well, there’s not gold there. That’s not true. I mean, if you want, you can print the bar list and know how many bars are in something like gold or silver. It’s fine. I do think that there may be issues down the line. This is a future tense concern, not a present tense concern. By the way, we own those ETFs in our asset management company as a part of our cash reserve. So I don’t object to them, but I do think that in the future there may be issues with them. They’re buying gold off of an exchange and the initial purchases are made in the form of futures contracts. Those futures contracts then sell within a certain amount of time, and the gold is moved into the GLD custodian accounts. There are circumstances in which there’s no more gold on the exchange to purchase, or there’s 10 people who’ve bought the same ounce of gold sitting on the exchange. And now the question is who gets the one ounce? And so it remains to be seen how GLD insult being. The exchange traded products will operate under difficult market conditions under normal market conditions. They’re just fine on a normal market conditions. They’re just fine, which is why I’m not worried about having them as a part of the position. But I do think that if you’re looking at gold from the standpoint of sort of an enduring asset or a ballast asset within a larger portfolio, maybe you want to take physical delivery of it. Maybe, yeah, I mean, there’s a variety of boxes that you personally may want to check, and in light of those boxes, then you’re going to look at a particular product that fits your needs. And that’s, you know, that’s worthy of conversation. Not not today, but I mean, it’s worthy of thinking through,

William Norvell: gosh, amazing, amazing tour of the world here. I feel like we covered a lot and we just got started. So like, I have 10 other questions on intentional legacy, and we’ll obviously link to the book and then people can read more about that. We’ll obviously link to your podcast if they want more commentary from you on things that you’re seeing in the world. But unfortunately, we have to wrap this episode, and the favorite way we love to do that is to see how God’s word transcends our guest and our listeners. And so we’d love to invite you to share a scripture or story from the Bible that may be coming alive to you right now could be something you read this morning could be something in the season you’ve been meditating on, but we’re just always amazed how God’s word is alive and well and transcending his people daily until it invites you to do that.

David McAlvany: There’s a number of mornings where we’ll get together as a family and I’ll share something from scripture. And honestly, I just open and start reading and then just allow the spirit to kind of guide the conversation in the early chapters of acts. This was from last Friday in the early chapters of acts. You have something that I think is it’s just beautiful. You’ve got a doctor. It’s assumed that Luke wrote both Luke and acts, and it’s a doctor’s observation. Two disciples walk into the temple. I think this is Chapter five, and there’s the man who’s been paralyzed for 40 years and he asks for some money and he’s like silver and gold. I don’t have. But in the name of Jesus Christ, get up and walk. And what I wanted to convey to my. Kids, was that God’s appreciation of time and flexibility in terms of engagement with time is on display here as much as it was at the wedding of Keener as much as it was in the first chapter of Genesis. You know what we understand about Genesis? Clearly, some people think that that’s seven days and other people think that it’s a lot longer period of time. All I know is that God, in his infinite power, has the ability to work with time in ways that are amazing. Wine is an amazing thing. The fermentation process, what goes from grape juice to something that has an expression of terroir and has beautiful nuance. He resolves in a second at the wedding of Cana and Luke. Only Luke, a doctor, would appreciate that this guy who is healed in front of the temple gets up and not only walks but is leaping. Have you guys ever broken an arm or had, you know, something where you weren’t able to use your muscles for a long period of time? This is a guy who for 40 years has never used his legs. He doesn’t know how to walk. He is leaping. He has musculature, which in a second is me. To me, it’s so beautiful because in our lives, we’re concerned about these events or this having to happen or our time friends, or maybe even think about retirement marking things out according to our sense of time. And we forget that God in his sovereignty and in his great love and compassion. Can turn water into wine and compress time in a beautiful way. For just joy and celebration or God, and his compassion can take this person who’s never walked before and say, not only will you walk, but you will leap, you will jump. And you’ll do it with muscles you never had before. And so I just I love the idea that time, you know, legacy is something that’s important to me, and I’m making decisions that maybe have an impact, hopefully have an impact 20 years from now, 100 hundred years from now, 200 years from now. And we have our concept of time. But we do need to keep in mind that kingdom time can be very compressed and being sensitive to the decisions that we make and how they fit into God’s time and God’s plan. You know, I think that’s what I would leave with you is that passage and acts just as a wonder in terms of our concept of what are we working with here?

Henry Kaestner: Amen What is terroir

David McAlvany: here was the unique expression that a particular patch of soil gives the grapes that grow in it. So if you’re on the valley floor in Napa, this is an old river valley. It’s rich soil, and it gives a unique characteristic which is just flat rich. If you go to Howell Mountain or go into the hills 700 to 1000 feet higher, those vines struggle to even survive. They send down their roots hundreds of feet just to get a little bit of water, and the grapes express the ground that it’s grown in. So if you’ve struggled, the grapes express it. If you haven’t had to struggle and it came easy. The fruit expresses it. Terroir is the unique expression of that soil in that particular grape.

Henry Kaestner: I would now use our three times to the rest of the day

William Norvell: and word of the day. Word of the day is there to say, everybody knows if you’ve got the park that’s going to circle back to the chosen somehow. But I will watch this episode. I’m going to go watch this episode again tonight in light of what you just shared because I’d never noticed it, but they do a beautiful job. It’s like season two, episode four or five somewhere in there of the man who Jesus heals to walk and they tell his whole back story. As a child, they tell you, No, it’s fictional at that level, but that scene, when he is healed and he is jumping, and I never thought about it from the way you just said it, though, I was like, Yeah, he should have had to start walking slowly or something and like, No, it was immediate. And that’s how it

David McAlvany: gets to Luke. It’s important to Luke because as a doctor, he’s like, No, no, no, you don’t get this. This doesn’t happen. It just doesn’t happen. You don’t get to leave.

William Norvell: There’s no rehab. It’s just immediate, right? And gosh, you know, if you want to see a visual representation of that, it’s it’s beautiful how they portray it.

David McAlvany: The Chosen.

Henry Kaestner: OK, David, thank you. You’ve blessed us. I’m so grateful that you came up and talked to me at that lunch after the morning episode. I’m a richer man for it. Definitely. Figuratively, maybe literally. You know, you think you made a good case for gold? So just grateful for you as a brother and Christ, somebody who would take time with our audience to share with us all about a whole bunch of different things and just can’t wait to have you back.

David McAlvany: Well, thanks. It’s great to participate in a broader conversation, and I’m excited about what you guys are doing. Thanks for inviting me in.

Rusty Rueff: That’s right, everyone. You’re right where you should be. Here on the Faith Driven Investor podcast. Thanks for joining us once again. Our guest today is Richard Okello. Richard is a co-founder and partner at Sango Capital. Sango is a premier partner for global institutional investors looking for attractive, risk adjusted and impactful returns in Africa. Prior to that, he was a principal at Makena Capital, a large private endowment which invested over $15 billion into over 300 funds. Richard also worked with Ray Dalio as a partner at Bridgewater Associates. That’s a $150 billion global hedge fund. Today, he’s joining us to share his story and his insights about the investment landscape and the rising opportunities in Africa. Let’s join in.

Henry Kaestner: Welcome back to the Faith Driven Investor podcast. This is an episode that I’ve been really looking forward to recording for a long time. God has done something that in my heart, as I looked to steward the capital He has entrusted me with in Africa. Some of you may know part of my story, and that after an entrepreneurial background we started Sovereign’s Capital and we did not start investing in Africa. We invested in the United States and then Southeast Asia. We have an office in Jakarta and through the grace of God, that’s worked out really well. But I guess it was probably three years ago that I went on a trip that was half adventure, half safaris, and then half service with my family and another family. And it had been since 1985, since I’ve been East Africa and Nairobi had completely changed. You know, I was astounded by the extent and the scope of economic progress in that time. And I looked all around me and it was business. And there’s the marketplace, you know, it’s booming. And yes, there are food stalls and some of the things that you might see in developing economies. But there are some big high rises and there are lots of people dressed up as if they just came out of Wall Street. And I was like, oh, my goodness, here’s an economic powerhouse and somehow I’ve missed it. I wonder what the Faith Driven Entrepreneur scene is like here. I wonder what the Faith Driven Investor scene is like here. And so I got a great opportunity to go back a couple of times. We did a couple of Faith Driven Entrepreneur events and then a great trip to Nairobi to talk to local Faith Driven Investor to talk about what they are seeing and what they’re investing in. And that began this quest of mine to figure out how to deploy capital there and how to do it well. And what does it look like to be invited in and who is doing it? Who is doing it? Well, that question for me, that theme, that concept was furthered last year during the Faith Driven Investor conference when we had Finny Kuruvilla talk. And what I thought may have been there’s so many great talks in last year’s conference, but Finny’s talk about Christopher Columbus really, really resonated with me, and I’m going to paraphrase it a bit here. And he said effectively, you got to know that Columbus was an Italian. And when he went to get venture capital for his endeavors, he went first Italy and it didn’t work out. And then he went to Portugal also didn’t work out. He went to Spain. It did. That’s why they speak Spanish and Ecuador and Chile and Peru and all over Latin America. And then he went on to say, Do you know that in Africa, over the next 20 years, there will be more entrance into the job marketplace in sub-Saharan Africa than either India or China? It’s a young population. It is one with a lot of economic vibrancy. And Finny effectively posed this question to us What language are they going to be speaking in Africa? Are they going to be speaking the language of looking at bring God’s glory through all that they do, through the restoration and redemption of the price and services they make through the way that they love their neighbor, are they going to be doing excellence in bearing witness to God, or are they just going to be worshiping Mammon? And that was a great question. I think there’s so much of any type of market development comes from who the investors are. And we’ve seen that over and over again in society. And we’ve seen one Christians step up, as the Moravians did in Suriname and so many others did in Africa in the 1800s. And we have this opportunity to do the same now in Africa. Now, I don’t know what kind of image is conjured up. When I talk about Africa. You might be thinking of a safari trip in the snows of Mount Kilimanjaro. You might be thinking of starving folks in Ethiopia. I don’t know what that looks like, but I’ll tell you that my picture was completely redefined through the trip that I took three years ago. And why I’m really excited about a trip that we are having to Nairobi and to South Africa coming up this fall. But my hope is that during this time, in this next 30 minutes or so with an interview with Richard Okello at Sango Capital, that you will have a more nuanced, a more textured, a more up to date, a more real vision of Africa and its potential and its impact and potential for societal change and what that means to you as an investor. So without further ado, I want to welcome Richard Okello to the podcast. Richard’s become our friend and somebody who’s been a great encouragement to me as I’ve been able to track with Sango Capital now. Over more than a year. Richard, thank you for being with us.

Richard Okello: Thank you for having me. Very excited to be here.

Henry Kaestner: It’s awesome to have you on the program. It’s awesome to be a financial partner with you, which I should probably mention in full disclosure, our family office has invested in Richard, and you need to know that. But we will be featuring many as we have before. We’ll be featuring many other guests. And not all of them will be ones that we invest in, but all of them will be ones. They’ll give you a sense as to what’s going on and what God is doing in the marketplace there. Richard, as we get started, can you tell us a bit about your background, who you are, where you come from? One of the things, of course, that’s made such an impact on me is to see this heart that you have for Africa and then also some very real investment experience information in the United States as well. Bring us through who you are and how you’ve gotten to where you are now.

Richard Okello: Thank you, Henry. So my story could be very long and I get very passionate about it. But if I was to summarize it in four words, I would say it is the providence of God, literally. It is the providence of God. And so I’m going, run it through some of the snippets and you start to draw a thread. So I grew up in Uganda at a very interesting time in Uganda’s history. I was born halfway through Idi Amin’s reign. Idi Amin was sort of the worst president that Uganda had. Most people would sort of agree with that. Most people know who he was. And then I lived through the early parts of seeing the country transition to some of its best times. I went to school there. I was fortunate to get a scholarship to complete high school in Wales, in the U.K. and then I got another scholarship to go to Swarthmore College in the US. That scholarship happened at the time. I thought it was very accidental, but as you’ll see, it wasn’t because the then dean of admissions of Swarthmore just so happened to visit Wales that year. He has just so happened to come to that school for the first time. I just so happened to run into him in the hallways thinking he was lost. We had a great conversation and he said to me, You got to apply to Swarthmore. And I applied Swarthmore, I got in, could not get enough financial aid, could not afford to go. That was just about to decide to go elsewhere. And then I got a call from Swarthmore saying, hey, we’re sorry to let you know that Dean of admissions had a heart attack and passed away while he was hiking. This was a 40 some old years old guy. Right? So now I thought to myself, well, now I got to go to Swarthmore. I got to figure out a way to go Swarthmore. So anyway, eventually made it to Swarthmore, completed Swarthmore in three years, and the year that I graduated was the first year that Bridgewater Associates decided to recruit from Swarthmore in five years. Okay, so I interviewed Bridgewater. Don’t get an offer. Two days before I’m due to take another offer. Bridgewater calls me and says, Hey, we’d like you to come in, meet the team, want to make an offer? And I almost say no. Right. Because it’s, you know, two days before my other offer. Right. So anyway, get down to Bridgewater to meet Ray Dalio for the first time. What a phenomenal meeting. Get sold on Bridgewater, decide to join. And then of course, part of the rest of that is history. You know, the farm grows incredibly quickly, doubled every year that I was there. I was fortunate enough to become a partner there five years in. And as you can see at this point, I’ve used the term fortunate enough, fortunate enough enough that you start to see that this is really not just being fortunate. Right? This is about the guided providence of God at each time along the way. So anyways, so fast forward nine years at Bridgewater went to work for a new farm because at the time I felt a nudge that that was the time to leave and go over from the public side of investing to the private side of investing. So Bridgewater was all public markets, equities, bonds, currencies, etc. went over to Makena Capital, which was just getting started. Lots of people at Bridgewater thought that was crazy to do, did not make sense to them. Lots of things we do well, guided by the providence of God actually do seem crazy at the inception. Right. But we went anyway and Makena was a great story. Five and a half years, that tremendous experience investing in private equity, real estate, other just other investments. And that is where the seed of Sango capital, which is my current venture, started, we started investing in Africa. Well, we’re there and eventually felt the nudge again to leave Makena and come set up Sango. So that was about 8 to 9 years ago. And here we are. We’ve been investing here for quite a while now. We’re up to about half a billion dollars in assets. We’ve attracted some really interesting investors who who had never been to Africa physically or invested in Africa. And again, to sum that up, that is in four words the providence of God.

Henry Kaestner: So when you talk about investing in Africa, you are in Africa now. So at some point in time you said, in order for me to be a really good investor in Africa, of course I need to be there and on the ground. And so you did not move back to Uganda. You’re in South Africa, correct?

Richard Okello: Yeah.

Henry Kaestner: Tell us about that transition. I’m just you’re at the top of your game and you’re Wall Street. And for those of you don’t know Ray Dalio, Ray Dalio is like the investment guru, for lack of a better word, been remarkably successful. Bridgewater one of the most successful firms in the history of Wall Street. And you’re there during those formative days, and there must have been some real temptations or draws to keep you there when you are at a successful financial firm like that and you’re in on the Wall Street crowd, and there is you have the house in the Hamptons, you have the ski house in southern Vermont. And the trappings there are pretty significant. It’s not often that somebody will break out of that environment and then go and set up shop for a new fund in Africa. Tell us about what that look like.

Richard Okello: So I think it was it could have been a lot tougher, frankly. And if I hadn’t had the history that I had, if I had just sort of grown up in a fairly well-to-do family and let’s say my parents had paid for me to go to school in the US, I’d gone into Bridgewater. I think I might have relied a lot more on the trappings of the position around me than I did on oh what did God think about this. What was the nudge? What was the calling? Why was I here? What was I doing right? And I think often times we struggle with those two pieces, right? So, you know, we pray and we ask God to help us do certain things and we try to walk by faith. And He puts us in this incredibly privileged position. And it is very, very difficult to not forget it is easy to forget once you’re in those positions, how you got there, why you’re there and not appreciate the fact that you’re only there for a season, you’re there to steward set in things, to accomplish certain things. And only in looking back do you realize that if you keep with those seasons, you will do some phenomenal things. And if you overstay your season in a particular places, it’s not like you’ll kind of fall off a cliff or anything, but you’ll miss out on a bunch of really cool stuff. And when I start to talk about some of the things we’re doing in Africa, I mean, they are phenomenal things. You know, I’ve gone from trying to be a good investor, trying to run a good business and be respected in a certain space to affecting millions of people. With our investments, literally seeing millions of people’s lives changed. I’ll talk about examples. So I think what helped me during those times Henry, I look back on the journey and I realized that this journey had very little to do with me and my abilities and everything to do with being guided and being nudged in a particular direction. So when the nudge came. I realized it was time to leave. And so then putting the trappings within that context made it easier than it otherwise would have been, I think, to walk away. Just to give you a practical sense of that. I mean, when I decided to go out for my Makena, I had a 15 minute conversation with Ray Dalio. I basically called him and I said, Hey, I want to talk about something. And Ray Dalio and I, which was fortunate for me, had built both a professional relationship and a personal relationship over time. And so when I sat down with him, I said, I have this great opportunity to be one of a handful of people that have worked here and can go work for a large global endowment, investing lots of money in all kinds of things, getting great experience. His first reaction was not a typical hedge fund owner, a typical hedge fund, which kind of gets called security. How can you do this to us? We did all these things for you that sort of need the office, right? He said to me, let’s talk about this opportunity. What do you like about it do you know these people? Do you trust them? What do you want to do? And then he said, Look, if I was your age and this came along, I would absolutely do it. Now, the question is, how are we going to transition out? You’re the first person in your position that is leaving. That’s not being fired. I’m not retiring. And we essentially had a handshake because I said to him, I will leave when we’re all good here. That’s basically the deal. Like nothing written on. I’ll just leave when everyone’s happy. Right? And that’s what I did. And to this day, we’ve maintained that personal relationship. But I think that all comes back to, again, in my view, the providence of God, the hand of God, the unseen hand of God, guiding, helping, you know, nudging, taking you out of harm’s way. Right? Sending people your way that are helpful at the right time and so on.

Henry Kaestner: So you talk about the opportunity to go and do a bunch of cool things, and I have a sense of that because I’ve seen some of that on the ground and I’m encouraged by it. Help us understand what some of those cool things have been since you’ve returned to Africa. What are the projects that you’re involved in? And see if you can just kind of paint this picture at the outset. In the introduction, I mentioned the fact that there’s this all this opportunity. Help listeners to this podcast, understand what you saw as you move back to Africa and what you continue to see.

Richard Okello: Okay. So having grown up in Africa, I think my lens, I went back every single year since I had left to go to high school. Every single year I went back for good chunks of time to visit family and so on. So I was able to maintain a thread running thread of observation, you know, not with standing the fact that I was mostly out of the country most of the time. And I think the first thing that I noted was that it seemed to me that for the first time in Africa’s history, the people that stood to gain more from instability than what they lost had diminished relative to those who stood to lose more from instability. So what had happened? People’s incomes had risen. People have gone from you know, when I grew up in Uganda, when I was five or six or seven. My primary focus was safety. It’s Idi Amin, it’s volatile. It’s chaotic. It’s all about safety. Forget electricity. No one is talking about having your vitamins. Right. Like that’s just a non-issue, right? You’re just trying to be safe and alive. And I started to realize that that had changed as people’s incomes rose. You know, they sent their kids to better schools. They wanted to keep their kids in those schools. They started to become more focused on their health care and on the things that lots of people in this call now focus on started to become much more important. And for those things to continue, stability was very important. And that became a broad based theme across most countries that I went to. And that, to me, was the first real sign that the tide had turned permanently in this geography. Right. Like once that happens and people take that into their own hands, then they’ll do they’ll do everything to protect that situation. So that was the first observation. I think the second observation was that I was mostly operating in a world where private investments were all about squeezing out the last bit of efficiency.

Henry Kaestner: Richard, that’s fascinating. When you talk about this framework and I just hope that you can repeat it, because I think that there’s something really there that is going to help a lot of people to think about emerging markets, because there is a group of people that want things to stay the same. And then there’s a group of people that want to see change.

Richard Okello: Yes.

Henry Kaestner: And what you want to do as an investor in any type of emerging market and not all emerging markets are create equally. But you want to go in and you want to look for certain things. And what you had said was, I saw where for the first time the number of people and the power of people that wanted to see something new and see new opportunity eclipsed that of those who had a vested interest in seeing things stay the same.

Richard Okello: Yes.

Henry Kaestner: When you saw that dynamic shift, you said that’s where I need to enter. And so if we’re thinking about things right now and we think about emerging markets, and maybe there are 100 countries or 150 countries that might make that up. That’s a great frame. I’m thinking about investing in Venezuela. Okay. Are there more people there with power that have a vested interest in keeping things the same?

Richard Okello: Absolutely.

Henry Kaestner: Or are there more people now that are in the marketplace have a vested interest in seeing progression? That’s really interesting. Okay. Continue on, please.

Richard Okello: So, look, that was the first thing I observed. The second was that the lens that I had as an African on opportunity and risk needed to be adjusted. And that’s me as an African who grew up there, who has family. Who has a network there who has invested personally there. Right. So never mind. Listeners, on this podcast, who isn’t in African? Never invested there, never been. And so the lens really has to shift. How did it have to shift? I had grown up primarily investing in developed markets to a lesser extent emerging markets in Asia, but, you know, developed markets in much, much markets in Asia. And those markets were larger, more efficient, much more organized. And the types of opportunities and the types of risks you have in those markets are very different. So the types of opportunities you have are can you find someone who has a highly specialized skill, who can take a business and make him go a certain direction to squeeze out certain efficiencies? And maybe that gets you a great return and has some impact on the people that that business such. And if. I was to take that mindset into Africa. It would be a disaster because where Africa was was not there, where Africa was, was. Whereas a middle market business, for example, in the US might be growing at eight or ten or 12% a year. Businesses in Africa are generally growing at 20, 30, 40, 50, 100% a year. And when a business is growing that quickly, first of all, it’s generally a simple business. There is demand. You know, I remember going to Ethiopia and there was a water beverage business selling bottled water, and there are trucks going out the back and the guy was rationing the bottled water. You know, people would come up and he’d say, I’ll give you ten cartons or I’ll give you three. That’s right. I’ll give you 15 30. This is just water in a plastic bottle. Right. And it’s not like something you and I don’t think about when we go to a grocery store. Right. So those types of businesses, what they needed was capital, good governance. Right. So it’s probably run by someone and his wife or his cousin, you know, good governance, board structure and so on. Probably help expanding a factory or help defining the route to market or trying to get them out of things they shouldn’t be doing right that they’ve had to do in order to get off the ground and so on. And the impact on returns that you could generate and the impact on the people that it touched was just unprecedented. But I hadn’t seen anything like this, meaning you could go into markets and deliver very interesting returns and you could impact millions of people at the same time without a tradeoff between the two. So that to me was particularly attractive because from where I sat, the trade off was acute and you generated lots of returns and it wasn’t clear if you had any positive impact on anyone. Right, or you had impact, but it was basically a charitable phenomenon. Right? Right. I think that was the second thing that was really attractive. I think the third thing was realizing just how much skill had gone back into Africa. So as I was growing up, lots of people like me would have left, gone to school abroad, walked abroad and so on. And as global crisis started to happen. So, for example, when the global financial crisis happened, lots of people moved back, people lost their jobs where they were in New York. They moved back and then they realized, gosh, the opportunity is actually quite significant. So the aggregation of skill sets had risen much faster than I anticipated, again, as an African. Never mind, if I wasn’t in African. Right? They pull those things together and you’ve got a shifting mindset, you’ve got a differentiated opportunity set and you’ve got skillsets that are on the ground. And you can do that in a way that delivers returns that has impact, I don’t know where else in the world at scale where you can do that. So that for me was the attractive point.

Henry Kaestner: You mentioned something in there that’s incredibly important and that’s governance. And governance is going to be a novel concept in some of the markets in which you’ve invested. Talk us through a little bit about that because I think it’s probably twofold, right? It’s setting up the right governance on the ground and then having some sort of rule of law and court system that can uphold that type of governance. Where are you seeing that happen and where are you finding the type of countries that you have confidence in investing less? There be a problem and there’s some amount of rule of law there on force, the contracts that you put in place.

Richard Okello: So in Africa, you essentially have three legal systems. There’s an English or Anglophone legal system that was driven by the English colonialists wherever they were. There’s a French system written by the French colonialists, and then there’s a Portuguese system, legal system. What we found in general is that the strength of those systems goes English, French, Portuguese. That’s the starting point. So if you are operating in a country that had a huge English influence, colonial, otherwise the law is generally strong, pretty strong. It is very commercial in intent, it is less personable. It’s just, you know, a deal is a deal and it’s kind of that’s the law. Yes. People want to connect personally, but the law is the anchor. And the law has been well-tested for decades. Yes. So people have started. Businesses lost them, bought, sold, sued the government, the government sued the people. All of that’s just established. So you’re not establishing precedence at all. All you’re doing is stepping into an environment where people know and I used to what kind of what you’re trying to do right now. There’s a handful of countries that, you know, if you’re in West Africa, for example, in Ghana and Nigeria, that that is the case. You know, if you’re in southern Africa, in Zambia, that’s the case in South Africa. Obviously, that’s the case in East Africa. In Kenya, that’s generally the case. So there is a bunch of countries where that’s the case. I think the French law is I would put, you know, not far off from the British law in that sense, which is where you’ve had a long history of the French. So Francophone, West Africa, Cote d’Ivoire, Senegal, pretty well established law, well established law firms, judges, the court system, the precedents of legal interpretation and so on and so forth. I think the Portuguese is generally where we would have struggled and we’ve generally stayed away from those countries. Angola is still challenging. Mozambique is still challenging. You could do a lot of really good things to impact people there, but the legal system is quite challenging and so you have to tread carefully. So that’s the legal system. But I think the notion of governance to me is the legal system is important within that context. But what’s much more important is the who do you do business with? Because as we’ve seen in many countries, whether investing in Brazil or in Russia and China, people can figure out ways to get you tied up in the legal system. So the legal system by itself is not sufficient. I mean, you know, the places in the U.S. where you do business and you might just be stuck in court for two years to give up the legal system doesn’t break, but you break before it breaks, right? Mm hmm. And what’s important I find in Africa, but in generally emerging markets, is really understanding your counterpart. Are you doing business with people who are just honest, honest before you ever met them? They have a track record of being honest. They pursue honesty. Honesty is part of who they are viewed as. They will operate with you in a transparent fashion even after you’re gone.

Henry Kaestner: That that’s I mean, everybody can gather that, of course, you know, can you trust the person or not? But you have to be able to diligence that. What does that look like for you when you’re investing? You’ve got an entrepreneur, a business leader. It looks, you know, a great opportunity and yet you’ve got to trust them. How do you figure out whether it’s somebody you can trust?

Richard Okello: It is lots of hours talking to people in your network locally. It’s lots of hours talking to people in person about someone else, watching their body language when they respond. There are certain countries, for example, where people just don’t like to talk about bad things culturally. And so if you called them on a Zoom call, you might not unless you can really read their body language well in the zoom call, you might not get the sense that you might think what they’re saying is actually true, which is true. But they’re just kind of they’re just nervous about the situation now with some other person. And so I think we do a lot of kind of 360 degree cross-referencing. You know, it’s not just talking to the people you’re trying to do business with. It’s talking to their competitors. It’s talking to people they’ve done business with in the regulatory authorities, in government. It’s talking to lawyers who do business in those countries. It’s talking to auditors and accountants. But it’s also I mean, we’ve done things like several years ago with diligence to fund that had a lot of self-professed Christians in it. So I flew out to this country and I went to two of their churches. Unannounced. I just attended the church and asked about them, you know this person, right? Yeah. And they were shocked that I was there. I mean, like they figured out I was in the church right when I was in the church, like all of a sudden. So you can’t really defend against the persons that are attending a test service. There’s nothing wrong with that. But I got a much better sense talking to different people, just getting a sense for who the person is than I would have, just getting someone drawing a kind of back office due diligence operation in the background. And so that really needs you to either be local or have a very strong, trusted local partner. There’s just no way around that. Yeah.

Henry Kaestner: You know, I’ve heard of a new initiative that’s going on in Kenya that’s really encouraging, I think. And it’s effectively a group of business leaders and political leaders that are all part of a group where somebody is thinking about doing a deal with somebody and they email the group with the person’s name and it comes back red light, yellow light, green light, and that’s it. So you don’t have to go ahead. And it’s anonymous. Yeah. And it’s done through a central administrator. So you go ahead and said, you know, this is coming in from one of our members, John Jones. Red light, yellow light, green light. They answer red light, yellow green light goes back to John Jones. And then he keeps that confidential. And then he says, okay, well, again, 87% green, this percent yellow, this percent red. Couple of people said volunteer. I’ve got some more color on this. You can give me a call. And I thought that was really an interesting thing. You know, I’ve been fascinated for years about microfinance and the power of social collateral that results in much higher repayment rates than you might expect 98, 99% all throughout Africa through microfinance. And it’s the power of social collateral and the power of relationship and and wanting to avoid shame. It seems that that might even apply in the business world as well. Do you see that type of system as being something that gives you promise and hope amidst this reputation of some level of corruption?

Richard Okello: So I think that. Anything like that is an improvement. But there is a challenge which is a very nuanced challenge. The challenge is the following. Most countries that you would want to do business in in Africa. Are very siloed into either tribal groupings or set in groupings of clusters. So, for example, if you in Nigeria, you are Yoruba, you are Igbo, you are this, you are that, and the trust circles within those units are very strong. and the understanding of what someone says within that unit and the interpretation of it is not. Linear English interpretation, right? It is a cultural context around them. And if you’re in Nairobi, you’ve got different clusters. You’ve got, for example, within the Indian business community, there are several clusters. And the way in which you would interpret what they say about someone in that community is not the same. And so you obviously haven’t progressed to a point where that interpretation kind of through AI makes sense, right? And so it is critically important to be able to say, okay, when, when someone in Ghana hesitates to talk about something, something bad is going on because culturally that’s how people are trained. They just hesitate to talk about bad things. They will delay and they will soften the blow and all that. Right. But in Nigeria, they will tell you that to your face immediately. Right. Right next door. And so so I think that’s important. Now, I do think, though, that if you are doing you I mean, we’ve we’ve done this now for close to the decade. We haven’t had problems like this. Now, portfolio companies, we have tons. We have over 100 portfolio companies. We invest through funds and we invest directly. So it’s not just because we have a direct investment, a portfolio company, it’s we invest through funds who are investing in companies as well. Right. And so how is it that that’s the case? I think it’s because we spend a tremendous amount of time making sure that the people we partner with and the people they partner with are high integrity people. And if you do that, I think you make a lot of headway.

Henry Kaestner: Okay. I want to ask you another question that I think a lot of people are wondering in the back of their mind and that is currency. And so I get the macro picture about why to invest in Africa. I understand how to go about doing it. I understand more about governance and rule of law, how you go about trusting, establishing trust. What does it look like if you make an investment and you’ve got currency devaluation? How do you think about that? How do your Western investors think about that?

Richard Okello: First of all, I think our Western investors don’t really have clarity on that necessarily before we have the conversation, because most private equity investors don’t have clarity on that, going to buy a good business with a good management team and growth sales and hope the team kind of fixes the currency problem if it does occur. What we say to investors is we’re in an emerging market, sometimes frontier markets. You should expect that they will be volatility, currency or otherwise. Like the very notion that an economy grows at ten or 16% a year implies volatility has to, right. Like, you know, other economies are growing up 1% a year. Right. So what you have to do is you have to expect it. You have to do your best to underwrite it into what you’re doing. You have to try to buy businesses that are resilient to it and build portfolios that are resilient to it. So we walk in eyes wide open and we say we just assume they will be currency depreciation across all the countries we operated, all currency volatility. When we underwrite to fund team or deal on investment, we basically say, okay, this is a South African investment. What’s going on in South Africa’s currency the last thirty years? Here is what? What what’s happening? What are the pressures now? So having a macro view of the country you are in is actually much more important than it is in a developed market. In a developed market, you have a macro ecosystem that’s fairly established that does some of that work for emerging markets. You do have to have a macro view that says, I want to be in South Africa. I’ve thought about that, and then I’m going to go look for businesses of funds that operate that. Okay. What we’ve seen is if you take, for example, our first fund, we started investing that fund at the beginning of what was the third most aggressive period of US dollar strength in the last 50 years. And my context on this is, you know, when I was at Makena, I ran a big currency book for Makena. So I’ve been in and around currencies like a good chunk of my life. Bridgewater’s kind and so I’m so we watched our portfolio respond to this theoretical construct that if you went in expecting volatility, you underwrote it and you built a portfolio that had some resilience that you’re going to be okay, and it has turned out okay. So what’s happened is the companies that are growing at 40% a year, probably in local currency, probably ended up growing at 25% a year because 15% was currency taken out. Well, if they grow at 25% a year for five or six years, they’ll give you a 3 – 3.5 x on just growth alone without any other bells and whistles. Right. And so what that’s done for us and what I would say to the investors that are on the call, let’s say, think about emerging markets in general and think about the currency question is buy growth because growth will make up for a lot of errors, currency or otherwise. My really good management teams that have lived through real challenges because they know how to you know, if you talk to companies that were operating during the Arab Spring in Egypt, they figured out how to pay their people when it was unsafe, how to manage around currency situations, how to manage their safety issues. So all day long, we want to buck people like that because they will improvise where no solution exists ahead of time. And I think if you do that and you build a diversified portfolio, which is a side piece of this, then you’re okay.

Henry Kaestner: I also think it’s worth mentioning that even in a country like South Africa, you look at the Rand, it’s been relatively flat. There’s been some volatility against the US dollar, but we’re not talking about massive depreciation. So it’s a very, very rare event when you see something in Zimbabwe or Venezuela. So I want to make sure that we don’t overstate that, and I think you’ve answered it really well. I want to shift back to the fund a little bit, and I want to ask well, I really would love to get a story about a company that you’ve invested in that you’re most excited about. But before we do that, I actually want to shift into the theme. Of course, that’s always pervasive in our segments, which is faith. And you talked a bit about the beginning about how faith and God’s plan have made such an impact in your life. But I know about your partner. I know about how you think about things, share how your faith impacts how you invest.

Richard Okello: So I think I mean, we were believers in Jesus before wherever business partners or frankly, employees, right? So we were fortunate in that sense that we did not have to fix a bunch of errors before that happened. So some people do the second thing and then they got to do the first thing and they have to pull back and kind of fix a bunch of errors. So we’re fortunate in that regard. I think the way in which we view this is we feel called to do what we’ve been called to do. Which is a to be really good stewards of the capital that’s been entrusted to us by investors who are most of the time never been to this geography. And are are called, that sort of the respect, the walk, the focus that it requires. And I can come back to that. But we also feel that we have been called to steward other things that are much softer. So we’re both family people. I’ve got wife of 19 years, two boys. My partner’s got a wife for kind of similar 20 years, 21 years now with three kids. So what we do as husbands and what we do as fathers is going to be far more important to what we do as investors. Now, don’t get me wrong, we have to do a phenomenal job as investors, but the bar is really, really high on the other stuff, right? Because yeah, when our kids go out in the world as, you know, like we hope we’ve done a good job when they go out in the world because then they can impact other people in a way that perhaps that we can’t. We’re also stewards of our employees. Right. Their families, how they see us operate, how they see God infused in our business.

Henry Kaestner: So give a little more color. This to your partner was a pastor, correct?

Richard Okello: He is an elder discharged. You know, he preaches a sermon, I’d say probably once or twice a month. And so we how God affects us can’t just be a thing we talk about or a label. Right. Because there’s so many of those labels, the things that people talk about that lead people in the wrong direction. I think people need to see how we operate, when we have to let someone go.

Henry Kaestner: Mm hmm.

Richard Okello: How we operate in crisis. When we got into COVID, how did we operate in COVID? So if we believe in this God that’s supposed to be in charge of this situation that when no one seems to know what’s going on, are we all panicked and have we lost track of what’s going on? In which case then how we different than someone who doesn’t? So I think like taking the notion of stewardship in a 360 degree fashion, you know, the people we partner with, the fund managers we partner with, the companies we partner with, how we view the way in which those funds or companies affect their communities. Right. All of that comes into this kind of single time of stewardship so I think to me, our work, what we try to do is as much as possible. Stay as close to God as we can. Without which we couldn’t possibly be half decent stewards of all this stuff. And we feel like if we do that and we can be I won’t even say phenomenal stewards, but just half decent stewards guided by him, then I think we’ll be okay. So that’s how we think about that.

Henry Kaestner: Okay, so that’s the bigger picture and I love it first. I mean, is the ordinaces is so important Matthew 6: 33 Aim first for the Kingdom of God, righteousness and all these other things will be given to you as well. And so you’re talking about ordinance, let’s make sure we’ve got the right relationship with God. Let’s make sure we focus on our family, provide the right culture for our employees. And so then that then continues. And what I’d love for you to do is, is we talk about an individual investment.

Richard Okello: Yeah.

Henry Kaestner: How does that faith actually manifest itself? Now, clearly, your faith provides a foundation that allows for all these things to happen. It allows for a culture of excellence within your staff and your analyst.

Richard Okello: Yep.

Henry Kaestner: It provides for a culture of excellence in how you think about diligence and discovery and showing up at people’s churches and understand more about their character. What does it look like when it actually meets the ground in an investment? Maybe you’ve got a story or something like that. You can say, okay, this company did this and this is how our faith helped us make the decision or how we’ve managed the investment. Give us an example, please.

Richard Okello: Okay. So I’ll give an example in the grocery retail space. So the first recorded organized grocery business in the US was, I think around 1915, a business called Piggly Wiggly in Tennessee, a tiny little business. At that point, the population of the US, about 100 million people, the largest US city, I think New York City was 5 million people. So let’s fast forward to 2015. 1915, 200 years later. Okay. Hmm. Let’s zoom in on Nigeria. 200 million people, twice the population of the US at the time. Okay. Largest city in Nigeria, Lagos. 20 million people, give or take, four times the size of the largest city in the US. Largest grocery store at the time in 2015. 15 stores. Wow. 15 stores. One five. So like anyone on this call that’s in a developed market or, you know, bigger country, Brazil, Brazil in 2015, the largest store was 2200 stores. Brazil has 200 millions people just like Nigeria. So therein lay the opportunity and the challenge because the behavior of the people in this let say in Brazil as in Nigeria is not that different. They go to work they work hard and they have less and less time. They want to be able to go to grocery store that’s organized, get what they want, find it at a good price, know that it’s fresh and reliable, go home to their family. It’s very simple request. It’s not a very complicated request. Okay. So so in 2015, after doing a bunch of work, we decided that we wanted to do more in this sector. And we found an entrepreneur that had built a successful fast food business and who was building a closet grocery business, closet imports, because people are coming into this fast food restaurants at lunch time buying their food, their fast food, and then basically asking for milk, tomatoes. And they say you use this stuff anyway to do our food. Why don’t you just sell it to us besides the refrigerator? And so he said to us, I got to tell you guys, this is a much bigger opportunity than the fast food. We were attracted to him because of the fast food. They said to us, no, forget the fast food restaurant. The grocery business is billions of dollars, lots of opportunity unmet. So, you know, we’re skeptical. So for a period of two years, starting from about 2013 towards 2015, we spent time with this guy. Getting to know him, visiting his businesses, taking him to Kenya to show him how this is done in Kenya, to Uganda on our dime is like we say, Hey, why don’t you come spend the weekend with us, we’ll show you around, whatever. Bring him to South Africa where you have proper institutionalized grocery, you know, thousands and thousands of stores, people running back whole, you know, super efficient. Right. And kind of open his eyes, get to know him and so on. Now, eventually, we get to a point where he says, hey, we need to do something enough talking already. Let’s do something. We say to him, okay, now this is a startup, and because there’s a startup, we’ve got to get some sort of security to start up in Nigeria, essentially. Plus, they’re going to move your crowd into a shop but it’s a start up. So we say to him, we want to take a backing equity position in your fast food business. So if this thing doesn’t pan out, we got to have some protection. That’s the first real test of someone’s conviction and their integrity. All of that in real time. Right. So he says, okay, I’ll give you a backing position that will make you a 25% IRR in my existing business with 35 stores if this thing doesn’t pan out. Then we get into the work. All the work you have to do around the new investments, all the legals and all the groundwork, all the market research and all the rest of it. We finally get to a position of decision and couple of things I think happened. One is we got to know that he I wouldn’t describe him as a believer in Jesus necessarily, but he was a super high integrity person, much more high integrity and lots of believers actually that we knew in this space. But he was also a very tough he’s had to be a tough person to build a business that he has, and you need someone like that in that industry. So we had to decide could we deal with his toughness? Knowing his integrity or not. Okay. So some of that for us really comes to, you know, we go back to our closets and we consult and we say, like, how do I feel about this? Do I have a nudge that’s positive or negative? We’ve done all the work. The memo says we should do it. The teams agree we should do it. The demand is that people want it, people already buying stuff. That’s all that now. But should we do it? This is the right thing. Okay, we both come out, Charles and I like, okay.

Henry Kaestner: When you say, hold on a second, when you say you go to your closet. Is that code for prayer?

Richard Okello: So I wouldn’t call it code for prayer, but we pray and then we say, How do we feel about this? Is there a hesitancy? It’s not like you hear a loud voice from somewhere that says, I absolutely do it right. This is not right. That’s not how it works. But do we have a hesitancy? Do we have a check? Because in this particular case, we have a very strong personality. We’re going to partner with one of the 5050 partners in a country that’s not South Africa. We are not there physically every day. Should we do it? So at that point, we are always well-advised to check here and say, how do we feel about this? What’s the gut? What’s the nudge? What’s the leading What we feel about it. We pray. What do we feel what do we feel back? And that’s important. Now, that doesn’t happen on every single transaction because asset and transaction where you have that sense right through the process as you go through it and you’re fine and you just run through the person, you’re done. In this case where, you know, I’m being annoying. And I remember one weekend having a conversation with Charles where we needed to make the call by Monday, and we’re just like, Let’s sleep on it. Let’s see how we feel, let’s pray, let’s see how we feel. On Monday, all the backing information’s there. Everything says we should do it, but let’s just make sure. Okay, that was 2015. We are in the process of selling that business now. It’ll be about somewhere between 17 and 20 stores this year. Mm hmm. What has happened in Nigeria during that time frame? The currency has lost. 60% of its value. There have been two elections. There’s been one recession. That entire time. The business has been open. The stores have been open. They have put stuff on the shelves. You know, when COVID happened and the governors of the different states wanted to start shutting down public congregation points, the public got out to the store and they say to the governors, you cannot shut this store down. People just stood outside there like you have to keep it open. It is our lifeline right now commercially. We think this is a business that, based on the bids we’re getting now, would make us five times money. Not withstanding all that noise in the currency. And that is another right now. But it’s also a business that if you think carefully about what happens when people organize groceries retail, it starts to change their behavior. They can get home to their kids and help them with homework because they don’t have to be stuck in traffic trying to go to market 2 hours away to get food just to get basic right.

Henry Kaestner: So it’s an extension of what you see in agricultural communities where we’re having to walk for an hour or two to get water. It’s a challenge in the urban equivalent of that is having to go far to get food.

Richard Okello: To get food. And most people. Africa is urbanizing faster than any other geography today in the world and will be for the next 10 years. Right. So this problem and this opportunity will get more and more acute. So that’s, I think, one example where how our faith weaves into business the type of what we do, a simple sector that people understand all the way through to exit and commercial return and also just sheer impact. You know, it employs hundreds of people. Right. It’s a business that I’ve just done a five year plan to go from their current size to about 50 stores. You know, this could be 200 stores. Right? So hopefully that gives your listeners a sense for business where you can kind of do both and, you know, kind of deep in it.

Henry Kaestner: That very good. We’d like to end every podcast where the question we asked of all our guests, which is What are you hearing from God through His Word? And maybe it’s something in the Bible that you read this morning that struck you, maybe something last week, maybe something in the season, but what’s something that you’re learning from his word?

Richard Okello: So I think for me right now, I would go back to John 15, where it says Abide in me and I in you know, you know, you read that portion in the Bible and it’s such a simple thing, right? It’s like not even ten once. Such a simple thing. So incredibly difficult to abide continuously right and I think what I’m realizing as I spend time around this, listen to other people talk about this and so on, is that a lot of the times we have taken this notion of God and made it this big thing God’s out here, this big guy, you call him when you’ve got problems, you know, you treat him in a certain way. You kind of, you know, like, hey, just stay over there. Like when I need you, like, come help me. You’re kind of like this. You’re my problem. concierge, right? Whereas what that really speaks to, I think, is, is someone that’s right here. It’s almost like you’ve got a parrot, like a pet parrot that sits right here, that talks to you all the time, but listens to you all the time and you talk about stuff. So, you know, I got up this morning really tired, decided to go for a swim on the drive down to the pool. I started I was like, I’m really tired. I have this FDE thing I got to do later on today. I honestly don’t know what you do to say, right? I don’t know what you want me to say, but I need you to help me. I don’t know if should. I swim. I don’t know. I feel like I need to swim. Like that’s the conversation in the car, right? And it’s amazing to me. I’m discovering I’ve just started to discover how powerful and how different of a trajectory you can have when you operate that way, how your life just starts to change, how things change in real time. Right? So that for me is that’s my current kind of focal point.

Henry Kaestner: So you’re suggesting that you can abide in God while even under the water.

Richard Okello: You can abide in God on this call. Listening to this call, your kid runs in the room, throw something at the screen, you know, on and on and on. And he actually wants that. Yeah, that’s the key, right? We’re not forcing it. He actually wants that. We most of the time are keeping him away from that and ourselves from that, which is like what we should not be doing. Right.

Henry Kaestner: Amen. Amen. That’s an awesome word to end on. I’m just very, very grateful for you, Richard. Thank you for your friendship, your partnership in the movement. May God bless you and your fund in your investments and very much looking forward to the next time. Thank you.

Richard Okello: Henry, thank you very much for having me. It’s been fun. And look forward for the conference.

John Coleman: Welcome to the Faith Driven Investor podcast. This is John Coleman back with you today. And I’m here with my partner Luke Roush, who appears to be in some sort of fancy hotel.

Luke Roush: Live from Chattanooga, Tennessee. Kinley hotel downtown across the street from Chattanooga. Choo choo. Big times.

John Coleman: How is the Kinley Hotel? It’s like a murder hotel, right, Luke? Isn’t it famous for some sort of high profile murder?

Luke Roush: That’s unclear, but there is a speakeasy in the lobby, which I’ve been told by others that it’s quite a good place to imbibe.

John Coleman: Fantastic. And what are you in Chattanooga for, Luke today? Just leisure, or you […] ?

Luke Roush: Yeah, we got a little you know, we like to periodically introduce our investors to our CEOs and we’re going to have opportunity to do that with couple of companies tomorrow here in Chattanooga and then also over in Huntsville. So big time.

John Coleman: Well, that’s fantastic. And I know we’re both really excited about today’s podcast because we’re privilege to welcome folks that we’ve known for a while, folks that a lot of people have benefited from their wisdom. John and Ash Marsh are here with us, and it’s difficult to really encapsulate who these two are because they’re entrepreneurs, they’re real estate developers, they’re creatives, they’re counselors. They generate a lot of witty repartee. And so I feel like this will be an edifying and wide ranging discussion for folks today. So, John and Ash, thanks so much for joining us.

John Marsh: It’s great to be here. What a great group of guys you are. And thank you for all the work the FDI is doing in the world. And FDE, you are a light in its penetrating dark corners as you share the powerful things you do. So thank you all for the work you’re doing is making a difference.

John Coleman: Well, thank you all for the work you’re doing, which we’re going to hear a lot more about. You know, just to get us started, some folks will be familiar with you, John and Ash, because you’ve been on the FDE podcast before, you know, some folks in the community. But just for those of you less familiar. Give us a little bit of your story. Where’d you grow up? How did you come to know one another? Your business partners now, as well as life partners, which we’ll dig into. But tell us a little bit about how that came about.

Ashley Marsh: So I am from Opelika. I actually grew up in a little mill village here called Pepperell, and I grew up in what was almost like perfect utopia. We had our own school, we had our own churches, we had a little marketplace. It was just wonderful. I honestly did not realize that I grew up on a side of town that was the other side of the tracks until I had to go to school. Somewhere on the other side of the tracks, I realized that we were poor. And so you didn’t know until you found out, right? So anyway, I grew up there and just had a very close family as far as all of my family worked at the mill and my uncles, cousins, grandparents, everything. But on along down the line, I meet John at about the whopping age of 18. They’ll head over heels. He was my James Dean, a little bit rugged around the edge. A little bit rebellious, actually. A lot bit rebellious. And he was my ticket out of Opelika. And here we are. We’re still in Opelika. So that worked so well. My claim to fame with John is I won him on a bet and that is a true story. I got bet that I could get him away from his girlfriend and I’m pretty competitive, so I like to win and there I go. I won them. So he’s all mine now.

John Coleman: And it was that a good investment Ash, has that investment paid off?

Ashley Marsh: Yes, it did have some negative interest in the beginning of it, but absolutely it is 100% the best investment I’ve ever made besides following God.

John Coleman: That’s awesome. In private equity, we call that a j curve. It’s that little dip before things get better.

Ashley Marsh: Right , right it’s a little dip and then it jumps off. Yeah.

John Coleman: That’s awesome. And John, you grew up in the area as well or what was your background?

John Marsh: I grew up in Albany, Georgia, about 2 hours south. People like, say, Albany, and that’s when, you know, you can know the difference. The test of them is it, is it a pecan or a pecan? Once you know that, you’ve got a true [..] on whether they’re from Albany but ended up here at 18 years old, you know, had this interesting start. My mom and dad tried to have a kid for 13 years. Couldn’t adopted me and 18 months later had my little brother. So my mom put the heavy […] in on me. She said, I’ve been looking at Anthony baby carrots for ten years. I’m going to love this guy and he can’t do anything wrong. So she still sticks with that. And just they gave me this amazing, you know, time of raising one thing. I reached out to my birth parents, and my father had passed away. Birth father. But I found my birth mother in an interesting way and didn’t really get to talk to her much. But I did tell her, Hey, I don’t know how that choice worked out for you, but it was amazing for me. And so this amazing story that God would take me from this place of where I couldn’t be loved because the situation to put in an environment where I was taken care of. So my parents loved me. I never had a real job and I still have it. And I started a business when I was 14, high end car stereos, and then just kept adapting. And I believe the same gifts I use today were the gifts I use in just God has continued to refine them, to see potential, give hope and see beauty and broken stuff. So it’s interesting to see that how it’s continuing to play out in different iterations. Our purpose was always running under the bottom, even when we didn’t use it in a way that honored the gift God had given us, it was still those same things.

Luke Roush: So how did you guys originally get started in the real estate? What was your draw there?

John Marsh: Well, actually, now we’re in the, believe it or not, the business. Before that, we were in the wreck used car business. So we built totals, we bought totaled Toyota, forerunners, Land Cruisers, Tundras and Sequoias and fixed them and sold them. I do all the framework and Ash should do the interiors and we’re putting these things together. And it was a lot of darned work we put all our money in. One of them, forerunners or Land Cruisers and take us about a month to do three or four of them and we’d be putting our hands on and praying they’d sell. We’d put all our grocery money and everything else, and the days our faith was at a very high level at that time. And then I’d drive to Atlanta and show it in about 50 people until somebody bought it. So from that context, were in the car business one day about this old junky house we lived in, took us six and a half years, one paycheck at a time, live in about a 600 square foot apartment, four of us to fix it. And when we got done, I said, What do you wanna do it? I won’t do another one. She said, What’s wrong with you? It was so hard, took so long. So I bought the house across the street and I just started realizing, Hey, I think houses are like cars with plumbing, they’re same stuff. And I said, Good thing about a house sit still and the car goes 80 miles an hour. And so that was started. We just found junky things that nobody wanted and we say what we can’t pay for. We don’t have any money. But would you lease them to. For $100 a month or $200 a month will pay you off in five years. We had no way to do that. But come to find out, there’s money in real estate. We didn’t have any clue. We just. I thought it was interesting and I normally change and don’t know it. Like, I’ll be changing careers and I don’t know. Ash will normally tell me, baby, do you know you’re not in that? Like I was saying, I won’t do these houses. She said, you already left the car business. I said, No, I’m not. I got cars to do in the shop. She’s like, No, your heart is left. You’re in the house business now. I am, huh? So that’s kind of how we got going.

John Coleman: That’s fantastic. And Ash, was it is immediate for you that you developed a passion for I mean, this is a peculiar type of investing kind of car flipping than moving the house flipping, I guess. When did it click for you or how did you get passionate about that?

Ashley Marsh: I’ve actually always loved restoration on old houses and historical items and honestly, I think John never really saw a historical homes when we first met. The same way that I saw them, he kind of look past them. But once your eyes get opened to not just the history of it, but the actual value of the craftsman and everyone that worked on it and how it really impacted the culture at the time and the community at the time. It just changes how you look at them. But my grandparents and my dad were all craftsmen, so I was always around people building, whether it’s building a room or a garage or spindles on a table or whatever. So I’ve always just loved it and putting my hands to things.

John Coleman: That’s awesome. And at what point did you realize this was going to be a successful model? So you’re living in this, you know, 600 square foot apartment. You’re rehabbing that and moving on to something else. Obviously, it’s grown into something far beyond that. But was there an inflection point where you thought, man, we actually we’re not just passionate about this, but this is a good idea. We can make money doing this.

John Marsh: It took a long time, I mean, definitely, real long time. Like, how could people be so slow kind of time? It was, like I said, slowly but slowly it was revealed Ash and I fixed our house. We’re in the middle of a hood and they’re like, Why are you fixing it so nice? This place is junky. And so we imagined we’d never get the money out of it. We spent on it at the time we took it, but we started fix another house and be honest what got it. So I started doing construction work and I was doing other people’s jobs. And so me and Ash start a construction company with like 12 or 1300 dollars. And that’s what we started. I just started taking jobs and I didn’t know anything about this, mind you, but I’m just taking a moment. And pretty soon we got like ten or 11 construction jobs going. We’re giving fix pricing and guaranteed time frames like we did on the cars. And nobody told us we shouldn’t do that.

Ashley Marsh: All right. I won’t have to interrupt him completely because he’s not telling you something. So whenever we first started, he was taking on every job he could find. If it was rebuilding a closet for someone, he was doing it and he was loving it. But what he was loving about it wasn’t that he was using his hands, is that in the middle of doing this, he was meeting all of these people and they were having church where he was. So he would be in there doing sheet rock in a closet and they would be in there talking about scripture. And it just kept going to the place to where people really wanted us or our crew to be on their sites because we were really bringing the presence of just the true spirit of God there and there was peace around us. And so word of mouth is what spread that. And the next thing you know, it was like John said in that place that we look up and you got ten full construction jobs and it’s like, oh my gosh. And then everyone calling and asking, can you move this house? Can you help restore this? Can you come downtown? It’s like you got a really big, really fast. And I believe that’s just the true nature of organic, right? That God shows sometimes […]blesses it.

John Marsh: Well and the thing we didn’t know, so I didn’t have any crew. So I just got guys from the car business because they seem like they yeah, it is like a car with plumbing. And so we started working on the house. We didn’t have any construction people, just car people. And then we started saying we need more workforce. And I realized that if I could go pick up the work release guys, we pick them up at five or 6 a.m. and take them back at five or six and they lay it out on you. I can tell you that they want to go. And so we had a whole crew of work release people and so we’re having a Bible study every morning, them guys getting saved by the truckloads. It was just it was crazy stuff and we didn’t know what we’re doing. Just telling people about this crazy God we found that loves idiots and we’re fixing stuff that nobody else would fix. And we thought, man, this is so much fun. I said, I see opportunity. I feel like a mosquito in a nudist colony. I just don’t know where to start when there’s so much opportunity. And it started making me trip breakers and there was everybody wanted me and I liked it. And then the city came to me and said, Buddy you got to get some license. I got to have license as they’re like, Yeah, you can’t be doing this much work without a builder’s license. So I had to go take study and take the builders test so I could get some license.

Ashley Marsh: And, you know, in that too, John, the amazing thing is being trusted with a little as always, God blesses you with much and the little that we were being entrusted with. I mean, we’re talking about thousands of dollars at a time. We weren’t doing as big a deal as we’re doing right now. Actually when I started our checking account for our construction company, we had $1172 and that was it. That was all we had and we had to be really wise stewards of that. But even with the men that John was going and picking up at work release, he developed such a trust with our judicial system and the judges and everything that they would call and actually ask, Hey, can we place this person with you guys? Because we know that you’ll be faithful to teach them and to steward them as a relationship. And so we had a lot of young men come out of that that actually started their own businesses. And it’s just been incredible to see that God blessed us in the midst of us really not knowing what we doing and just being willing to be faithful to what we had.

John Marsh: I think of one young man that came recently, has a huge roof, the commercial roofing company. I got him out on work release as a college kid that got a DUI and he was locked up. And then he did something else and got locked up. We got out on work release, learn roofing with us, and now he’s running, I mean, a monstrous roofing company. So it’s interesting. We just said it isn’t just witnessing this witness. I just tell him, go stand beside that Godly guy that’s done, got healed. And he just when he goes to bathroom, you sit outside the door. When he goes to lunch, you’re sitting with him. You commit two years. You do that. You read your one, your Bible, you pray, and you come to work every day. And I’m telling you, your life will change. And they have.

Luke Roush: So it’s not just witnessing, it’s with ness. And I think that, you know, it’s not just actually fixing broken buildings, but also what you’re really getting at is actually how God might use you guys to be participating in fixing broken people, of which we all are broken people. And you’ve made a comment before, John, around the way you approach real estate and the passion that you have for it is a mixture of making both your economics teacher and your Sunday school teacher proud. Talk through that a little bit. What does that mean? What does that look like?

John Marsh: Well, and a lot of that came from the original ad. Jess Corrals helped me a lot with thinking this through, because it it really is a challenge. But what God showed me when we were idiots and broke is that the answers and fishes and loaves you measure, you manage, you multiply. And what happens is you measure, you manage, God multiplies. That’s, you know, one of the fruits of the kingdom is the fruits are love, like multiplication. When you see multiplication, when God showed up everywhere. And so what we began to realize is that if we didn’t measure things well, how in the world could we manage them and how could God multiple them? So we were just as passionate about investing in the broken lives and making movement, whether it’s get them a budget, get them read in one year. Bible a good thing about reading the one year Bible We love you get a bunch of guys reading the one your Bible. You link up when you read the same piece of God’s word over and over. Not have guys. Did you see what David did? I was like, God said he loved him. I know he missed the dang thing. Was I bad as him? So we get on the same page and what we began to realize we want to move their lives and help them understand that if they measured and they manage their money according to God’s word, it would multiply. But if they did that with their life and their family, it would multiply. And so that’s how if we don’t feel like if we can only please the economics teacher and not the Sunday school teacher or the Sunday school teacher, not the economics teacher. It’s not for us. That’s our spot is to do both. And to be honest with you, we don’t consider deals any other way.

John Coleman: When you’re coming out of look, what’s interesting is you’re not traditional real estate investors. You dove in headfirst kind of fixing these places up, a totally different model, getting guys off work release, you know, patching together these teams. Not unlike how we brought Luke on the sovereign’s team. Actually, a bit unusual in the in the real estate space. You had to have made some mistakes along the way. It couldn’t have all been smooth, you know, as you built that, what did you what did you learn from some of the mistakes you made along the way?

John Marsh: I think my heart sinks when you say that. How many mistakes we made our not to do list is beautiful. We had tons of times where we felt like, you know, we called the defecation to hit the ventilation. We just did the dumbest stuff you can think of. But the challenging thing was that we didn’t know and didn’t have anyone who could help us. So some of the problems we were doing, number one, is we you know, we didn’t understand that the mindset to go from being a worker to a leader to an investor, all those are chasms to get over when you’re broke and right. I mean, one is I just got to survive. They’re like, I put everything on the line when you didn’t have nothing. That’s like putting up nothing, you know? I mean, you didn’t put any down if you don’t have anything, but then you start building and stuff starts moving and you, you have a little bit. And what one of our mentors did he told us, he said, John, you see what the guys in the construction business you’re working with, their vehicles are a pickup truck for Tempest Beyers, also because he owned a band good tires. So he said, you won’t drive the kind of truck they drive and live the way they live. I said, no, Sir. He said do nine jobs for other people and do one for yourself. And so he gave us this mindset of beginning to put some back and do some yourself. What that did is really helped us understand. But as we began and I hope we get to some more the investing part for us as investors, we did in my number one failure in business. I think in the early days it was that we played amateur providential assist sometimes in other people’s life and ended up hurting people. Because I had the gift to understand business, we could put money behind them and sometimes we’d put money behind people without experience that didn’t have the character to handle it, and we just helped them crash a car at a higher speed. And that’s probably one of the biggest things we messed up with our investment dollars. We call it a rent a Dream program. We needed rent and they had a dream and we’d invest in them and just it produced a dang mess.

Luke Roush: So, you know, I’m so glad you brought this up because it’s, I think, something that a lot of leaders wrestle with as companies grow. You’ve got to be able to recruit other people who can do what you’ve done previously, and you’ve got to be willing to let them stub their toes. You just got to make sure that they don’t, you know, end up with a massive chest wound, but like stubborn toes, skin and knees. That’s okay. How do you figure out what the guardrails are as you invest in individuals? What is sort of okay kind of learning by doing and some amount of minor failure in that versus know total high speed wreck. How do you make those judgment calls? Ashley and John.

Ashley Marsh: Yeah, honestly, we’ve learned that we want to make sure that we spend time with people and understand who they are at the core of how God made them and how they really process information, how they make decisions, how they show up, whether they’re under stress or not. And that has been key for us to really work well with our team and work well with our clients that we’re bringing on. So if we were looking to like we actually had a young man that came and visited with us not too long ago about opening a catering business. And he’s a wonderful young man and we really like him. But just to be honest with him, to say that we don’t know you and the capacity of how you handle your money, how do you steward your time? How are you behind the closed doors with your wife? How are you whenever you are with your. And that sounds like you’re getting too personal, but those are the things that drive how people really will show up whenever pressures happen. And what we were doing previously, like John said, was we were doing it off of what we thought their capacity was or we were doing it all our belief or our hope for them. And that’s a lot of weight for someone else to carry, you know, whenever they think, you know, I believe in you so much. So now you have to run and succeed and they’ll give it all they have, but they only have so much of that. And so John and I spent a lot of time doing due diligence where the people that we’re working to invest in, whether it’s our time or our money resources, because both of those are very obviously very valuable. One of them can be reproduced and one of them cannot. So, you know, to us, our comm is the most valuable thing that we can give to someone. So what do you have to say about that?

John Marsh: Well, two or three things. One thing I’d say is people don’t see the world as it is. They see it as they are. And so we get like give you an example. We build restaurants now sometimes in service of growing downtown’s hospitality businesses. And we’d have a fine dining chef come to us to say, and this happened to us, cost us a bunch of money. So it was a good one. He came to us, said, I’d like to just open a simple hotdog place. Well, next thing you know, we got $12 hot dogs because he’s gourmet in. I’m up. No matter what somebody tells you, they’re going to be who they are, not what they want. And so if you got a fine dining guide, don’t think you’re going to get them a hot dog because that thing will go gourmet. He’ll be toast on both sides of the bun and putting all kind of special sauce on it. And so we realized we got to ask ourselves, who are they and their identity, because identity drives behavior. The second thing with that is doing this personality test, you want to ask yourself, are they a future voice or a present voice? Do they stand in the present and go, okay, tell me what is or do they stand in the future and go Tell me what could be? Because the stand in the future kind of people say and tell me what could be like me. We’re highly excitable and sometimes I think we’re guilty of being high energy. Low IQ was a powerful combination. I mean, you give some stuff started, but like Ash one time she gave me a representation because she would be running all the money and back in before she took over all the companies a number of years ago, which made me feel a little bad because she’s done such a good job and made me look like I was less intelligent than I even think I was. But so anyway, we’re standing at the dryer and she says, Hey baby. And I’m talking. Waved my hands. Oh, baby, did what I won’t do. I won’t do this. She’d hand me a box, had me something else had me. This reason my arms are slam full. And I said, What do you want me to do with all this stuff? She says, That’s what you do to me. And so I would just keep piling stuff on, starting stuff, getting excitable. About the time, something new, the honeymoon went out of it. I jump out and hand it over to her. Now this thing, I’ve got it going. And somebody needs to make this like a trade journal down. And so we run now off a EOS type of system that we’ve adapted for our marriage. And for our business, which we call visionary integrator, the same way they do, we believe we need a Wall and a Roy Disney and everything we’re building. And if we’re going to invest in and we’ve got to have somebody who’s going to make the trains run on time and somebody who’s going to get excited and stir stuff up.

John Coleman: Well, talk to me. So one of the things you all touched on that I love so much is you’ve talked so much about the importance of the individual person that you’re investing in. And I think Luke and I see this across asset classes right now. You think entrepreneurs or owner operators or others, the person is what you’re evaluating almost first before you look at anything else. But there is a lot of complexity to the type of real estate investing that you all are doing, particularly as you’ve approach to rejuvenating whole towns like Opelika. You’ve really taken a lot of ownership. Talk to us about the mission of the real estate investing that you have now and things like community revitalization and how that intersects with good business principles for the types of investments that you choose.

John Marsh: Well, one thing we say is we call the work we do now, we’ve coined it irreplaceable real estate. The reason we say is irreplaceable is it’s been built by people who don’t live anymore with materials we don’t have anymore and methods we don’t do anymore with entitlements we can’t get approved anymore. So that makes it special. And then when you layer Ash’s gift of hospitality, which is her gift, and that definition is I thought of you before you got here. She said, that’s what God did to her and does to us. We layered that and great programing over it. We get something that’s quite incredible. And so our main focus now is helping. Now ten cities steward large amount of real estate where over 1,000,000,007 in depth in the portfolio size that we’re in. We’re helping them steward to make economic, social and spiritual capital. And we want it to make all three. I mean, that’s the story of the Good Samaritan is economic, social and spiritual capital. But people think the money is the problem and we believe the money for us has never been the problem. Money follows vision. Vision doesn’t follow money. You don’t get money. And then the vision come clear. You get a good vision, a clear plan. And so first thing we do is have models, okay? We model everything. Our business approach should look any private equity, any other real estate investor ought to appreciate and see sophisticated real estate development approach to it. Now we do it in a multidisciplinary way. We look from the very top and from the very bottom. We look from the investors point all the way through the deals, through construction, development, all these things. But we also go to the operators point. And so some of the questions we say is not just how much can we make in rent or our return, but how much should we make, and then how can we align above that? So if we’re starting a restaurant, we’ll say, let’s give them the best ramp we can. We’ll go in, maybe invest in the business, in the leader, and then we’ll also have the real estate and we’ll give them the best rate we can to get a break even. But then we ratchet up more percentage based rents as they succeed. Because they’re succeeding, we want to. And remember, in the restaurant business, the first millions got a little bit of money in. Second got more, thirds got more. It’s exponential because the hard costs don’t go up so much. And so it’s bringing sophisticated filters and alignment to that whole value chain. That’s the way we believe from every bit like some cities, our largest city, Winter Haven, Florida, they bought up a good bit of 80 blocks of downtown. It’s close to a $200 million portfolio and 100 million of that, or close, was raised from 60 locals. So it’s a community development fund with some very unique characteristics of getting liquidity when they need it of ownership and care in a city you’re in of a distribution model that makes sense. I mean, these are the powerful alignment tools of placemaking that we think allow us to forge and pioneer what we’re calling a new asset class of real estate, which is irreplaceable real estate, historic downtowns, lovingly restored and curated in a sophisticated way.

Luke Roush: So one of the things I’ve heard you speak about before is this idea of starting lines, finish lines and deadlines. How do you kind of overlay those constructs in with this idea of irreplaceable real estate?

John Marsh: So, Ash, I’ll let you maybe you want to tell a little bit about like how we work with these projects from hospitality and other things, how we layer that in to doing deals like say, for example, we did pass social or something like that. How did you in time that team of hospitality focus on that?

Ashley Marsh: So what I believe we do really well is we help people remember their story and they end to understand that what they’re selling is the experience, not the business. It’s really easy, I believe, for creatives to think that they just have a great idea and they have a plan with that idea, but they don’t really understand the execution of it. And it’s a daily execution of beauty, of experience, of knowledge and execution. And so our team comes in and actually make sure that they understand their story, understand who they are, and. That story and understand how to actually bring the client or the customer into their role in the story. You know, that’s one of the things we do. The other things I think that we do really well, and that is making sure that we hold the proper attention on the vision and don’t let them get astray on it. Because as we all know, because we are entrepreneurs, it’s really easy, especially if you’re married to an excitable entrepreneur. It’s very easy to get distracted with shiny things and new things and, you know, new opportunities or new ideas. And we’ll pivot and change and pivot change. That’s very expensive and it takes a lot of time and it gets you off all those deadlines. So, you know, making sure that you have people on your team that are working with you, like John said, that you got to have that visionary that’s out there doing those things and helping you hold that vision, that helping you also dream big. And then to have the other person or people that are there to keep things in order and check in on the timeline and making sure that the construction happened the way it needs to happen and so forth. So that’s how we I think we work well with making sure we have those timelines and deadlines and making sure we meet those and honoring the vision.

John Marsh: We say we’re like general contractors for vision, but what we do is we created we took a scrum method from software development, the Agile process, and we adapted it for project and city and community development. And so we run two weeks sprints with teams, we have a backlog, we have an upcoming sprint, we have a current sprint, we have a refined sprint, we have a done sprint, and we run two week intervals with that with the week in between, being an agile meeting between one of our team leaders and their team leader. And so it’s holding the tension on the 20% of the things that if they don’t, our special attention will never get done. And what we do is we draw lines in the sand because everybody works better. If you got a deadline, we have to get to something. So we’ll set a launch for a restaurant, we’ll set a log for hotel. We tell them to listen. Now you can wait until the end and work 24 hours a day. People going to sit and in wet paint. But we’re open and we don’t care. We are where we ahead. We’re going to do it. And we’ve always worked good. We don’t do projects without a deadline because one thing about making a plan and making a deadline is not just what it does, it’s what it does to you. It makes something of you to set a deadline. And so we do that with them and we make sure we line up the economics to it to where they get it incentivized, excited about it. Everybody on the project should be excited about hitting that deadline. And we don’t we don’t miss deadlines. It’s just not what we do. We tell them, come hell or high water, we’re going in 24 hours. If we get close, we ain’t going to make it. So we get real, but we don’t fix pricing, guaranteed time frames, construction for all these years. And if you didn’t do well, you wouldn’t been in business very long.

Luke Roush: So that’s I think that’s powerful. You know, it speaks a little bit to the whole salt and light thing. If all you are is light, but there’s no salt and then, yeah, every project ends up slipping past. So you got to be able to have both. And from my observer’s perch, seems like you guys dance on that line. Really, really. Well, one of the things I want to come back to is this idea of irreplaceable real estate. And, you know, just as investors kind of marketers, we always think about kind of market size. I’d love to hear y’all riff just for a couple of minutes on the market size for small towns in America that need to have life breathed back into them and both TLC, but also some accountability and redevelopment. Maybe just speak to how big is that opportunity? It certainly is bigger than the two of you can do that maybe for our listeners or other people who are out there in the real estate arena that might be thinking about trying to infuse more meaning in what they do day to day, maybe just share a little bit of how big are we talking about?

John Marsh: And that’s a good question. I mean, I just know it’s it’s so big that it breaks my guessing machine like when I think as far out as I could take, I go, oh my gosh, it’s bigger. I tell Ash, I feel like as a baby, even a blind dog, go find the bone. We have landed on something that is amazing. I get so darn excited about it. And it’s because, I mean, we’re already stewarding the type of portfolios we talked about and we’re just getting started. So, I mean, it’s billions and billions and billions of dollars and the greenest houses that exist are ones that already exist, not ones we’ll build. And the most attainable houses that exist are the ones we don’t have to build. They exist. And the most amazing materials that were trees that from the time that Adam was here till we cut them exist, hidden up in these historic structures. I mean, think about today, they want to make and say that a sheet rock box would drive it on. It is worth the same thing as my 100 year old building with a two foot thick masonry wall. That’s beautiful. I mean, that’s dumb. That’s some banker said that the dadgum amortization term determines value. Well, that’s only if you’re looking out 20 years. We’re looking 50 or a hundred. We’re asking ourselves, what can we do for the good of our city that would last 50 years and no one be able to undo it? So I’m dreaming. I was talking to a guy recently, two guys I’ve had called me in the last six months that said, John, we’d like to deploy a half a billion dollars in the things that you’re doing this type of work from families that were out of the country, one in Hong Kong, another one Brazil. And then we will deploy it for 50 years. And so I believe that what we’re talking about, the cost of redeployment of capital and the velocity of capital is so powerful if you can do it over generations and understanding that, gosh, what we have is irreplaceable, they’re not building another downtown Opelika or any other small town. And you just think how many small towns we drive through that sit there with embedded value that people don’t know how to do anything with. And you know, if you ask them, they say, Can we do something with it? It’s impossible. And so our job is to take people from impossible to possible, but probable. We’ve proven this model can be done in towns as small as 3000. So, yes, it’s everywhere. I mean, everywhere we go, I’m tripping breakers are told, Ash we gotta buy this place. Like you say, that everywhere we go. I just think it’s amazing. So our goal now we started doing this, didn’t know what to charge, but we had godly people. We did it for fees, then we started doing it fees and we did some equity. So we’re they’re partners. The third iteration of this is fees, equity, and we bring capital. That’s what we’re doing now a lot of times. And so I think the fourth iteration will be imagine if there was a sophisticated design instrument, a fund that could bring shared services to this type of work, could restore cities, and could give people like Ash and I and others a way to have liquidity at some point for generations to put it in there, a stewardship vehicle that could look out 50, 75 and a hundred years like we do for our portfolio. We’re over 275 properties we’ve done in our city. We still own over 200 and we’ve never taken outside capital. We put our butts on the line personally, guaranteed it all the way through. And so imagine what we could do with a little bit of a little bit of additional horsepower.

John Coleman: Amen, man, I’m like ready to open my wallet and move to Opelika after that.

Ashley Marsh: You should it is the center of the universe. So, I mean, you’d be in a great place.

John Coleman: That’s right. That’s right. Well, we’re going to pivot to a very fun topic, I think, Luke, we almost have to employ a lightning round here. It would be a violation of our fiduciary duty not to. But just very briefly, before we do that, talk about Faith again. Ash talked about it at the beginning. Obviously, you’re casting a vision for community here, but on a day to day basis, how does faith influence your investment strategy? To tie that together for us.

John Marsh: Two things. I’ll say actually and give it to you. One is unity and others peace. If Ash and I are not in unity, we don’t move because the place of unity is the place of command and blessings. We want unity between each other, unity with the spirit we get on our knees and ask God. And then with also we want the multitude of godly counselors. There’s wisdom. But then that second thing is peace. We believe the place of peace is a place of power. And so we look for people of peace and places of peace, and we want to operate in projects that have peace around them. And so if those two aren’t there, we don’t go forward.

Ashley Marsh: So I totally agree with John, but also the fact of Paul’s being sensitive to when the spirit says, hey, pay attention and pause for a minute. We actually had one of our mentors give us a question yesterday that he just like I just I would like to throw this question to you for you to consider. For you and Ash to talk about and consider. And whenever John brought it to me, instead of, you know, blowing up and thinking, but we’ve already decided we know God is going to bless him. We already […]. It’s like you have to pause a minute and say, Hey, wait a minute. You know, this is an opportunity for us to again hear really the direction God wants us to go and to remember that he is the one that directs our path, you know? And so it’s like allow that allow that movement to happen and to be adjusted. And that sensitivity brings the greatest peace into our home, I believe, and into our businesses and everything, because we will absolutely slam on the brakes if God tells us to stop right in the middle of the road and don’t care if we get creamed. It’s just like it is what it is and all of the other things of unity. John and I had such a broken marriage and so many broken parts in our business very early on that when we found the unity and the peace that God gave us, we refused to move from it. And so staying unified and trusting God, honoring one another, honoring the gifts of each other that keeps us in that place of unity. We can be effective there.

John Coleman: That’s awesome, y’all. So we are going to conclude before asking you for a good scripture reference at the end with a short lightning round. The rules are Luke and I will pose a question and then we’d love to get 15 seconds responses from y’all. So short and sweet. I’ll kick us off and then pitch it over to Luke. Best and worst investment you’ve made.

John Marsh: Best investments buying up a downtown when nobody wanted it. The worst investment we made, we allowed somebody to sell a restaurant to a new operator and learn to find out that the guy who can fly a 747 can’t necessarily build one. That cost us a couple million bucks.

Luke Roush: I got one for Ash and then my turn around and John get an opportunity as well. Ash, what’s your favorite saying that John uses and you can’t use the mosquito in a […] Because that’s my favorite. That one’s off limits. But anything else is fair game.

Ashley Marsh: Oh, my gosh. Okay, so we actually have a thing called John isms and it’s an actual language. And I don’t know if you ever used to watch VeggieTales, but I used to tell him all the time, you know, you can’t correct the language of the king is what the little cucumber said. Anyhow, I would say dumb as a sack of hammers is one that’s a really good one. Doesn’t translate well in other countries, by the way. They don’t know what to do with that. What do you say? Let’s see another way. Because he uses my speech in the nudist colony a lot. I’ll have to go back on the second one. Dumb. Yeah.

John Marsh: I’m saving that.

John Coleman: One. I’m saving that one.

John Marsh: One of mine is the goal is to disappoint you at a rate you’ll stand. And we’re on a journey that looks like a detour.

Ashley Marsh: Oh, I’ve got a word. He uses two words that he uses that are so interesting to me. He says a goalds with a D and insteaed of goals, and he says “miracle” instead of miracle. I don’t know if that’s a Southern twang ism or a that’s just his words.

John Marsh: Well, in the goal of our companies is front row seats to miracles.

John Coleman: That’s awesome.

John Marsh: You know, we say, God, we want front row seats to miracles. 50 yard line seats, God, they got to be our miracles. But we want to close. We want to see that. And I guess the other thing is that, you know, as you think about this, I say marriage is complicated. It’s more complicated than your transmission. And I used to think it was just about sex and supper, but there’s a lot more to it. Oh.

John Coleman: I feel like The Lightning Round actually just led itself to a conclusion there. Luke, we got a lot of good aphorisms and we love to conclude this podcast just by asking each of you, if you don’t mind, for a piece of scripture that’s really influencing you right now that you’re learning from just to take us home. So John and Ash, anything that you’re reading in the Bible right now, it’s really changing the way that you see things so that you’d like to share.

John Marsh: I can start, I guess, well, it’s this Galatians 2:20. You know, the idea that we are crucified with Christ and not I live, but Christ lives in me on further study that word is co crucified. Not only are we co crucified, we’re co resurrected. And so something happened a very long time ago, this very significant today that we’ve been co resurrected. We don’t get eternal life once we know when we have it. I’m riding in the dark suit, but all the power that raised Christ from the dead inside this crazy person and that just blows my socks off. You know, the fact that God loves idiots and he’s got a plan, and if I’ve got hope for my future, I got power in my present.

John Coleman: Wow that’s powerful. What? Speaking to you Ash?

Ashley Marsh: Well my scripture that I always hold on to and I come back to is Jeremiah 29:11, which is I know the plans I have for you, but the actually what I love is in Jeremiah 13 reads on his life plans to prosper you not harm you. And he goes into saying The very place that I’ve caused you to be driven and held captive is the place I’ll deliver you from and. There was a time in mine and John’s life where we tried to escape Opelika. I mean, hard. We tried so hard to get out of here. I mean, we felt like this is not where we were supposed to be after we reconciled our marriage, after we crashed businesses, all the things that were happening. And God brought us back here to use us as a seed and to be used so beautifully. And so that is my scripture. And it I keep it in my mind and my prayers every day is that he’s the one that knows the plans and he’s the one that caused us to be here. And it’s such a blessing to be here.

John Coleman: Wow. That’s powerful, y’all. Well, I’ll tell you, doing a podcast with y’all is like being a mosquito in a nudist colony. That was a lot of fun. I think we could talk to y’all forever. And I know we’re really grateful both for the work y’all are doing out there with these irreplaceable communities, the way in which you’re lifting up individuals within those communities, and also just for sharing that wisdom with us and with the community here. So thanks so much. It was great to have you on.

Ashley Marsh: Thank you.

Luke Roush: Appreciate all you.

John Marsh: Thank you guys.

Henry Kaestner: Welcome back to the Faith Driven Entrepreneur Africa podcast. I’m here, as always, with Ndidi. Ndidi, good morning.

Ndidi Nwuneli: Good morning. Great to be here.

Henry Kaestner: I am so fired up about today. We’ve got a really dynamic and very, very successful man of God who has an incredible story and you know it infinitely more than I. But tell us a little bit about why you’re excited about our special guest today.

Ndidi Nwuneli: Well Strive Masiyiwa is recognized within Africa and around the world as one of our leaders in the business sector in Africa. He’s Zimbabwean started as a young entrepreneurs built multiple businesses in telecoms, in financial services, in construction and is also recognized as a philanthropist. He’s been the chair of many, many boards, including AGRA. He serves on the board of the Rockefeller Foundation, most recently joined the board of the Gates Foundation, this pioneer board. And he is just absolutely brilliant. He’s also recognized philanthropist. His wife and him have started the Higher Life Foundation, which serves millions of young people across Africa, and he’s recognized as a speaker. I mean, he has the biggest social media following. And I know Henry was a bit envious when we look at the number of people who follow him on Facebook, on Instagram, millions of young people who draw inspiration from his life and his walk with God. And he’s so authentic when he shares his life stories on all of these platforms. So I’m really excited to hear what he has to share with us today about his walk with God, about his business, about his role as a father and his role as a philanthropist.

Henry Kaestner: Indeed, one of the things that I’m really excited about today is that we infrequently have so many from the world of telecom, and that’s my background. It’s how God has blessed me and I’m grateful for it. But telecom is not always the most interesting thing. But when you look at somebody like Strive, it becomes incredibly interesting. And yes, because of the size and scale of what he’s done with Econet Wireless all across the continent, but also the way he’s taken on just different power structures like even Mugabe and presidents. Right. You’ve seen a guy who’s fearless on behalf of the marketplace and fairness, and what an inspiration. Strive. I’m so grateful that you spent the time to join us today, and I’m looking forward to our audience hearing from you. Before we get started, give us an overview, a bigger perspective, if you will, for Africa.

Strive Masiyiwa: Well, let me just give you something people don’t often hear about Africa. Let me show you Africa as an entrepreneur, as I see Africa. Africa is a continent of 1.3 billion people. It has a GDP of $2.5 trillion. It is almost twice the size of the GDP of Russia. It is the same GDP size as India. It is a huge economy. We trade with the world at 500 billion a year. We receive less than 20 billion in aid, and most of that goes to less than a dozen countries. So Africa is a real place. It’s a real economy. Okay. There are people building businesses in Africa, the continental businesses that are huge businesses. We have them. We have companies in Africa that make jet aircraft. We have nuclear power stations in South Africa. So, you know, today 60% of the world’s young people are African. By the turn of the century, 40% of the world’s population will be Africans. You know, so Africa is a fundamental part of the global economy. And what Africa needs today is people who think of it in terms of an economy, a vibrant place of entrepreneurs. Yes, we have our challenges of poverty and injustices. We have wars in some places. But hey, there’s a war in Europe right now, and they’ve been trying to stop wars for a long time. Okay. But I can tell you that we’ve never had an African country invade an African country, even though we have a lot of challenges over borders. We’ve never, ever seen an African army cross the border to another African country. Not in my lifetime. Okay. We don’t allow that. Do we like where our borders are? No, we don’t. So there’s an Africa. We want you to engage with the Africa of Africa’s entrepreneurs. The Africa. We have more Christians than the population of the United States. Okay. We have more Christians than America. And we have bigger churches than America. So come. Come see that Africa.

Ndidi Nwuneli: Right. Thank you so much, sir. And I have followed you for many years. Met you a few times. And obviously I consider your wife, my friend and mentor. And I’ve met your amazing children. And when I think about your walk with God, there are a number of things that strike me. One is how you’ve been able to almost enter the lion’s den in many countries with a fearless spirit motivated by your faith, but also by your vision and passion. And in sectors like telecoms and ICT that are highly regulated. How have you navigated that from a faith lens and in the business world?

Strive Masiyiwa: Well, you know, I’ve taught my children I have five daughters and one son. And I have told them that prayer occupies when you have fear, push it out with prayer. When you have doubt, push it out with prayer. So we should never have fear. We should be wise. But we should never have fear. So I never think in terms of the lion’s den or anything like that because that just would be wrong. I am the lion. It’s not the other way around. I have never found a place on the earth where I cannot tread. The other side should be the one that fears you. Okay, so sometimes we forget who we are. Okay. So I’ve never been in that place where I had to fear somebody. It only meant, perhaps, that I hadn’t prayed sufficiently.

Ndidi Nwuneli: I love that. I love that it pushing away fear. And in your context, you’ve clearly stared fear right in the face and then the lion. And can you just speak to specific context? You’ve written widely about your Niger experience, about your Zimbabwe experience. When the team was doing research on, you know, the the man who sued Mugabe came up as one of the taglines, but taking on ethics and integrity and taking on some of very difficult issues around corruption. How have you navigated that and what strategies and additions of prayer and courage and boldness have been utilized?

Strive Masiyiwa: Sure. Look, these are things that have gone on in the past. I think that for any young believer who happens to be an entrepreneur or for that matter, it really doesn’t matter what walk of life you’re in. Never approach it as the opportunity knocks once. The Angel of God is always at the door. All you have to do is open the door. So you should never feel that you cannot walk away, that you have to somehow compromise because you’ll never have another opportunity. That is not correct. So if the fundamental doctrine that you hold. That comes out of the Word of God and the word of God is the full body of the Bible. You see, when I study the Bible, I have no New and I have no Old Testament. I have the Bible. You see, you will never understand Genesis chapter one if you don’t understand Revelation chapter 22. It’s impossible. You will never understand the Gospels if you don’t understand the Epistles. You will not understand the Book of Joel if you don’t understand John’s baptism, you know? So these are all fundamentally intertwined. And when you engage with it, you never have to deal with fear.

Henry Kaestner: I’m so grateful that you said that. I was about to ask you if there are specific passages that helped informed the faith that you have that you’ve found most applicable. And maybe you might answer that if indeed you feel that that’s helpful. But I think that the greater lesson is the totality of Scripture, the entire narrative. And I think that a lot of us in the Faith Driven Entrepreneur world might be guilty of having 20 or 30 verses that kind of like drive us. And they seem to have direct application to what we’re doing. And they are and they are good. And there are things like the parable of the talents in the parable, the sower, etc. But you are offering up and I agree with you that any one of those taken by themselves, you’re just seeing it in black and white, that you need to see it in the totality of scripture, and then that really brings it alive. Is that indeed what you’re saying? And or with that understanding of a holistic view of God’s word? Are there different passages or lessons that you found most applicable to you in your life?

Strive Masiyiwa: No, it has to be the totality. If you’ve been a Christian for at least five years and you can read if you haven’t read for yourself the entire Bible you are missing a lot the path to maturity is to know the entire body of the Bible. And Jesus himself said that the prophets were writing about me. They were writing about him. Okay. So Moses was writing about Jesus. That is the core. And you have to study the Bible and look for him. Look for him in Moses. Look for him in Abraham. Look for him in Joshua. Understand that whole body and everything opens up. So I never say, Look, I have a particular passage of scripture. No, I love the whole body of the Bible. Faith is defined almost scientifically in the Bible. As you know, I’ve never seen anything that comes to that level of definition as faith. It is also extraordinarily simple to understand how you get faith. You don’t get faith by being a Christian. You get faith by being a Christian who meditates on God’s Word, who spends time with God’s word, who dedicates themselves to God’s word. I spend roughly 2 hours a day studying the Scriptures.

Henry Kaestner: Wow.

Strive Masiyiwa: That is what I have done for over 25 years now.

Henry Kaestner: Wow.

Henry Kaestner: How did that start? So 25 years is a long time. But has faith always been a part of your life? Is it something that’s always been part of your business life? Or did something happen where you said, this is the thing that’s going to be the most important thing for my life and help drive my business?

Strive Masiyiwa: No, I don’t I don’t look at it from the perspective of to drive my business. It is about to drive my life. You know, so when I was, I guess about 33 years old, 32, something like that. I’m now 61. I wasn’t a man who believed particularly strongly in God. I’d never voluntarily ever gone to a church, and neither did I ever read the Bible. But when I was about 32, I had my encounter with the Lord. And from that day on, I picked up the Bible and I read it for the first time. It took me about 2 to 3 weeks, something like that, to go from Genesis to Revelations using the NIV. And I never put it down during most of that time. And so, you know, that’s my personal journey. So it guides my mindset. How I approach things. And what I pursued and how I go about pursuing it.

Henry Kaestner: What guides you during your time in Scripture? 2 hours is a long, long time. Do you have a systematic way of reading through the Bible? Tell us a little bit more about your discipline on that.

Strive Masiyiwa: The way I read a book, start Genesis Chapter one and read through it, and I try to do that at least once a year. But then I have particular things that I study that I’m going through in a particular period, and I write extensive notes on everything that I read today. For instance, I was on a wonderful time. I was studying Ephesians chapter two, verse 15 in the Amplified Bible. That was it for 2 hours Ephesians chapter two, verse 15, in the Amplified. It’s a fascinating verse because it talks about the fact that Jesus annulled the law. Okay. So for you to understand why he annulled the law, it goes to the very core of the doctrine of the cross. What happened at the cross. So I would engage in something like that. I will go and look at what others have said and written about it, and I look at the different translations. I’ll even go and look at what the Greek witness said about it. Try and just engage in such a fundamental passage.

Ndidi Nwuneli: Amazing. I love it. You know, as I reflect, I’m listening to you, a lot of young people in our continent and you have a heart for young people look to you as a role model, but many of them are getting disillusioned by the church. I don’t know if you’ve experienced that, but it’s something I’m seeing in my own network, especially the successful and intellectual Africans who are questioning the role of the church in Africa. What would you say to that?

Strive Masiyiwa: Well, I would be naturally very disappointed, but we are not in the church because we want to follow a particular pastor or a particular evangelist. It is about the word of God. Okay. If you are engaged in the word of God and for some reason you become disappointed because something happens somewhere, it doesn’t change your calculus. You find the church, but it’s not about being in a church per say. It’s about your personal relationship with Jesus Christ. Someone says that disappointed in the church, are you saying, you’re disappointed with God. You know, that’s a that’s a pretty interesting place to be. So the key thing is to have like a calculus.

Ndidi Nwuneli: And in terms of finding role models like you who are men of God, reflect Christ and also an inspiration to the next generation. How do we create that ecosystem of apostles in the marketplace, especially in environments where the line between honesty, integrity and hard work is often blurred with a get rich quick mentality?

Strive Masiyiwa: Well, first of all, we must avoid creating terminologies that are not in the Word of God. There is no word in the Word of God which says Apostle in the marketplace. We are not called to the marketplace. We are called to take the Gospel of Jesus Christ to the world. That’s what we are called to do. See, I’m not called to be a business man. I’m not called to be an entrepreneur. Not called to be an architect. There’s only one calling, which is the great commission. Okay. That’s why the word of God tells us that preach the gospel in season and out of season, wherever you are. Okay. I could have had a great conversation with you about anything, really. We could have talked about telecommunications or cryptocurrencies or blockchain, whatever you want. But here we are. We’ve got a Christian audience. Okay. Preach the gospel. Saint Francis of Assisi said, you know, preach the gospel. But if you must use words. Okay. So sometimes I don’t use words, but.

Henry Kaestner: But you use words a lot and it’s unbelievable. So we’re all in big trouble if our identity is tied into how many people go to Faith Driven Entrepreneur groups or how many people listen to this podcast, or how many people go to a Facebook page or LinkedIn page. And lest I think that we have a Facebook post or more appropriately maybe for us or LinkedIn post it as widely read. I then look at the posts that you make and you will get 450,000 likes when you use words and walk people through a framework on how to think about scaling a business. So, you know, I go for instance, right now that’s something I’ve been reading, which is the three S’s that you have where you talk about scaling a business. Can you walk us through that a bit about how you are able to take some of the lessons that you’ve learned in business, steep them in Scripture, and then share them through constructs like this with the three part series that you have on scaling your business.

Strive Masiyiwa: Sure. So I explained to people that you don’t overspiritualize these things. These things are fairly straightforward how you scale a business. And I’ve built a multibillion dollar business that’s. It’s fairly straightforward. I teach of the three P’s. And I say, First, you got to have a product. Okay, what’s the product? And it’s got to be a product that somebody is willing to pay for. Okay you kind of run around with the product that no one’s going to pay for? Okay. You got to have some sort of revenue model around the product. Now, after you have a product, you must have people, okay? Particularly if you are the one who started who invented something. Okay. You got to have good people. That’s the second P is the people. And the third P is process. You’ve got to understand the process. Okay. Because we scale through process, understanding IT systems, understanding payroll systems, and, you know, all those are processes and then the people coming together around a product to scale. So now I noticed that I don’t have an M in there. I don’t have an M for money because it’s in people. It’s the skills you see raising money for a business. It’s just a skill. It’s one of the core skills. Okay, so I gave an example. I said, you know, when I was scaling my telecom’s business, I realized that my skills for raising money were not sufficient, even though at the time I had been an entrepreneur for nearly ten years, but I had never had to go out and raise 20, 30, 50 million at a time. So I went out to find somebody. My CFO was a Christian brother and he was a banker, and he was about to start his own business as a banker. And I said, Listen, why don’t you join me and be a co-founder with me? You understand money? You know how to negotiate with banks. I’ve never done that before. Not at this level. So I did it with people. It was the other P. It’s the P for people. So you pull in the people. You pull in the people and those people. In this case, he happened to be a Christian. It doesn’t have to be as long as you had common values. You have values of integrity and you can work with people. So you open up your business to the second P and the three are in come mesh. So there’s no even if you’re building a church. Okay. There are many great evangelists who never or pastors who don’t build big churches. All they have to think about is my three Ps. They don’t have to think about the product because the product is Jesus, and that’s the best product in the world. Okay, but if you don’t have good people, you want to know the Bible says about this. Go and see what Jethro said to Moses. The whole management philosophy of how you run a big organization was laid out by Jethro to Moses three or 4000 years ago. He said, Look, Moses, you got to learn to delegate. You got to find the right people. You’ve got to delegate. You’ve got to allow them room to operate. You’ve got to give them good policies as the leader. Okay. They’ve got to have a clear vision of where you want to go. We didn’t invent. Delegation was done by Moses and Jethro because Moses couldn’t organize himself. He had just been out there as a shepherd. But Jethro laid it out for him, says Moses. how it’s done. Otherwise you’ll tire yourself. Okay. So if you’re tired, if you’re a pastor or you’re an entrepreneur and you’re always tired at the end of the day because you don’t know how to delegate. You don’t know how to find the right people to delegate to and trust them to get the job done.

Henry Kaestner: I’m reflecting on that framework and the principle of delegation. And I’m also thinking about how you’ve been so generous, not just on our podcast, but in a way that you’ve been able to pour into a younger generation. Again, when you have that many followers on Facebook, you’re clearly reaching a younger generation to help instill some of these principles and are providing them some level of mentorship, some leadership. And I know a bit that you’ve looked to some leadership yourself over time, and I know that Andrew Young, for instance, is a mentor. Can you speak a little bit about the roles of mentors that you’ve seen in your life and how you think about that playing out in the marketplace or just in life?

Strive Masiyiwa: Well, you know, what is core in mentorship for all of us, you know, is don’t approach it like you’re in a cafeteria, you know, trying to pick fish or chicken. What shall I eat today? You know, what is important, first and foremost, is you must be anchored in the core doctrine of Christ, because people, even great people, can fall over sometime. Okay. And you’ll find yourself out and see. But you are going to have people on your journey, okay? And some people will come in almost like actors on a stage because you’ve got stage fright. Okay. And some are there for the journey of life. Andrew Young turned 90 this weekend. We celebrated him at 90. I met him when I was, I guess about. 35, 36, something like that. And he asked me to help with something which required me to stop, to spend time away from my business and travel with him. Speaking to young people across Africa for an American funded venture capital fund. Young entrepreneurs. I was one myself, but I was considered successful. So the money wasn’t for me. It was to help him get this money out there. We traveled a lot and one day, you know, I was sitting with him on a plane and I reached out into my jacket and I pulled out my little Bible because we didn’t have computers in those days. And he said, You know, that I trained in the seminary. I’m reverend Andrew Young. And he says, I haven’t had a young man pull out a Bible like this. So what are you reading? So we went through it and that became the anchor of our relationship, you know, literally for the 30 plus years. We have a chat about what’s going on in Africa. He says where are you in the word of God. And I love that. And he loves it, too. So you need people like that.

Ndidi Nwuneli: I love that story. And, you know, one of the things I think when I think of you is you give your time, your talents and treasure. And giving has been a core value of yours through the Higher Life Foundation, but through so many other initiatives. How do you inspire the next generation to give as well as you mentor them?

Strive Masiyiwa: You know, when I started my business was 1986. That was when the HIV pandemic broke out. We didn’t know what it was. I run a construction company, and every week I was burying somebody. We didn’t know what this disease was, but I noticed that being in the construction industry, a lot of my low income workers were leaving young children. And. I couldn’t just bury them. And leave the children. So I started a program. To pay for the school fees of the children. I wasn’t married when I got married a couple of years later. I told my wife about this. She was fascinated that I had a program where I funded about a hundred children. To go to school, just paid their school fees every term. And she said, you know, she wanted to get involved in it and she’d actually like to run it. I said, Fine, you know, so that’s a good deal. Should I get the money? You run it. Let’s expand it. So here we are, kind of, I don’t know, 25, 30 years later, we call it the Higher Life Foundation because God has blessed us along the way. We could expand that. We are sent to schools some 250,000 kids in that time. We have thousands of graduates at all levels. We have kids even in the United States at the moment. At any given time, we have about 50 or 60 kids in the US. It’s a great system, it’s a great education system. And particularly when we have very bright kids, we can partner with the universities. So we’ve partnered with universities like Morehouse College, Yale University and New York and so forth to send our kids there. So the greatest philanthropy is education. You know, when all else fails, you want to be a philanthropist one. You don’t believe that. You have to wait until you’re a billionaire before you’re a philanthropist. That’s a misnomer. I’m not a Christian philanthropist. You start today. And as I’ve always said, I don’t give in order to have. It is the other way around. I have in order to give and that is scripture. If you go to I believe it must be two Corinthians chapter, nine verse about nine and ten, somebody correct me. It lays out why you would have to have seed in your hands so that you are never left in a position that you can’t help. But then we narrow where we want to help. Africa is an amazing mission field to help. Everywhere we turn, we have an opportunity. What an opportunity we have. The opportunity to be able to be a vessel to help others. So if my business exists, let it exist for that. Not the other way around.

Ndidi Nwuneli: I love that. I have two other questions. I’ll just ask them quickly. One is, I once heard Elizabeth tell a story, one of your daughters, about her birthday. I think she was seven. She asked for a big birthday party unless she got to the venue. It was all children. She didn’t recognize children from motherless babies homes that have been invited to this party. And that was her early introduction into philanthropy and giving. And I just think you and this is am have a phenomenal philosophy on how you engage your children in your faith, but also in your work. Can you speak to that? So as our listeners think about raising children who love God, who love humanity, who serve God, who serve humanity. How have you been deliberate about that?

Strive Masiyiwa: Now, thank you so much. You know, my wife, when she was running the program, she used to meet all the kids every single year. We couldn’t do it now because it’s just too many kids. But she there was a time when business was very small and she used to organize these events where she’d call them history maker events, where the children were brought together at a college forum to spend a week with her. And she wanted then to reach out and to believe that they could be history makers, that one day they would be President Roosevelt. Okay. That a disability or a parent missing or anything like that does not stop you becoming what you set out to do. it was on these occasions. And she was there, and there were a group of nuns there. And they came and they said, Mrs. Masiyiwa, you know, we have a two year old here. And my wife said, but, you know, we said the kids should be a lot older. They said, well, this little boy, we brought him for you, and she just took him and brought him home. And he’s our son. And you know, some of my daughters love their brother, who’s about six foot three, you know, eats all the food here. But it was so important for them. And these are barriers we must break through all of us, because people say they don’t want to adopt. So we adopted in order to break that. No, no, you adopt. He was just we took him there. You know, that’s my son. And so our kids, we taught them, for instance, that Christmas is not about gifts for you. It’s about a gift for somebody else. So you give them each money and you say, go out and buy a gift for somebody else, and you’ll only get a gift when you have a gift to give. So they zip through their little gifts. Okay. And they look at this. Sisters and brother in the hope that, you know, you really remembered me because I remember you, you know, and these are little principles, but they’re core to how you break through to the ability to get.

Ndidi Nwuneli: Thank you so much for that. That’s so powerful. My last question is, what is God telling you about Africa and Africa’s future? What is the word that is placed in your heart for such a time like this?

Strive Masiyiwa: Well, first of all, you must always have a perspective of history. Okay. Because we can see events around us and believe that this is only us. Since the age of the church. When the Holy Spirit arrived at Pentecost, there have been many pandemics, sometimes wiping out half populations. So because we have seen a pandemic today, we mustn’t behave as though this is it is the end of the world. I’m sorry. It isn’t. It’s the same with war and conflict. But what is important is to be always relevant. Relevant! Okay. There are no moral equivalence. You can’t say, hey, why are you caring about Ukraine? You didn’t care about Ethiopia? No, we always. We care about everybody. I am fasting today. I just broke my fast. Okay. I am fasting over the conflict in Ethiopia and I am fasting over the invasion of Ukraine. Because this is the most powerful thing I ever do, which is to respond to an issue from a spiritual perspective. So once I positioned myself like that, I’m saying, God use me. I fasted and fasted over the pandemic. And then I took a call from the president of South Africa one day says, I’m putting you in charge of Africa’s response to this pandemic. Okay. I knew I could do it because of where you start, how you position yourself. But don’t expect that you’re going to be used because, you know, you just really don’t care about it. You’re you can’t afford to miss a meal. You know, we should be deeply concerned. So as Africa is part of the world. It is part of the world. It’s not an exotic place. It is part of the entire world community. So it’s not about having a prophetic message. I am not a prophet. I leave that to those who sit in that ministry. But we have challenges. We have to address them and we address them through the next generation as much as the present.

Ndidi Nwuneli: That was phenomenal. Positioning yourself to hear from God to the use of God. Thank you. Thank you for inspiring us today. Thank you for your work. Thank you for your faith. And thank you for being a shining light and a hope for my generation. Henry, do you want to close us out?

Henry Kaestner: Strive I’m just very grateful. I think that one of the things that Ndidi and I had wanted to do through this podcast, which bridges some number of folks from the West who have followed our other programs in the past is to give them a re-imagined vision of the opportunities in Africa. And we have a sense of that. You know, clearly you’ve been able to show through your leadership about thriving business, but you’ve left us with something far greater, which is just the spiritual underpinnings of an economy and a culture that’s focused on God. And I’m just grateful for the fact that you spend time with us. You’ve got lots and lots of folks that look to you for inspiration, encouragement, and I’m grateful for you to being able to do that with our very small audience. And our hope is that God will use that. Thank you for having blessed me and all of us.