Taking Steps towards Building Wealth

I should have titled this article “10 quick ways to build wealth” to get your attention. On second thought, I realized that I, too, had browsed through more ‘wealth’ articles in the past than I care to admit and they all left me with an unrealistic pie-in-the-sky hope that only got worse over time. Well, I’m not here to dangle a make-belief carrot in front of you, but point out areas that you might have, unbeknownst to you, been walking in the opposite direction of wealth.

For starters, wealth is defined as an abundance of valuable resources and material possessions. That immediately tells me that there’s an accumulation that needs to take place to reach the level of abundance. Intuitively, we can also agree that the more effectively one can reduce areas of waste or eliminate things that expend our resources unnecessarily, the faster we can accumulate wealth.

BUILDING WEALTH OVER TIME

Not to sound too cliché, but I must remind you that the journey of 1000 steps starts with the first step. Some might step faster than others by figuring out efficiencies hidden in taking those steps while others may just focus on eliminating running aimlessly in one spot or around in circles. How many times have you held your breath for a too-good-to-be-true offer? Or intensified your focus on playing the lottery while neglecting other responsibilities? Or even indulged in a few luxuries because you’re expecting your tax refund or just your paycheck? You tell yourself that you ‘deserve’ it. Either way, nothing beats moving in the right direction on a daily basis.

I come from an immigrant family and while I am a US citizen and have called the US home for about two decades, I will never forget my initial observations in the first neighborhood my family moved into. In the affluent Highland Park enclave in Dallas, it was clear to me that even the so-called old money used wisdom to retain their wealth and keep it in the family. They kept up with laws that could affect their wealth accumulation, talked of future deals that would ensure continued wealth, and took losses in stride by learning from, not dwelling on them. In sharp contrast, my teenage friends lived in excess and I told myself repeatedly that I must not get used to those luxuries. In counterpoint to the excesses I and my friends enjoyed, I could clearly see the sacrifices and wise choices the parents and grandparents of the rich had made and were still making regularly.

We’ve all heard that building wealth takes time but I don’t want you to miss the wisdom nugget here. Become intentional with your actions and choices, even small ones, as they form steps in the right direction. A wise man leaves an inheritance and a great legacy for his children’s children. Think long term. Make the right choices daily. Practice delayed gratification…no one has ever died of it. Remember, you don’t deserve it NOW…you don’t deserve to continue like this.

DILIGENCE IS KEY

Excuse me for yet another cliché. Anything worth doing is worth doing well. It goes without saying or so we say but do we really practice this? Diligence is simply careful and consistent work. In other words, do things conscientiously and in excellence. Let’s face it; to be consistent in anything you need a clear vision and a sense of purpose as to why you are involved in that work or effort. I think I can help crystalize our formula for building wealth (implied from our wealth definition stated above). Building wealth = Increased Income + Decreased expenses.

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I will focus on increasing income in this wisdom nugget. In a nutshell, increasing income comes from providing a solution to problems around us. We get paid to think and to do….to add value. All things equal, increasing your education helps you increase your income. Also, valuing and nurturing relationships can yield dividends when increasing your income. When I speak at seminars, several people ask me what investments or real estate would make them the most money, the fastest. And my response to residual income questions is always so disappointing to them. You need the diligence to keep at any of the ingredients listed above to actually see significant successes. You also need to accumulate disposable income (can we dare to use the S word here? Save!) in order to invest for residual income to materialize. Go for substance. Enjoy the journey as you grow in diligence. I meet folks with multiple advanced degrees and when I try to get them to discuss or show off their acquired knowledge, they go fat on me. Upon probing, they tell me they barely made it through their degrees and that they are excited they at least have those certificates. What good is a piece of paper if you cannot contribute to a conversation on topics related to your field of study?

LEARN A THING OR TWO FROM THE ANT

Ants plan ahead. Period. And they are better for it. I promised previously to touch upon decreasing expenses. Well, here it is: Planning costs less…way less in most situations. I know you’ve heard it before but just in case you’ve had an excuse for every time prior to now, this one’s for you! I cannot stress the importance of budgeting. Yep, I said it. A budget is simply a spending plan. All research has shown that when you plan your spending and try as much as possible to keep to it, you almost always spend less. Conversely, when you don’t keep track of your spending, you end up feeling as though you’ve been a victim of identity theft. This would be a good place to mention that our spending habits have a lot to do with our emotional attachments and past experiences on money and finances. So I usually take more time to cover this area as it is easier said than done. However, with determination and addressing underlying emotions, I have seen the worst money managers turn into prudent spenders. I have seen planning pay off in small, unexpected ways. When I travel with friends for conferences, vacations, etc. I fly in on a direct flight and pay tens and sometimes hundreds of dollars less than I would have by saving and buying early. I qualify for higher loan or credit card amounts, with less finance charges and reduced monthly payments just by maintaining a good credit history. Not having a spending plan is costly and it translates to not being able to reach your full potential because of temporary whims. So what is the wisdom nugget here? On your journey to building wealth, focus on needs and not wants so that others don’t take advantage of you. Don’t help others build their wealth by paying more…plan ahead!

How to Listen, Learn and Adapt

In today’s world we listen more than ever before. We are often bombarded by numerous sound bites everywhere we go: social media clips, television series, news feeds, music, radio, social conversations, formal group and classroom meetings, etc. Even in reading, we hear as we internally listen to words. We need to become more aware of this activity we often engage in throughout our lives. We’ve all heard the sayings: seize the day and make every day count…well, we should rephrase them to: seize every listening opportunity and make every listening count!

LISTEN

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Most of what we do with our ears is hear; listening is more intentional than just hearing. We listen at a much faster rate (about three times faster) than the person speaking, and even more so when internally listening while reading. So what do we do with all this extra time? Our minds tend to wander and we are tempted to multitask. Being aware of your listening is the single most important part of listening. Intention, motivation, and interest are critical and also help you listen attentively.

These elements of listening are more easily applied when consuming light news and humorous content found on social media, news feeds, and television. However, when we listen in other situations that are more personal and consequential to our lives, we need to ensure that these elements are sustained at all costs. Unbeknown to us, our perception and harmful thoughts such as fear, selfconsciousness, etc. cloud our listening and greatly reduce our concentration, information actually taken in, and any chances of recalling the information when needed. This phenomenon is known as interference theory. Interference theory occurs when an interaction between new material and transfer effects of past learned behavior or experience comes to bear. Negative memories or thoughts hinder the comprehension of new material. As an adjunct professor in CUNY, I come across students who exhibit anxiety while on the listening end of communication. They express a trait known as Receivers’ Apprehension which is fear of misinterpreting, inadequately processing, and not being able to fully adjust psychologically to messages we listen to.

When I talk to students about some of the visible anxiety they exhibit in class, they almost always mention negative thoughts about learning that goes on in their minds while listening to new information. The irony of it is that allowing those thoughts of ‘Will I understand this?’ and ‘Am I going to be a failure?’ makes up the bulk of the reason why their listening is grossly incomplete. It is then diffcult to retain information that was never received accurately. For our beneft, we need to continuously practice active listening. Whether in the classroom, at work, at a game show, or at a cocktail or networking party, we need to practice shutting down any self-conscious or other negative, doubtful, and wandering thoughts in order to give our full attention and make our listening worthwhile.

LEARN

 The intention of most of our listening is to learn one thing or another. Learn other’s jokes, or a storyline in a TV series, news around the world, facts about others in order to foster and build relationships, a subject matter in order to be successful in a profession and earn a living, and the list goes on. Learning follows being able to actively listen and it starts with a desire to actually learn. Learning should indeed become our lifestyle if we want to continuously grow in life and avoid stagnation. I maintain that there’s an opportunity to learn in every situation…even in not-so-pleasant ones. Once a person has begun to actively listen regularly, their attention span is increased which means they are able to stay in a prolonged state of focused awareness on certain available perceptual information. A person at this level can then begin to apply the following tips more effectively.

Learning is best tested by how much information is retained or not forgotten. To forget is either failing to store information in the first place (this was addressed with active listening), or not able to retrieve or recall retained information when needed. When storing or learning information, it is important to note that short term memory has a limited capacity and we lose information quickly unless we can shift it into long term memory. In the classroom, cramming techniques might work with simple concepts but information must be learned and fully understood initially with complex topics and then reviewed quickly and repeatedly to improve retention. Memory is strengthened when associated with other familiar or long term memories visually and by using mnemonics.

As previously mentioned, memory has two parts: concentration, and recall. We explained above that our attention is often times divided with the advent of multitasking. Working memory is defned as the ability to remember relevant information in the face of distraction. There is a need to practice improving our working memory in order to get better at multitasking. However, I must add that studies have shown that when we focus exclusively on material we are learning, we stand a better chance at storing the information to our long term memory. We all have learning preferences and everyone should understand how best they learn. A visual learner will struggle if all they have are audio recordings of lecture notes. The time of the day, noise level, and lighting can affect learners differently so take the time to learn what works for you while learning.

Lastly, with improved cognitive functions as you learn wider topics and more complex concepts, work on utilizing (and developing) both the left and right hemispheres of your brain with varying methods. Individuals with dominant left brains tend to be more logic based, while those with dominant right brains tend to be more artistic. Use all of your senses such as writing things down, explaining the concept to a lay person, rehearsing in the mirror, etc. Improve your metacognition which is the thought a person has about their own thoughts. It includes things like self-regulating or monitoring your performance on a given task or learning process. So check your concentration as you learn and take breaks or reset your brain if you feel it getting dull by restating words or testing yourself periodically. 

ADOPT

After taking in information through active and effective listening, and learning new material, the natural progression is to adapt oneself to the learned information. This translates to being able to confdently explain to and teach someone else, applying information learned to successfully perform on the job, and sustaining a lasting behavior change in any part of life. Adapting is rooted in ‘doing’ an action and as they say, the proof is in the pudding.

Neuroscientist, Dr. Caroline Leaf states that behavior starts with a thought. Thoughts stimulate emotions which then result in attitude and finally produce behavior. We started with the effects of thoughts and perceptions during listening and have indeed come full circle as they also greatly affect adapting our behaviors. Multiple studies and research by other neuroscientists (Dr. Marion Diamond; Dr. Candace Pert) explain that the body and mind function as a single psychosomatic network which make up information molecules that control physical and mental actions. This link between the body and mind is fascinating and corroborates behavioral studies of the 1970s.

These biochemicals or “molecules of emotion” help form our memory networks or “magic trees of the mind”. Before you can think yourself through adapting positive behaviors, let me paint a clearer picture of these thought pathways. When you frst start to develop thoughts during listening or learning by building memories, a part of your brain called the hypothalamus (H) is activated. As with apprehensive listeners, feeling a jolt of fear means H secretes negative emotion hormones CRH and ACTH which then release stress chemicals cortisol and adrenaline. In a chain reaction fashion, cortisol and adrenaline race through the body causing immediate high blood pressure and heart palpitations. They further travel to the brain’s nerve cells causing memories to literally shrink which affects the ability to remember information or even think creatively. Does this sound familiar? Think of individuals with receiver apprehension exhibiting anxiety, or individuals that experience test day mind blocks, or even folks with stage fright or fear of publicly speaking (even in small classrooms).

To adapt to any desired change, we must unlearn old negative and doubt ridden thought patterns and begin to relearn new positive and renewed mindsets. Change is constant and inevitable in the information age we live in and we should aspire to drive positive waves of change by becoming change agents…frst in our thoughts and ‘can do’ attitudes. I’ll leave you with this thought: our brains are very powerful and creative and can learn almost anything with time and dedicated practice! Thoughts that foster adapting to and modeling desired behavior does not only focus on past memories as it is not enough to anchor our focus. We must learn to become aware of our present thought patterns and more importantly, focus on our goals and the positive change we want to see. Change can be so small, constant, and gradual that we begin to look like and act like whatever we’ve committed to diligently learn.

About the author: Stacy Chineme Esimai, CPA, CFE, is an adjunct lecturer of accounting and business org. & mgmt. at CUNY’s QCC and a small business owner in Brooklyn, New York where she holds fInancial responsibility seminars and consults on forensic projects among other service offerings. She started her career in Tax & Audit at a leading CPA and has spent several years in forensic accounting. Stacy is a featured speaker on the adult programs and speaker series at the New York Public Libraries. Stacy can be reached at www.elimmile.com.

The Other Accountants: A Look into the World of Forensic Accounting

In recent years, we have begun to hear more about accountants who are brought in on investigations. What type of investigation is that you might ask? When we say ‘forensics,’ are these the type of profilers featured in episodes of Crime Scene Investigations (CSI) that we enjoy so much? While the answers to these questions may seem obvious to some, there are still a few myths about Forensic Accounting that I would like to demystify. There are similarities between Forensic Accounting and the popular crime show in that when we are called in, there are many unknowns surrounding financial crime cases and the proverbial search for the “smoking gun” that quickly ensues. For example, eDiscovery specialists on a Forensic Accounting team are able to recover documents that have been saved to, altered on, or even deleted from your computer. The team is provided access, at the onset of an investigation, to various technological devices. Imaged hard drives including email inboxes, desktop computer files, mobile phone messages and media, and information from other electronic devices, are meticulously combed through for evidence. This article will take a deeper dive into the work of a forensic accountant and what it will taken to start a career in this field

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The work of a forensic accountant helps companies to combat fraud and other financial crimes including corruption and money laundering. Our services are often solicited reactively in situations where there already exists an alleged wrongdoing. As such, these requests are often accompanied by an atmosphere of crisis. In high-profile cases, external attorneys, government investigators, and regulators are also involved. Company executives and their general counsel can also bring us in to help unravel a series of events for internal investigations in less high-profile cases. Interestingly, a growing number of organizations proactively solicit our services. These companies recognize the need to engage us to perform fraud and money laundering risk assessments of the programs, polices, procedures, and controls currently in place throughout their organizations and to make recommendations for revision, improvement, or overhaul in some cases. The idea is to bring us in early as part of their preemptive measures to prevent future cases of fraud, and other financial crimes as figures for waste and abuse could be staggering.

Unlike typical Audit services, forensic work is usually performed under Consulting Standards. Broadly speaking, in Forensic Accounting, we usually do not provide an opinion nor are we advocates for our clients. Instead, forensic accountants are fact finders brought in to help put the pieces of the puzzle together and tell the story of wrongdoing by helping answer mysteries of who, when, where, how, and how much is involved in a financial crime. In addition to reporting our findings and quantifying the financial crime, we also make recommendations during organizational risk assessments involving fraud, money laundering, and other financial crimes and assessment of compliance programs.

I was recently asked, “Do I need heavy quantitative or judgment skills to do the forensic work that you do?” Forensic accountants possess a range of skills set; however, common skill sets include strong analytical skills, good computational skills, relevant industry knowledge, an understanding of a myriad of fraud schemes, and knowledge of applicable rules and regulations. Not too long ago, the forensic practice required previous work experience such as financial statement audits. However, in recent years, rotation programs have allowed new hires to alternate between audit, tax, forensic, and consulting groups in their first two years out of college. Now, it has become clear that these skills can be honed with on-the-job training and professional practice. Currently, in addition to transfers and rotations, internships are available for accounting students. College graduates are also being offered entry-level positions in forensic practice.

While explaining how the world of forensic accounting is hard work and yet very dynamic and widely interesting, it may be helpful to mention, for those considering a career in this field, that some travel may be required. Although I currently do not travel as heavily, I once spent over a year in Europe while working on one of the largest FCPA investigations in history. Even with travel, adjustments can be made to accommodate and nurture relationships while away on travel for work. For me, traveling to a foreign country to interview an alleged perpetrator, going to the SEC offices in DC to review subpoenaed bank account information to trace illicit funds, or reading headlines of my classified project on the front page of the Wall Street Journal makes it all exciting and worthwhile. After all, Forensic Accounting is the “sexy accounting.”

About the author: Stacy Chineme Esimai, CPA, CFE, is a small business owner in New York City where she consults on forensic projects among other service offerings. She started her career in Tax and Audit. Stacy then went on to fight fraud and corruption for several years on both international and domestic accounts with a leading accounting firm. Stacy currently teaches part-time as a forensic accounting professor at John Jay College of Criminal Justice in Manhattan, NY and can be reached at www.elimmile.com.

Sounds like a plan - Akon's plan to light Africa

Avant-Garde Network is at it again, putting together worthwhile networking events for young professionals and entrepreneurs in NYC. This time, it is part of their exciting panel series: Africa 2030. Africa has been dubbed as ‘last frontier’ in the world’s emerging markets. These panels of widely varying topics, co-sponsored by Gobee, are particularly exciting because all eyes (investors, entrepreneurs, and skeptics alike) are on Africa as we march towards an enterprise-led future. On September 23, 2015, we all gathered to a riveting panel discussion on Akon Lighting Africa, as power is at the core of Africa’s imminent development.

Held at the NYC offices of Chadbourne & Parke LLP, and moderated by Ikenna Emehelu, a partner at Chadborne, the event had panelists that included Thione Niang, Co-Founder, Akon Lighting Africa; Dirk Muench, Managing Partner, Persistent Energy Partners, LLC; and Matt Tilleard, Managing Partner, CrossBoundary, LLC. With a popular name like Akon’s (an African native), we were all ready to learn and ask pressing questions on how the Akon team is and plans on tackling lighting Africa. Referred to as the Dark Continent, did you know that more than 50 percent of Africa’s population of 1.17 billion is in pitch darkness and without light? That’s a whopping 600 million people!

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To date, the Akon Lighting Africa team has worked in 15 African countries and counting. Mr. Niang explained that the Akon team first engages with each federal government to understand what their power shortfalls are and discuss expectations in terms of providing electricity to their residents. National budgets for energy and power are then communicated and agreed upon to help scope the magnitude of each project. To build trust between both parties, governments are asked to pick five villages, mostly in remote areas for a test run. The Akon team then deploys resources to install solar panels in public spaces, such as street lights. Solar panels are sourced from Chinese companies and are held in strategic distribution locations all over Africa for quicker deployment timelines of two weeks to 90 days. An interesting fact is that the Akon team trains local young professionals to help with the installation and maintenance of these solar panels. This in turn creates jobs and combats chronic unemployment common among young adults in Africa. For a more sustainable talent pool, the Akon team recently established a Solar Academy in Africa that graduates energy engineers and related human capital.

During Q&A, panelists were asked thought-provoking questions. With a history of lower quality, substandard goods making their way into Africa, Mr. Niang was asked how the Akon team ensures that installed solar panels are of high quality and not intentionally produced to lower standards due to bribery and corruption. He explained that the business climate in Africa is not worse than any other market and that his team takes trips to China to ensure that solar panels offered in Africa are not inferior but rather “the best.” The solar market offers warranties for 15 – 25 years for panels which means power output for panels cannot dip below 80% of rated power until after that time. Much is to be seen as we wait to track the utility and success of these panels over time; we currently do not have the luxury of hindsight.

Mr. Muench and Mr. Tilleard were asked to discuss some of the challenges they face offering solar panels to small businesses and households as opposed to dealing with governments. A distinct challenge at the private sector level is the issue of affordability and non-payment. There is a need to eventually build a history of creditworthiness. In the meantime, solar panels are financed and repaid monthly. Companies such as ones represented by Mr. Muench and Mr. Tilleard have the ability to remotely switch off solar panels for nonpayment and switched them back on when accounts are brought to current status. Another challenge encountered is that energy laws and regulations tend to favor incumbent providers, which are often state or government owned entities. Tariffs for utility kilowatts hours are high and add to overhead costs while stifling healthy competition. Even with these added costs, the alternative costs of buying fuel to power generators, etc. are often higher and environmentally unsafe. Multiple audience and panelists’ comments showed that collaboration is underway to create a forum between incumbent providers and newcomers as an energy exchange provides an eco-system that benefits everyone in the long run.

While Akon’s celebrity brings much needed press to the issue and draws our attention to the ongoing discussion of efforts to solve this problem, Lighting Africa is not an Akon project alone; it is going to be a collective effort over several years with all hands coming together to dwarf this giant problem. Other teams, for example, have researched the problem of lighting at the intersection of engineering, innovation, and culture. One such innovation, the Soccket (under the umbrella of the start-up company Uncharted Play), comes from the collaboration and hard work of Harvard undergraduates and MIT researchers. Harnessing the power of play, soccer balls with charge cells in them convert the kinetic energy stored from kicking a soccer ball multiple times during a game into light energy. We are all rooting for Africa and Africans all over the world. After-all, energy and power are critical to the development of the world’s last frontier.

Stacy Chineme Esimai, CPA, CFE is a contributing editor for Applause Africa (www.applauseafrica.com) and writes about topics that affect Africa, Africans in the diaspora, learning, and personal finance, among other special interest topics. www.elimmile.com; Twitter: @ElimFinance