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Did You Get The Memo On Money And Financial Empowerment?

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John Hope Bryant, Financial Empowerment

With John Hope Bryant, Author, Founder, and CEO of Operation HOPE

Only A Few Of Us Got The Memo Explaining How Society And Money Really Work

John Hope Bryant is an author, entrepreneur, and activist who is passionate about spreading financial know-how and helping people understand and reach their definitions of success and wealth.  He has a new book coming out in September 2017 called The Memo, and Steve opens their conversation by asking what is “the memo” and who didn’t get it?  Bryant’s response is that the vast majority of us—325 million out of a total population of 350 million in the US—didn’t get the memo.  He goes on to describe the memo as “everything the world never taught you about how power, money, and success work in this world.”  This knowledge is not found in a book or in universities, and it’s rarely found or passed down in families.  It can be broken down into 5 big laws that Bryant claims he’s learned as he arose from nothing and built himself into something.

Wealth And Poverty Are About More Than Money

Steve describes these laws as mental habits and wonders whether they only apply to our personal economic futures.  Bryant concedes that his publisher, knowing that there’s a large audience for financial self-help, suggested framing the book’s arguments in terms of 5 laws for “your economic liberation,” but he argues that the life lessons he hopes to impart span more than conventional definitions of money and wealth.  He asserts that wealth has little to do with money and that half of poverty (or a lack of wealth) has to do with poor self-esteem and poor self-confidence. Bryant notes that, contrary to our own idea that it is a form of money, the word “capital” comes from the Latin “knowledge in the head.”  Thus, wealth begins in the head and, by a kind of chain reaction, travels to your heart and soul and from there into your hands and feet, which refers to what you’re doing and where you’re going, and then finally ends up in your pocket as money.  The process often requires changes in one’s head or heart, and smart, hard-working people often get stuck on the treadmill of trying to accumulate enough money to transcend their financial circumstances without results. This is because, according to Bryant, they haven’t “received the memo” about how society really works, how capitalism works, and what they need to do to work in the system.  The memo alone, with few exceptions, can catalyze needed head and heart changes.

Relationship Capital A Major Ingredient Of Success

One of the core rules defining the scope of Bryant’s memo is that relationship capital is half of all the capital in the world.  He uses the example of choosing to attend Harvard University over some much cheaper state university.  He contends that differences in quality of education and the market value of diplomas should be thought of as less important than the value of access to a peer group of classmates that can provide crucial contacts throughout life.  In this instance, the relationships one might make with fellow Harvard grads during and after college enjoy a significant premium over less prestigious schools.  Whether this justifies paying four times the cost of tuition of the state university depends in large measure on how well you utilize your membership in this informal club of Harvard alums.

Capital Starts In Your Head And Makes Capitalists Of All Of Us

Steve asks how the rest of us—those who can’t tap into the elite social world of a Harvard—can build social or relationship capital.  It begins, Bryant says, with recognizing that you are capital and, because you embody human capital, you’re also a capitalist.  Across all types of occupations—from working at a GM plant to cutting hair and a million other possibilities—you are trading your skills, talent, and time and that makes you a purveyor of human capital, and you a capitalist.  Given this reality, Bryant encourages people to embrace the free enterprise system, as this will, in turn, change your mindset and that will eventually change everything in your life.

The Freedman Bank Experiment

Bryant detours into a story about how Abraham Lincoln helped establish a bank known as Freedman Savings Bank after the Civil War to help newly liberated African-Americans open savings accounts and learn about money, investment, and development in order to participate in the free enterprise system.  The bank was largely successful in its educational mission, but made some lending missteps, and was closed down before it reached 10-years old.  Bryant’s point is that the founders of Freedman Bank wisely attempted to fill a critical gap by offering guidance and financial literacy that was not only relevant to freed slaves after the Civil War but could still be so today to a great many Americans.  In our present educational system, home economics has been phased out and relevant financial skills are not being taught or passed on.

The Costs Of Socially Reinforced Financial Illiteracy

As an example of how financial knowledge is manifest in everyday life, Bryant talks about how average credit scores—to some real degree a reflection of financial knowledge—predict wealth at a neighborhood level.  Demographic and other differences correlate to credit scores to such an extent that you can say an average 700-credit score neighborhood will have certain education levels, home prices, and lifestyle amenities, while 500-credit score neighborhoods are marred by crime, high dropout rates, and even riots.  This goes beyond money and the what it can buy to encompass things like upward mobility, optimism, and confidence, as well as their opposites.  Bryant extends the argument by describing how minorities, in general, have fared poorly and been left out of the free enterprise system thanks, in part, to legislation over the years which discouraged their education, resulting in a population with low access to information, low self-esteem, and low levels of entrepreneurship.  Most of those who are successful enough to overcome the economic barriers do so in sports, entertainment, or performing arts, leaving vast numbers behind.  A substantial number improve their lot by working for local and federal government, but those occupations don’t bring job creation to neighborhoods in desperate need of it.  Bryant suggests that while minorities have been brilliant at surviving under harsh conditions, they’ve done much less well at thriving.  To reiterate again that this isn’t all about money, Bryant mentions that his favorite chapter in The Memo is the final one about spiritual wealth.

Operation HOPE Aims To Provide Financial Empowerment To The Masses

A crucial question to ask yourself is what are you doing beyond work and beyond the day-to-day of paying bills to leave a legacy.  Everyone wants the world to know that they were here, and it’s important to always remember that daily life is not a dress rehearsal. Donating even a small amount of your time to charitable causes is actually a way to give yourself a gift.  Apropos this point, other than his book writing, Bryant talks about the work he’s been doing to make financial information and advice more accessible through his Operation HOPE organization.  His goal is to “help finish what Abraham Lincoln started with Freedman Bank” by opening a thousand branches of the “Hope Inside,” a “financial empowerment and dignity program” in partner locations of banks, grocery stores, colleges, city offices, police departments, hospitals, etc.  The idea is to reach people in places they are already frequenting and offer free financial coaching and other resources.  One-on-one time with a Hope Inside counselor can empower people to tackle problems around money that they’re stressed out and confused by, to better plan for life’s phases, and, ultimately, to realize their higher aspirations.

Hope Inside’s ambition is to raise the credit scores of its clients to an average of 700. A sister program takes financial empowerment education into schools for children between 4th and 12th grade, and they’ve already partnered with 4000 schools.  Bryant proudly admits that he’s a dreamer, but adds that he’s a dreamer with a shovel in his hand.


Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital.  Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.  Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances.  The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.

Read The Entire Transcript Here

Steve Pomeranz: Once in a while in the world of business someone rises to the top, not based solely on dollars, but on ideas.  My next guest is such a person.  His name is John Hope Bryant and if you haven’t heard of him yet, you’re in for a treat.  I was treated to his ideas in 2014 when I interviewed him about his book, How the Poor Can Save Capitalism, and I’ve been following him ever since.

He has a new book coming out shortly.  Let’s meet him and hear what it’s about, and what he has to say.  Hey John, welcome back to the show.

John Hope Bryant: Hello, hello, John Hope Bryant here, an honor to be with you, Steve.

Steve Pomeranz: Nice to talk to you again.

So, you’ve got a new book coming out, The Memo, and what is The Memo and who didn’t get it?  Who didn’t get the memo?

John Hope Bryant: Well, probably five out of seven billion people on the planet and probably 325 million of the 350 million people, at least by the census, that are in the United States, which is the majority of everybody, didn’t get the memo.

The memo is everything the world never taught you, about how power, money, and success works in this world.  It’s not written in a book anywhere, you don’t get it from a university, if your parents didn’t have it they can’t pass it down to you.  In a blind town, a one-eyed man’s king.

You don’t know better, you can not do better.  It is not structured anywhere.  But it is everything really about how the world works.  There’s five big laws that I have learned over the course of my life, coming from nothing and building myself into something.

Steve Pomeranz: All right, so these are mental tools that each one of us can use to improve.

Is it only about our economic futures?

John Hope Bryant: Well, I think that my publisher, rightly so, coined this five laws for your financial liberation because they know that people are interested in their money.  But really wealth has nothing to do with money, half of all poverty and wealth is low self-esteem and lack of confidence in yourself, half.

The other half is—you remember this on the poverty side from How the Poor Can Save Capitalismis crappy role models and a crappy environment and crappy self-esteem and crappy self-confidence, leading to a horrible sense of hope and no opportunity.  You flip that and that’s wealth, so capital, I say this in the first chapter of the book, capital comes from the Latin root word capitis, which means knowledge in the head.

So even capital, Steve, has nothing to do with money.  But if you want to become wealthy, you start with your head.  You then translate into your heart and your soul, it goes into your hands and your feet, which is where you’re going, what you’re doing and that translates into your pocket.

Put it another way, if I give a homeless man a million bucks, he’ll be broke in six months.  Because nothing changed in his heart or his head and there’s a lot of struggling online pharmacy no prescription needed hydrocodone families, middle-class families listening to your show right now, who are working their tails off. And who believe they’re smart and believe that they’re brave, and they’ve got all the tools.  And they can’t figure out why they can’t get ahead and why they got too much month at the end of their money.  And it has less to do with their pure money decisions and how much money they’re making, and much more to do with the fact that they never got the memo.

Steve Pomeranz: All right, so the idea here is that nobody prefers poverty to success.  This invisible class you talk about is not stupid, they just don’t know what they don’t know.  And that’s the memo that you’re talking about they never got the memo on how this society works, how capitalism works, and what they need to do to work in the system.

John Hope Bryant: Correct, let’s give an example.  I know at this point your listeners are going, okay, but what’s a practical thing I can connect here to what this guy is saying, okay?  Half of your life, half of all capital in the world is relationship capital.  So, why does somebody go to Harvard?

Is Harvard a good university?  Sure it is, is it really smart?  Sure it is.  But do you pay four times as much to go to Harvard as you do to go to say a state college because you’re going to end up being four times as smart when you graduate?

The answer is no.  You pay four times as much, Steve, so that you’re part of the club.  [LAUGH] Because when you graduate from Harvard, that graduating club is going, that class of 2018, is going to hook each other up for the rest of their lives.  It’s an informal club.

And that’s just one example of relationships, you know you don’t do anything that’s important off of what you and I growing up called the phone book, through what people now call an Internet search.  If you need surgery for a loved one, you don’t get that off the Internet.  You call a friend and say, “hey, I know that you had surgery five years ago for one of your children and I have a child that needs blah blah blah.”

Who do you trust?  Who can I call?  It’s everything in our life; so, yes, so it’s important that you’re smart, and all that kind of stuff.  But you have idiots and fools running countries and companies and brilliant people who are homeless precisely because it’s not just about how smart you are.

Steve Pomeranz: All right, not everybody’s going to be able to go to Harvard and tap into that elite system.  So how does one develop this social capital you’re talking about for the rest of us?

John Hope Bryant: So, the first thing you need to understand is that you are capital, that’s the first thing.

Human capital, so you are a capitalist.  If you’re working for Steve’s broadcast company, right now, your producers, whatever, your interns, you’re a capitalist.  And you’re working at GM plant, you’re working at a Walmart, you are trading your talent and your time and your skill for a paycheck, that’s human capital and you turned yourself into a capitalist.

Your nail technician, ladies, is a capitalist.  The guy who cuts your hair is a capitalist.  So, we have rejected capitalism as if it’s some evil foreign thing without realizing we’re all living in this system.  And us not understanding it is an imprisonment of ourselves in a system that is all around us.

So you live in a free enterprise system, embrace it.  [INAUDIBLE] which means changing your mindset, will change everything in your life.  And then, of course, then it pivots naturally into relationship capital.  But when I go into the whole thing about your capital not getting the memo, I start with the Freedman’s Bank story.

And while it was a story about former slaves and Abraham Lincoln, it applies to everybody.  Like, Abraham Lincoln thought, and if you know this story, Steve, from our last chat.

Steve Pomeranz: Yes, I do know.

John Hope Bryant: Yeah, I go into great detail in this book.  Abraham Lincoln thought the most important thing he could do after the Civil War, after the Emancipation Proclamation, after he set everybody free, was to create a bank called the Freedman’s Bank, to teach freed slaves about money and to bring them into the free enterprise system.  He was killed a month later, Abraham Lincoln was.  Nobody even knows the bank ever existed.  But it was located right across the street from the White House, which shows proximity to power, how important that bank was.

And as I think you know, Steve, I went and got the administration last year to rename the building, the Freedman’s Bank Building.  Which if your listeners search it today will see that today, after 151 years it is now called the Freedman’s Bank Building.  But that memo of not getting the memo on how money works, how free enterprise works, how job creation works, how capitalism works.

All that stuff was never taught to anybody.  We don’t get a course on financial literacy in school.  Home economics doesn’t exist anymore, right?  Nobody’s taught how the systems work.  Here’s a mind blower, Steve.  I don’t know where most of your listeners are, but if you just did search around this country where your listeners are and about where most of them are concentrated, I’d ask you to give me that map and I’ll lay over a credit score.

And I’ll tell you where your poverty is, I’ll tell you where your middle class is, I’ll tell you where your wealth is.  I don’t even need to go there because a 500-credit score neighborhood, here’s the memo, is going to be where all your riots are, and where all your homicides are, all your drop outs.

By the way, white and rural, and black and brown and urban, so it’s not racially based, at all.  This is a math class.  In your 700-credit score neighborhoods, are going to be where your middle class is, where your tax base is, where all your voters are, where your upward mobility is, where your optimism is, where your hope is, where your confidence is.

See, this is like the movie The Matrix, it’s like the movie Lucy, like the red pill or the blue pill.  It’s just looking at the world through a completely, radically different lens, but it’s all just common sense.

Steve Pomeranz: Bringing it down to the street level.  The Freedman’s Bank was created, and yet that message hasn’t really filtered down over these many decades.

Where do we-

John Hope Bryant: No, you’re being kind.  No, no, it’s just the opposite.  Blacks were restricted from reading a book, from learning, from education, for 200 years almost.  And then after that, there were restrictive laws that were commercially applied called Jim Crow laws that led up to 1970.

And so you have people who are functionally illiterate, who have crappy self-esteem, that they were told they were nothing for 300 years.  Who have crappy role models in a crappy environment and nobody in their neighborhood owns a business, started a business with an entrepreneur.  I didn’t even know what the word entrepreneur meant when I was growing up.

No one ever even used the word in my neighborhood.  And so, you model what you see right?  So, if all I see is drug dealers, guess what I’m going to be?

Steve Pomeranz: Right.

John Hope Bryant: But, by the way, you can be a wonderful person and have a job at the city of Detroit.

But if all your kids know is their mom and dad are working in the city of Detroit, where are the kids going to go to work?  The city of Detroit, so you have nobody who’s in the job creation business in inner city neighborhoods, so look at society today, Steve.

You have 35 million black people and brown people, just one little subsection of our society, who really are largely outside of the free enterprise system.  Really, unless you’re a ball player, unless you swing a bat, rock a mic, bounce a ball.  Unless it’s sports, entertainment, or the arts, where the rules are published and they playing field is leveled, where we can succeed because either you passed through the finish line first or you didn’t, these other places where free enterprise reign.

Not because we’re not dumb or stupid, it’s not because we’re dumb or stupid.  No, just the opposite.  We’re brilliant, but we’re masters of surviving, not thriving.  So, here’s an entire group of people outside the free enterprise system, and what does that create?  Ferguson, Missouri, riots in Baltimore, poverty-stricken neighborhoods. You hang around nine broke people, you’ll be the tenth.

And now middle-class America is starting to feel the same way.

Steve Pomeranz: Yeah, all right, well so due to lack of time, we need to talk about what you’re doing currently.

John Hope Bryant: And, my big mouth.

Steve Pomeranz: [LAUGH]

John Hope Bryant: [LAUGH]

Steve Pomeranz: So, what are you doing these days to fight this issue and to bring awareness, besides The Memo?

John Hope Bryant: Yeah, and, by the way, the last chapter of the book is spiritual wealth which is my favorite.  Which brings it back around I think to the things that are most important in this world.  And why I do the work that I do.  I think they we’re sitting in a moment in history right now, Steve.

But I think history never feels historical when you’re sitting in it; it just feels like another day.

Steve Pomeranz: Yeah.

John Hope Bryant: And the question to your listeners is what are you doing beyond going to work every day feeding your children and meeting your daily requirements?  What are you doing to leave a legacy?

Because there’s no dress rehearsal, this is it.  And everybody wants to leave a legacy.  Everybody wants the world to know that they were here.  What I’m doing, and they can join me as a volunteer in Operation Hope or join another community group.  Give them 10% of your time wherever you live, you’ll be giving a gift to yourself actually.

But we have now made a commitment to finish what Abraham Lincoln started with the Freedman’s Bank.  And that’s a thousand Hope Inside locations inside of bank branches, grocery stores, big box retailers, government offices, and a range of other locations.  And since I’ve talked to you last we have orders now for 425 locations.

And we’re at the 10% [INAUDIBLE] branch network.  We’re 10% of the First Tennessee Bank branch network, we’re 10% of the One Web Bank branch network.  We’re at Whole Foods; we’re at Hyatt Hotels; we’re in a couple hospitals.  I just got Delta Airlines to say yes last week, for their employees. This is financial well-being, financial wellness.

This is your personal dignity because people are stressed out, they don’t want to admit that they’re stressed out about money and they don’t understand it.  And so these are free financial coaches in my location, that help to get your credit score to 700 from wherever you are to where you want to be in and then set your aspirations free.

We’re doing this at scale across the country for adults.  And then we’re going in the schools which I’ll talk to you maybe in the next time we get together, to tune up a whole generation of builders from 4th through 12th grade, and I’m in 4,000 schools so far and counting.

So, yes, I’m a dreamer, Steve, but I’m a dreamer with a shovel in my hand.

Steve Pomeranz: John Hope Bryant, dreamer, author of The Memo coming out when?

John Hope Bryant: September 2017, Berrett-Koehler Publishing.

Steve Pomeranz: Very good, John, another time we’ll catch up, we’ll check in with you in another six months or so, thank you so much for joining me.

John Hope Bryant: Thanks for all you do.