CONFIRMATORY CASE STUDIES-02
One primary hypothesis in this conversation series has been the possibility of building wealth working as an employee. In our first attempt to validate this thesis, we featured Chief Olusegun Osunkeye, former managing director and chairman of Nestle Foods Plc. He shared the pragmatic strategies he took in building his wealth.
In this second case study, we interviewed a finance tycoon, Tunde Lemo, who left the Central Bank of Nigeria (CBN) as a deputy governor in 2014, after completing his 10 year term. He was a banker that has played successfully in two worlds. First, as a banker of note, having risen through the ranks to become the managing director of Wema Bank Plc. Second, he was pulled from Wema Bank to the apex bank as a regulator. Lemo was appointed Chairman of the Federal Emergency Road Maintenance Agency (FERMA).
Lemo was recently appointed Chairman of Titan Bank. The bank is a part of the the TGI Group, which recently acquired Union Bank. He now consults for corporate and public institutions, shares some strategies he used to build a life of comfort for himself. His note showed how he deployed some principles my Billionaire Friend shared in our weekly conversation. In this interview with me , he explains some strategies that made that feat possible.
Although I do not regard myself as wealthy by any standards, I am comfortable and content with what I have. I did not at any time decide to continue working for others throughout my active life. I started my career in 1985 as a staff accountant in an international firm of chartered accountants – Arthur Andersen. I moved into banking four years later and remained consistent until my appointment into public service in January 2004, after running Wema Bank as MD/CEO for three years.
I am one person who concentrates 100% on assignments given to me, believing that no matter what happens, hard work, honesty and godliness pay, whether you run your own business or work for others. It is fallacious to think you can only build wealth by working for yourself. James Dimon, the Chairman/CEO of JP Morgan, has been in that role since 2005, although the bank is not his. He was appointed like any other employee and is worth $1.4 billion today (about N600 billion). He achieved this by dint of hard work. We also have many other successful professionals today who have built their wealth on hard work. I am not saying ‘stepping out’ to run your business is unwise. You also need to understand that we probably have more people today who have built their wealth working for others than many years ago. This is because compensation globally is more performance-driven today than before.
WHY DID YOU CHOOSE YOUR CAREER PATH?
I cannot vividly remember why I took the decision, but I was influenced by many factors, one of which was my background. I wasn’t born with a silver spoon and I started very early in life being responsible, not only to my immediate family but to my parents as well. The fear of failure was a factor. You may be very good at what you are doing. Your success when you are self-employed depends on many other factors outside your control – the economic climate, etc. You cannot quantify the protection you get from your employers. So many of my friends that veered out early regretted their actions because they ‘saw the real world’ when they were managing their businesses. Some swallowed their pride and ran back to paid employment.
WHAT DO YOU CONSIDER AS SUCCESS FACTORS?
The critical success factors for succeeding and building wealth while working for others are as follows: Ensure there is significant career progression in the employment that you have. Some jobs are limiting. You cannot grow above the sectoral limit, etc. I remembered sometime in 1991, I got an offer to become a financial controller in a company importing and distributing air conditioners. I was offered twice my salary as a banker, in addition to an official car and driver. I turned down the offer because I didn’t see much scope for significant growth in that sector. I was not carried away by the initial rise in income. All I am saying is that you need to be strategic. You need to think long-term. You cannot afford to mortgage long-term career growth for immediate benefits. Besides, you will do well in a very structured environment where the reward is based on objective criteria that are clear and fair to all. The company’s values must be world-class, open and transparent. Otherwise, you will just be gambling, and the consequences may be daring.
HOW DID YOU HANDLE DIFFICULTIES ON YOUR PATH?
There are many land mines in career progression. While your values, which are authentic ingredients for accelerating your career, are desirable, you may also be vulnerable because there are so many competitors who may not be as good as you are but may be desperate. In my career as a banker, I came across many colleagues who were equally upwardly mobile, good and well behaved. Unfortunately, at a particular point, they began to see me as a threat, and their attitudes changed. If you move fast in your career and get promoted ahead of your contemporaries, getting their full cooperation may be very difficult as they may become envious of you. You must beware of ‘banana peels’, intrigues, outright hatred, etc. In our clime, you may become a victim if the Lord is not on your side. I thank God because He protected me throughout those challenging years.
WHAT ARE THE STRATEGIES YOU USED IN BUILDING YOUR CAREER?
Concerning career-building strategies, first, I will say the God factor was responsible for the little I was able to do. Ecclesiastes 9:11 says, “and I look under the sun, the race is not to the swift, the knowledge is not to men of understanding…. time and chance happened to them all”. That aside, you must learn how to save aggressively. I thank God I have a good and virtuous wife with whom we planned that we would not spend our money on frivolities. For instance, I stopped buying cars in 1992 when I was given my first official car. There was no need for unnecessary expenditure. We embarked on aggressive savings and invested in quoted shares and land holdings. These paid off as prices began to rise. Most of the little we have today results from significant capital gains.
PREPARING FOR LIFE AFTER WORK
Preparing for the years after work is for you to realise that you start preparing for retirement from the FIRST salary you collect while working. Many should realise today that they will spend long years in retirement than the number of years they spend working. Most people today do not start a serious career before age 30 and may retire before they are 60. If they lived beyond 90, as many do now, they would have spent more years than their working years. You also need to review your portfolio as you go along. Keep minimal cash because of its fungibility. You are also likely to do impulsive buying if you keep too much cash. Besides, with high inflation in this clime, money market returns always trail inflation. You will therefore be losing the real value of your hard-earned wealth. Hard currency and real estate (in choice locations) will better preserve your assets’ value.
FINANCIAL TIPS THAT HELPED YOU?
I read the book titled: Richest Man in Babylon. The book teaches savings and thrift. It proved to be very useful in those days. I also learnt this tip about investment in shares. The saying was credited to Warren Buffet (I have not checked whether or not this is true). It says: Be careful when others are reckless; be reckless when others are careful. This means the best time to buy shares is when the price is low, and the best time to sell is when the price is high.
Second, my wife and I made up our minds that we shall benchmark ourselves with friends who were earning well below us and then plug our standards of living at their level. The logic is that if they could cope at that level, we should regard what we earned above theirs as EXTRA that should be saved. This paid off as our savings far exceeded what our peers were doing. We also made up our minds that we shall not compete with any of our friends in terms of choice of cars and other things young people were spending their money on.
HOW WOULD YOU INVEST A N50MILLION CASH?
If I have N50m to invest now, I will put it in the assets class that gives good returns but whose values also rise ahead of or at the same pace as inflation. Example: eurobond, real estate, etc.
ANY REGRET FOLLOWING YOUR PATH?
If I were to start again, given what I know today, I would have borrowed a lot to buy property in Ikoyi and Lekki axis. I would have invested more in telecomms immediately after the privatisation in 2003, etc. Hindsight, they say, is 20:20.
I have also learned the benefits of regular exercise and work-life balance the hard way. I was generally very healthy as a younger career person. I, therefore, did not understand the health benefits of regular exercise, healthy diets and recreation. I believe I would have been healthier today if I had added such to my lifestyle much earlier.
The final thing I will say is that in all these, you cannot run faster than God. To succeed in life, please embrace the following principles: fear God, be humble, do unto others what you want them to do, and be honest because 90% of what happens to you in life is outside your control. Any illicit money you make may not last because God warns against it in Jeremiah 17:11, “as the partridge lays on the eggs it does not hatch, so are those who pile up riches, not by the right means, they shall live it in the midst of their days, and in the end, they will be as fools”. You should also watch your health. Health issues show up later in years when you can no longer afford huge medical bills; some are irreversible. Work-life balance, be positive and be prayerful.
I advise that we live better if we learn to take things easy and forgive quickly. Anger, bitterness, etc., are the punishment you suffer for someone else’s misdeeds. It is not worth it. I remember the late sage, Chief Obafemi Awolowo, after the 1979 election, which he believed was rigged against him. A journalist asked him if he was bitter against the then military government of Olusegun Obasanjo for what happened. His response was this: I am not bitter! Why should I? Bitterness destroys your biological system. Why should you be punishing yourself for someone else’s misdeed? This is profound. We live better if we learn to forgive ALL THE TIME!
It is fallacious to think you can only build wealth by working for yourself. James Dimon, the Chairman/CEO of JP Morgan, has been in that role since 2005, although the bank is not his. He was appointed like any other employee and is worth $1.4 billion today (about N600 billion). He achieved this by dint of hard work.
Preparing for the years after work is for you to realise that you start preparing for retirement from the FIRST salary you collect while working. Many should realise today that they will spend long years in retirement than the number of years they spend working.