As part of my series about the “How Business Leaders Plan To Rebuild In The Post COVID Economy,” I had the pleasure of interviewing Dr. John C. Edmunds.
Edmunds is a financial expert, a professor at Babson and world economist frequently contacted by media outlets including CNN, BBC, Business Week, Tech Republic, Barrons, Bankrate and America Economia to name a few. Edmunds comments on the newest small businesses, alternative ways for how they raised capital, IPOs, ICOs and how they will perform for the economy at large. He is also the author of Rogue Money — an encyclopedia of alternative and crypto currencies. His primary areas of interest are international finance, financial reform, cyber currencies, capital markets and emerging markets.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I am primarily motivated by the number of people in the United States and Latin America who are lacking access to financial services through a banking institution because of bad credit or lack thereof and am especially concerned by how that number might have increased due to a pandemic. It occurred to me that the vast majority of the Latin American economies pre Covid had fallen into disrepair and I wondered what their trajectory might look like. Now, we are observing the same thing happening in US economies and as a financial reformist and professor of finance at Babson, my work has always served to eradicate financial disparity among the poor and disenfranchised.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
My early mistakes were related to the investment choices I had made in stocks. In the early years of crypto however, I did a couple of things that caused an ether to go to an address that I could not unlock because I had copied the key without the six digits at the end. Naturally, everyone does this and in the original design of ether, it was expected that a certain percentage would be lost to such mistakes due to the complexity of the transaction itself. Negotiating investments in the ether space is unregulated — a wild, wild west type of environment. I predict that it is a space with virtually unlimited potential, that will continue to grow and become less complex and more user friendly as time marches on. When people observed that Bitcoin had risen to 57,000 in value very recently, I am certain that people who had previously opened exchanges went around looking for their usernames and passwords to claim their investment. My takeaway is that the idea of alternative wealth creation is spreading rapidly to countries and to US states in which no financial services have been offered. The chronic deficiencies in the financial sectors are being circumvented by this new way of doing financing. Non traditional providers are tapping into clients who were previously not considered worthy of being addressed.
Is there a particular book that you read, or podcast you listened to, that really helped you in your career? Can you explain?
I read a tremendous amount on various topics, not necessarily related to the theory of money systems. I am extensively read on the theory of monetary economics and how money is tied to value. In writing the book Rogue Money my intention was to put together an encyclopedia in the form of short entries about how cyber currency works. We were careful to show enough detail, but not to get into the weeds so to speak to keep things elementary even for a fifth grader. The idea always was to show people how things work. In a situation where bad actors such as dealers and traffickers are present, it can also be used to move money from one bad guy to another without a trace. These are what we call privacy coins. In this way it would be possible to use anonymous emails and transfers to transact value. No one in the middle would have any idea about the transmission of money. There is evil in the world and we should be aware of it and deal with the risks accordingly. The flip side to good is that there are always strong possibilities of too much embezzlement, too much greed and no safeguards to protect someone from having their money stolen.
Extensive research suggests that “purpose driven business” are more successful in many areas. When you started teaching at Babson what was your vision, your purpose?
I believe very strongly that it is incumbent upon people who have cracked the system, who were born with privilege and who had access to everything the American Dream has to offer, to enlighten those who are seeking to also break through and shatter the circumstances and suffering under which they were born. I teach finance and entrepreneurship, but behind that idea is a mindset that it is possible to become successful and create wealth.
Do you have a “number one principle” that guides you through the ups and downs of coaching young entrepreneurs?
I remember graduating from college and getting one of those foldout check books like my dad had. In the US and Canada, you get an opportunity to receive a credit card as your capstone credit. Access to the market as an official adult made it such that you could participate in the economy fully. Yet, in much of the world, no access exists for someone who wishes to make their way into the world market. My number one principle is to shatter fatalism — this is the idea that you cannot surmount being born in a lower socioeconomic class or the acceptance of all things and events as inevitable. My idea for entrepreneurs is that there are alternative ways to build wealth and break free from poverty in a world where traditional ideals are no longer serving.
Thank you for all that. The Covid-19 pandemic has affected nearly every aspect of our lives today. For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?
I was very lucky that I did not have any financial stress and was able to exit from a high risk zone to a home in the north woods. I really did not like the transition to online teaching and it has surely affected those of us in the teaching profession in significant ways. I’m 90% proficient in looking around the room to see how well I am coming across, but am not always able to do so in an online setting. A lot of people are feeling personal dissatisfaction because of money issues in the throes of a global pandemic. This very idea — that things can change instantaneously, has reinforced me to have a formal paycheck ever since.
Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?
I think the biggest challenges have been surrounding engagement. Students are no longer able to come to campus for in person lectures. What will be the future of education if classroom style is no longer the norm? More of our students come from China, yet they are not able to get to the United States. I am experiencing challenges around determining how well I am able to come across as a lecturer. I am looking forward to further evaluating the level of foreign investment in the United States especially as it relates to education and border closures.
Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?
Around the time the pandemic started, I had an encounter near the dumpster one night where someone unmasked beckoned me towards him. He seemed unhinged and started screaming angrily at me that I was urging him to wear a mask. I wasn’t of course but the collapse of science education can be seen and felt in certain pockets of the population. Their bedrock appears to be that everything is somehow manifested by magic. A combination of lack of understanding for how science works and unrest insofar as how financially well one is faring in a down economy make for a toxic brew of fear, uncertainty and loneliness. My idea was to isolate immediately with members of my family, eventually create social bubbles with extended family and friends, find ways to become creative and to push past a small mindset with alternative ways to solve a problem set. I do have optimism around the rollout of vaccinations and the rate at which people are receiving them.
Obviously we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?
You can look at the categories in the stock market that are doing well where astute investors are making bets to better gauge what industries will continue to thrive. The travel industry is going to come back roaring. It is an interesting paradox because those were the very boutique travel agencies that started floundering around the e-commerce boom. Opportunities can be seized even by a group of friends who decide to come together to buy something in their own vicinity for a few grand a piece, let’s say a restaurant, auto shop or a grocer going out of business. The investment could serve to hire workers as well as to create new assets for those investors. The idea would create owners of new business. The opportunities presented in the post Covid economy will reinvigorate the investor class. New investors will look a lot less grey, much like it did for Bitcoin and become so much more diverse and inclusive. This is a good thing.
How do you think the COVID pandemic might permanently change the way we behave, act or live?
We can see it in retail. I have always hated buying clothes and suddenly realized that it has been several years since I have gone into a shop to buy clothes. My transactions are increasingly virtual and no question exists that online businesses are here to stay.
At this time, we are in the throes of the new Cottage Economy. Prior to this, the Shared Economy brought about by the 2008 recession with the rise of companies such as AirBnB, Uber and Groupon were what fueled consumption. The Cottage Economy is a book by William Cobbett, first published in 1821, which covers many practical instructions such how to bake bread, brew beer, keep livestock and “other matters deemed useful in the conducting of the Affairs of a Labourer’s Family” with the aim of aiding the “Labouring Classes” in having a “good living”. It is considered to be a timeless guide on matters of self-sufficiency. This new economy is one in which learning a skilled trade is valued over necessary higher ed.
Pandemic anxiety and pandemic fatigue are also rife, much of it tied back to financial wellness. Some can afford to fly private and retreat to remote corners of the planet, and others can only afford to step back into the workplace to generate a check. Others have reinvented the boardroom courtesy of Zoom.
Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy? Similarly, what would you encourage others to do?
My business as an academic is to be a professor who can shape the outcomes of the students who will soon hit the market. Because my area of study includes alternative methods for creating wealth, I have also tinkered with podcasts and more recently, by serving as a speaker on Clubhouse.
Can you please give us your big idea? Can you share how that was relevant to you in your life?
The temptation is generally to speculate with excess funds like a stimulus check. The best way to rebuild in a post Covid world is to save a portion of it and later decide what investment to make that will generate future earnings quickly using a skill in place. For example, you could use a couple hundred from a fourteen hundred dollar check to purchase a lawnmower to grow your earnings. Similarly, you could invest in a smartphone or laptop to provide marketing or consulting services. Additionally to this, you could determine what alternative coins could generate a rate of return higher than the bank. All the while you pay down on debt and wait on forgiveness for student loans. Somewhere near you there may be a business around the way that got burnt out. You could become the owner of a small business. The opportunity now to participate in the American Dream has never been more present than it is now.
How can our readers further follow your work?
You can find me by reaching out to my publicist Kojenwa Moitt at Zebra Public Relations or reach out to Babson’s department of finance and entrepreneurship. I have a website at www.johncedumnds.com