Diversify or Die

It’s always refreshing to discover successful black people in business, especially in areas other than sports and entertainment. We know we excel there – but what about other areas of business? I was grateful and inspired by this article that was shared with me about billionaire brothers, Michael and Steven Roberts, from St. Louis. I hope you are too.

From CNN.com:

Steven Roberts, left, and his brother, Michael, own a St. Louis theater that once segregated African-Americans.

Steven Roberts, left, and his brother, Michael, own a St. Louis theater that once segregated African-Americans.

Michael and Steven Roberts didn’t have two quarters to rub together a couple of decades ago. Now, the two African-American business leaders estimate their holdings — from hotels to TV stations — are worth $1 billion. One St. Louis hotel they own once barred black people.

“Black folks need legacy. We have to have examples of successes in order for us to be able to let the generations to come know that many of the successes that occurred by African-Americans in this country can be seen and pointed out and can be emulated,” says Michael Roberts, the chairman and CEO of The Roberts Companies.

Michael and his brother Steven, who is three years younger, stroll through their office, complete with wood-paneled doors, large leather chairs and a pool table fit for a king. Their office sits along a busy street in St. Louis called Kingshighway.

“They used to call us the Kings of Kingshighway, because we own so much on this street,” Michael Roberts says.

Their office is the culmination of hard work and a can-do American business attitude to strive for greatness. They launched their business from a historically black neighborhood in north St. Louis.

From a one-room office, they created an empire now made up of 76 companies and 1,100 employees, many of them minorities. They own commercial real estate, TV stations, hotels, telecommunication companies and more. The name Roberts adorns all their properties.

“We weren’t rich. We weren’t poor, but we just never had any money,” Michael says of their upbringing.

They like to tell their story, encouraging people with new ideas to chase their dreams. If you don’t have money, they say, don’t let that stop you.

“We tell folks, learn it, get your hands dirty — you know, a little sweat equity,” says Steven Roberts, the president of The Roberts Companies. “For that college student, for that future entrepreneur … we’re saying understand what your passion is, and understand what your product is, too.”

Michael Roberts chuckles. He notes that his younger brother has always been good at “putting the meat on the bone.” He says he likes to tell youths and college students: “What would your life be like if you could eliminate the fear of failure, and where would you be at this point in life?”

There will be times, he says, when you will stumble, but don’t let those hiccups get you down. “If you eliminate the fear of failure and if you use every moment to its fullest extent — a very existential concept — then you are able to take your ideas, your dreams, your aspirations, and you can pursue them with courage and confidence and bravado.” What are the challenges for black entrepreneurs, businesses?

The brothers operate on a simple business philosophy: You diversify or die. And they don’t believe in a full retirement. “What other animal retires?” Michael Roberts says. “If a lion retires today, tomorrow morning he becomes his brother’s breakfast.”

They point to their father as exhibit A. At 86, he still comes to the office that his sons named after him, the Victor Roberts Building, a large complex complete with restaurants and retail stores. He worked 39 years in the Postal Service before retiring in the 1980s. He now keeps a keen eye on his now grown boys. He refuses a paycheck.

“I suggest anyone who has a father,” Michael says with a laugh, “please hire them, because you can get them for free.”

The two brothers also have served in public office, elected to the St. Louis Board of Alderman in the late 1970s.

They recently walked through The Roberts Orpheum Theatre in downtown St. Louis. It symbolizes their quest for a legacy. Decades ago, their mother and other black people were only allowed to sit in the highest balcony. Now, the brothers own the theater.

They stood on the stage and scanned the empty seats. Again, they laughed. “Mom can sit wherever she likes,” Michael Roberts said.

Consumer Rap

I turned on Sirius XM Channel Shade 45 which is Eminem’s station today as I was riding about town and promptly heard this exchange between two DJs and the jest of the conversation went as followed “DJ1: Jay-Z made the Forbes 400 man. That’s big. DJ2: Oh word? DJ1: Yea oh with some guy named Warren BUFFET? DJ2: No Buffett I think. DJ1: Man I thought it was like something you eat.”

Sadly they never got Mr. Buffett’s name right. Nor did they ever correct themselves about Jay-Z. The correction is that Jay-Z is not anywhere near being on the Forbes 400 list of Wealthiest Americans. The price of admission to this list is a net worth of $1 Billion (of which only Oprah Winfrey is the only African-American present). Jay-Z’s net worth as reported by Forbes is somewhere between $150 Million as reported in ’09 and $450 Million as reported in ’10. This despite Forbes reported that Jay-Z only earning $63 Million over the past 12 Months. Forbes methodology for Hip-Hop Cash Kings, which Mr. Carter was ranked number one, includes their investments and such in their earnings and is pre-tax and management fees which usually amounts to 50% of an entertainer or athlete’s earnings. So I’ll let you ponder how or why Forbes turned $31.5 Million into a gain of $300 Million. I have my hunches but alas that’s not really what this article is about because the reality of it at the end of the day Jay-Z is one of the better businessmen that Hip-Hop has ever produced and very well might become a billionaire one day unlike many of his colleagues.

Coming back to the story at hand however. It is not surprising that many everyday people don’t know who Warren Buffett is despite his cult like following of fellow financiers and investors. Considered to be by many the greatest investor of all-time if you’re not in the finance world his name means about as much to most African-Americans as Soul-Glo would mean to a bald person. The coupling of Mr. Buffett and Jay-Z (arguably the greatest rapper of all-time) and what they promote into culture of their communities could not be more polar opposite despite both being very poignant businessmen in their own realm.

Mr. Buffett has made his wealth off frugality and investment. He has also recently (to my dismay) decided to leave the bulk of his fortune upon his demise to the Gates Foundation as part of a promotion for the wealthy to give more of their fortunes to philanthropic causes for humanity. On the very opposite spectrum Mr. Carter who came of age in the bling era has been a part of new rappers that has prided itself on the ability to promote consumerism with songs like “Ballin Remix” by Jim Jones or “Make It Rain” by Fat Joe or as Rick Ross infamously points out on “Speedin” – “I’m worth $15 Million and I’m trying to SPEND it all in one week.” The ability to consume above all and frequently with no wealth is the mantra that Hip-Hop today exudes. This is not to say that rappers don’t have a philanthropic bone in their body. Mr. Carter and others were at the forefront in giving to FEMA (for better or worse) after Hurricane Katrina devastated the Gulf Coast. However, unless you dug deep in the annals of Google would be something one would never know and these moments are few and far between.

I tweeted the other day that rappers love to tell us how to spend our very small pennies as African-Americans (we have $0.07 for every $1.00 European Americans have) but they rarely tell us how to make any. They aren’t rapping about investing in stocks, bonds, rental properties, or philanthropy. In fact the only hip-hop artist I’ve ever heard go straight to the point was an artist named NYOIL with a song called “The Investor”. Needless to say this didn’t get the airplay it deserved. Consumer rap prides itself on artist making plugs for clothing, alcohol, basically anything WE don’t own and other anti-wealth behavior for a community that is at the bottom of the wealth totem pole in this country. Given that Latinos are fairly new on the scene and have already surpassed us in wealth has me begging, crying, and screaming for us to change our behavior pattern in terms of wealth. Given that hip-hop is a way of life that way of life clearly needs a makeover and the leadership in hip-hop needs to promote that change. Unfortunately I will not hold my breathe as most artist are simply labor to a company which is predominately owned by men like Mr. Buffett. Just remember that Mr. Carter’s Net Worth is a mere 10% of Mr. Buffett at best depending on which net worth of Forbes’ you choose to use. People may say we expect too much of our athletes & entertainers to be socially conscious. The ghost of Paul Robeson just rolled over in his grave.

Mr. Foster is the Interim Executive Director of HBCU Endowment Foundation, sits on the board of directors at the Center for HBCU Media Advocacy, & CEO of Sechen Imara Solutions, LLC. A former banker & financial analyst who earned his bachelor’s degree in Economics & Finance from Virginia State University as well his master’s degree in Community Development & Urban Planning from Prairie View A&M University. Publishing research on the agriculture economics of food waste as well as writing articles for other African American media outlets.

First-Time Home-buyer Tax Credit Extended

If  you are buying a home and are currently in escrow, but thought you missed the deadline for the $8,000 tax credit, you are in luck. At the beginning of the month, Congress voted to extend the tax credit to September 30 for buyers who had signed a purchase contract by April 30th. The push for this extension was lobbied by the National Association of Realtors. The extension is beneficial to those buyers who are taking advantage of short sale transactions which take much longer than the average 30 days to close.

Foreclosure Myths

I’ve always had an interest in real estate, thanks to my grandfathers being investors. They shared how important it was for everyone to invest in property and own their own home; but they always stressed the fact that it was the quickest way for a person of color to build wealth. After a two-year home shopping extravagnza, I’ve not only become extremely informed about the process, but I can’t read enough information about it and passing it on. My hope is that more people of color will get informed and invest in property. With the downturn in the economy, those that have stayed afloat or have never invested should take advantage of all the properties in distress.

With that being said, here is a list of foreclosure myths compiled from one of my favorite real estate websites, Trulia:


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