Spending money to make money?
A couple months ago, I started reading the biography of well-known “Indian trader” Elijah Blair.
Beginning in the 1940s, Blair operated trading posts at Mexican Water, Aneth, Kayenta, Dinnebito, and Page.
“Lige,” as he was sometimes known, played an important role in 20th-century Southwest trading history.
The book, a rambling, often-repetitive affair, is entitled From Hoot Owl Holler to Indian Country: Trading as a Way of Life from Eastern Kentucky to the Indian Country of Arizona, Colorado, New Mexico and Utah.
It has taken months to wade through it, but I did come away with a few passages that struck me as important.
In one section, where he discusses credit and pawn as necessary elements of early trading post economics, Lige states, “The Navajo concept about money was that money had no value until you spent it.”
Generalizing and racial stereotyping aside, that sounds a lot like the Twin Rocks philosophy.
As my late father, William Woodrow “Duke” Simpson, was extremely fond of saying, “You gotta spend money to make money.”
Maybe that’s why the Simpson clan has always been better at outgo than inflow.
Duke had a number of expressions he often deployed to guide his underlings, some that can’t, or shouldn’t, be repeated in polite company.
That was, however, one of his favorites. Surely that is why the ideology is so deeply ingrained in the Twin Rocks Trading Post business model.
Duke likely inherited this principle from his father, Woodrow Wilson “Woody” Simpson.
Like the rest of this family, Woody could spend with the best of them. So, it seems the spending gene has passed through several generations, becoming firmly affixed in me.
Duke was a cash man. When I was young, he would frequently reach into his Levi’s, pull out his wallet, and thumb through the $100 bills. If there was a large stack, everything was okay, and he was good to go.
I don’t remember Duke ever being concerned about spending, at least not until I came into the business.
Duke reminded me of Joe Belitso, an elderly Navajo man who patronized our first trading post in Blanding. During the oil rush of the 1950’s, black gold was found on Joe’s allotment and he made a bundle.
Since he was unfamiliar with the inner workings of banks, Joe always carried two wallets, one bursting with Ben Franklins and the other for “small bills,” anything under a hundred.
Like Duke, Joe packed a large reserve.
His dislike for financial statements aside, Duke always argued he kept adequate records.
When I returned to southeastern Utah in 1989, Duke and Rose were under audit by the IRS. As is generally the case when revenue agents come knocking, my parents were distressed.
After I agreed to look into the matter, they handed over several shoe boxes full of paperwork. My law school professors and senior partners had warned me about this scenario and strongly counseled against ever agreeing to take on such matters.
These were, however, my folks. So, what could I do?
After many long nights, I finally had their records organized, tallied, and tabulated.
To my surprise, their numbers were almost spot on; expenses were properly documented, purchases proven, and income shown. I could not have been more astonished.
The IRS agent was also taken aback and let them off with only a token additional payment, which I am convinced was necessary to satisfy his manager.
Having heard my dire warnings about all that could go wrong, I think Duke and Rose felt vindicated, and even a little smug, when it was all over.
Since I am a financial statement kinda guy, when I was installed as the family’s CFO, Duke began to worry – a lot. Accounts receivable grew and cash dried up; Duke’s wallet slimmed down.
My mom, brothers, and sisters were all generally in line with Duke when it came to money, so they, too, were anxious.
As Twin Rocks grew, I spent considerable time each month trying to explain the statements to Duke. We generally never got past the first page or two before he blew up and started howling.
Reports meant nothing to him, cash was king, and so far as he was concerned, I was making him an indentured servant.
Debt, accounts receivable, and cash flow were topics he never wanted to discuss. His only concern was how much money was in the till or in his back pocket.
At the same time, Priscilla began to tutor me on Navajo life ways, and I attempted to teach her standard business principles, as I understood them.
Not long into our lessons, she asked, “Why do white people save money?”
She had previously addressed this issue with her mother, Gladys Yellowman, only to be admonished that Navajo people do not believe in savings or investment accounts.
In Gladys’s world, money was made to be spent, and any complication arising from that conviction could be dealt with, if and when, it arose.
Gladys did not want to hear any more about saving or investing. As far as Gladys was concerned, money was for spending and today is for living.
For some reason, I never thought to ask Duke whether the saying should have been, “You gotta make money to spend it.”
Unfortunately, it’s now too late to investigate.