Craig Jonas of CoPeace On The 5 Essentials for Smart Investing

Gambling and investing are two different things. Speculators and investors are two different animals. Speculators are more like football gamblers. They’re hoping for a very quick profit. A company’s fundamentals are of little or no concern. And neither is whether or not a particular company is making a positive impact on society.

Speculating, like gambling, can work for a while but ultimately speculation runs its course and speculators can suffer painful losses. Don’t get caught up in the latest fad investment approach. Investing in companies with strong fundamentals and that are positively impacting society is the safest prescription for long-term investing success.

As a part of my series about the The 5 Essentials of Smart Investing, I had the pleasure of interviewing Dr. Craig Jonas.

Dr. Craig Jonas is a lifelong entrepreneur with success across business, academic, and athletic industries. Craig has over 30 years of experience in management with a passion for team building and drawing individuals with big ideas together.

Craig founded CoPeace, an impact investing company in 2018 after serving as COO of Basketball Travelers and BTI Events, an elite sports event management and media conglomerate, for over 20 years.

Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

It has been quite the zig zag journey, for sure! I honestly had no idea what I wanted to do when I grew up until I started CoPeace in 2018… The finance industry was not my first career, but as I was trying to discover a way to create a meaningful, impactful legacy for my kids, I discovered a unique fit in impact investing by exploring new models that create more inclusive, responsible capitalism.

I am the son of a music teacher and minister/psychotherapist; my parents taught me to love and think critically. I lived in India when I was young, where I learned that you do not need material things to be happy.

My first career was coaching and teaching, at many levels. I was extremely fortunate Al McGuire chose me to be the first American basketball coach to give clinics in South African townships post-apartheid. And, as a successful head college basketball coach, I learned that coaches (and later applied to business leaders) control five elements of potential success, in the following order:

1. Players in the Game — Having been part of 9 start-ups at different levels (it is all about the Team and complementary roles).
2. Effort and Motivation — One of the main variable’s coaches can control. Great teams play hard all of the time.
3. Strategy — Interestingly, the X’s and O’s are listed 3rd on my list. Strategic adjustments are vital.
4. Fun — Especially for the modern player (and business team member), it is so important to enjoy the journey to create more engagement.
5. Love — The greatest of these is Love. True empathy is enables trust and translates to collective success.

I decided to differentiate myself as a coach and started a Conflict Management/Sport Psychology Ph.D. program where I learned that conflict is natural and can be harnessed for growth. During my studies I started to get the entrepreneur bug! As strange as it may sound, I found the entrepreneur actually has MORE control than a coach.

Once I experienced a taste of the entrepreneurial path, I never turned back. I was part of the team that started a play animation software company that was part of CBS NCAA basketball broadcasts. I then served as vice president for business development for the broadcast media technology firm, Sportvision, best known for bringing revolutionary visual enhancements to live sports broadcasts, including American football’s yellow first-down line and baseball’s virtual strike zone (current CoPeace COO/CFO, Ed Tepper was a founding owner of this special group). I served as COO and minority owner of Basketball Travelers and BTI Event, a sports event management and media conglomerate, for over 20 years.

I realize how cliché this might sound, but what really inspired me to move 100% into the world of finance was my investment and subsequent trip to the “Woodstock of Capitalism” for the Berkshire Hathaway annual meeting in Omaha, Nebraska! I really liked the Holding Company model and all of the wisdom shared by Warren Buffet and Charlie Munger, but as I researched BRK more I did not really like what they were investing in. And I knew my kids would not approve in so many oil and gas related activities.

So (!), when I had the chance to accept an exit from a successful adventure (business and otherwise) with Basketball Travelers, colleague and business partner Meg Masten and I decided the timing was right to start CoPeace PBC. The timing was right for an innovative holding company for profitable businesses creating measured positive impact. Profit for profits sake has created a dirty, unsustainable world. This is untenable for future generations. CoPeace is a more responsible solution, creating a new Berkshire Hathaway for younger, caring audience.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

In my second year was a young head college basketball coach, my oldest son was born in the middle of the season, in January. We had a strong team, and everyone was incredibly supportive and enthused by the newest member!

But, perhaps due to my excusable distraction of the birth, we were down 20 points at half time in the first game after his birthday against one of our biggest rivals. Nobody was happy during half time and I was frustrated. As I was getting ready to address the team, I raised my voice and said, “My son plays better defense than we do!!!” The team looked at each other, then at me, and everyone just burst into laughter! Something was more important than the game! With an incredible team effort and defense that caused a lot of turnovers, we rallied in the 2nd half, won the game, and ended up eventually progressing to the small college national championship tournament.

I guess the lesson is that perspective is an incredible teacher, and that humor has a powerful role in stressful settings.

Are you working on any exciting new projects now? How do you think that will help people?

When we take a deep breath and look around where we have come from, we are excited about the foundation and team we have built, and where we are going from here.

We are excited about our investments to date, especially in the middle of our crazy challenging times. Our new wholly owned subsidiaries are particularly interesting as we decided them in response to real needs in the impact investing and ESG space, and to be of service to help companies extend their business prospects and impact.

We have 3 current new subsidiaries (see: https://www.copeace.com/services/)

• CoFi: CoPeace Finance PBLLC. We have evaluated over 150 companies to date. Clearly one of the most striking needs is with their respective attempts at appropriate math. With our internal and external experienced team, we can address the needs head on.
• CoMa: CoPeace Marketing PBLLC. The other need we see often is the help on the marketing side. We have a deep bench that has experience to help grow respective burgeoning brands for good.
• CoSpo: CoPeace Sport PBLLC. Nelson Mandela said, “Sport has the power to change the world.” We agree! Many of our team has a wealth of background and we are seeing several exciting opportunities. We also have coding/AI/data gathering skills that are leading to some proprietary tools for the impact/sport space.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers?

Ironically, while the United States is perceived as a financial superpower around the globe, a large percentage of our citizens suffer from financial illiteracy. Poor financial skills can negatively impact a person for life. Moreover, the lack of personal financial skills can result in a perpetual cycle of poor decisions that crosses generations.

The problem starts early in our schools. Basic financial literacy needs to start as early as kindergarten, and it very rarely does. A high percentage of high schools lack even rudimentary financial education programs.

However, the problem extends beyond our educational systems. Too many of us stop educating ourselves once we get out of high school or college. Ongoing financial self-education is important for all adults. There are numerous ways to do that inexpensively today via books, magazines, podcasts, free online curriculum and webinars, etc.

If you had the power to make a change, what 3 things would you recommend to improve these numbers?

Step one is prioritizing financial literacy in this country. It is an important life basic and we need to start treating it that way.

I think we should require high school students to pass a one semester personal finance and economics course. Less than half the states in this country require such a course. Moving beyond secondary education, it would be great if more colleges and universities required a personal finance 101 course for all incoming freshmen, not just business majors.

We also need a national financial literacy campaign, which could be sponsored by a wide consortium of financial institutions and stakeholders. Part of the campaign would direct people to the numerous personal finance resources that are readily available, many of them for free. For example, the Federal Deposit Insurance Corporation (FDIC) has a free program called Money Smart that has courses designed for students, young adults, adults and senior citizens. The Department of Treasury has free online financial literacy programs for various demographics and a great financial education website, MyMoney.gov.

Building awareness and understanding of what’s accessible to citizens in all demographic groups will require an integrated communications effort.

Ok, thank you! Now to the main question of our interview: You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each.

1.) Do well by doing good. More and more investors, especially younger ones but increasingly across all demographics, want to truly make a difference with their money. They want to know how companies are conducting business. Are they creating social and environmental value for customers, employees and communities, as well as financial value for shareholders?

Impact investing is not just another term for altruism; it’s a winning business strategy for companies. Impact investing is simply investing in for-profit companies that have a core mission to address social and environmental problems in the world.

Environmental, social and governance (ESG) investing is surging and now makes up 33% of total U.S. assets under management. (See https://cnb.cx/3sXO7x8) A highly regarded study, led by George Serafeim of Harvard Business School, found that stocks of companies with the strongest performance on ESG issues outpaced those with poor ESG performance. (See https://bit.ly/3qRepiQ)

As Warren Buffet said, “Good profits simply are not inconsistent with good behavior.”
There are plenty of avenues available to meet your investment goals without your money doing harm to people or planet.

2.) Gambling and investing are two different things. Speculators and investors are two different animals. Speculators are more like football gamblers. They’re hoping for a very quick profit. A company’s fundamentals are of little or no concern. And neither is whether or not a particular company is making a positive impact on society.

A current example is the frenzy in the stock options market. Speculation is at a level not seen since the end of the dot-com cycle. Options trading in 2020 was at a record level of 7.47 billion contracts, according to the Options Clearing Corp. That’s 45% higher than the previous record set in 2018. Much of this action has come from small-time — and often first-time — individual investors looking to make a fast profit by purchasing “calls” set to expire quickly. These calls are typically bought without any consideration of a company’s fundamentals, mission or societal impact.

Speculating, like gambling, can work for a while but ultimately speculation runs its course and speculators can suffer painful losses. Don’t get caught up in the latest fad investment approach. Investing in companies with strong fundamentals and that are positively impacting society is the safest prescription for long-term investing success.

3.) The first key to smart investing is avoiding crippling debt. The credit bureau Experian found that the average credit card balance at the end of 2020 was about $5,800. (See https://nyti.ms/3qRaRNC) As of August, the average annual percentage rate on credit card accounts accruing interest was 16.43%. Thus, for the average household carrying a credit card balance as of September 2020, this means paying annual interest of $1,155. (See https://bit.ly/3pluKfq) Those numbers make it very hard for the average household to have a solid, consistent investing program. If you choose to use credit cards for short-term needs or convenience make sure to pay off the balance every month.

4.) Surprise is the mother of panic. Expect volatility and take a long-term view. When a market goes cold, whether it is stocks, real estate, gold or baseball cards, the human ego starts yelling “Get out! Get out now!” But investors with an established, sound, long-term plan to meet their financial objectives can more easily ignore the ego’s call.

If you choose wisely with your head, heart and some solid math, you can relax and enjoy an upward rise and filter out the inevitable ups and downs along the way. According to Investopedia, the long-term average annual return in the S&P 500, adjusted for inflation, is about 7%. So, create a plan that aligns with your short and long-term objectives and stick with it.

5.) Remember, in the end, it’s not about the money. Keep first things first. Money is a tool. True joy and meaning in life come from relationships and making a difference on causes bigger than yourself. Money is an enhancer but if it becomes your focus regret will likely follow.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

In the impact investing space, we are standing on the shoulders of many giants that led the way with deep research, wisdom, and guidance. We are extremely fortunate to have a relationship with Jed Emerson. Jed and his contemporaries taught us that business can (and needs to) provide environmental or social impact while providing a solid financial return. It is a good business decision to care about the long-term future of our world.

I think it is fair to say that Jed is extremely careful with his associations. He wants people to truly walk the walk, especially in an era where there is so much green washing and impact washing as the movement becomes popular. Jed and I are both “preacher’s kids” and share a lot of common with our philosophical underpinning. Many of our team has read Jed’s books, including The Purpose of Capital, and his influence has been deeper than he knows. Authenticity is so key to where we are going, especially for the younger community.

Jed helped curate the CoPeace big idea to actively do something about the inequity in our world by creating vehicles to democratize access to the equity game for communities that traditionally have not had that opportunity.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I will share several, but in a quick way!

“It is what you learn after you know it all that counts,” John Wooden. Coach Wooden was a personal friend of mine and he had so many words of wisdom! Keep learning every day.

The ancient Chinese philosopher Lao Tzu said, “there is your way, my way, and the way of truth.” Relevant with the challenges of our day to allow yourself to try to understand the perspective of the other, and alternatives.

“The time is always right to do what is right,” Dr. Martin Luther King Jr. My dad marched with MLK and many of his teachings speak for themselves.

Ralph Waldo Emerson: “The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well.”

I’ve always wanted to make a positive difference in other people’s lives, from the early part of my career as a basketball coach to today as founder and CEO of CoPeace. I truly believe that CoPeace is the way I can make the biggest difference in the most people’s lives going forward.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

I’d love to see a “Justice For All” campaign based on the last three words of the Pledge of Allegiance. The American flag has been a divisive symbol in recent years as some athletes decided to kneel during the playing of the national anthem because they believed we weren’t living up to the ideals represented in the flag. Undoubtedly, as a society, we have failed many times to live up to the words “justice for all.”

But as the nation’s youth poet laureate, Amanda Gorman, said at Joe Biden’s presidential inauguration, “While democracy can be periodically delayed, it can never be permanently defeated.”

Justice for All could be the foundation of a great movement, in which we, as a country, unify around one of the tremendous founding ideals of our country. We need a commitment to the oneness in this country more than ever. The United States has to become a “we” nation instead of an “us” and “them” nation. A Justice for All campaign might help us get there.

Thank you for the interview. We wish you continued success!