Hey crew, here’s to another week of cutting through the noise and focusing on what actually moves financial minds forward.

No buzzwords, just clear shifts you can use:

🎨 The Art of Fraud: Second Oldest Profession

🫴 Dashen: “Hey Guys, I’m Good For it”

👶 Raising Financially Responsible Kids

Here’s to the 109th edition

Let’s dive in.

Why do we keep eating its apples?

Financial crime research shows that fraudulent schemes rely heavily on three specific psychological triggers: pressure, opportunity and rationalization.

In emerging economies like Ethiopia, the pressure is often macroeconomic.

When inflation is high, keeping your money in a standard savings account feels like watching an ice cube melt in the midday sun. This creates the perfect opportunity for scammers.

You’re sitting at a café near the riverside, sipping on a cocktail, when a ዘናጭ acquaintance leans in with a conspiratorial whisper.

They’ve found it. An investment opportunity so magnificent, so legally airtight and so incredibly lucrative that you’d have to be allergic to money to pass it up.

Our immediate instinct in these moments is to get excited especially after a few drinks.

Step back and check if your wallet is still in your pocket. Because in the world of investing, there is an immutable law: high returns come with high risk.

To understand how easily smart people get taken for a ride, let's take a quick trip across the Atlantic to look at the recent corporate drama surrounding Brazil's Banco Master.

Following a takeover in 2019, Banco Master looked like an absolute powerhouse with aggressive growth and asset accumulation that left traditional banks in the dust.

The business model focused on issuing high-yield Certificates of Deposits (CDs) available for retail investors to fund illiquid assets, such as shares in cash-strapped companies with questionable valuations. CDs sold by Banco Master paid 21%, far sweeter yields than were available from rivals at 15%.

Aggressive marketing on retail investment platforms helped the bank raise billions of $$$ from every አጅሬ saver, who were reassured by guarantees from Brazil’s deposit insurance fund.

Time finally pulled back the curtain on these risky bets and the castle crumbled.

We don't always need complex corporate structures to get ourselves into financial trouble. We do it the old-fashioned way: peer-to-peer trust, misdirected ego and a healthy dose of FOMO.

Because our traditional financial ecosystem is evolving rapidly, scammers have upgraded their toolkits. A few years ago, it was the classic pyramid scheme.

Lately, we've seen the rise of dubious digital crowdfunding platforms. But when you ask to see their license or an audited financial statement, suddenly the connection drops. Or they tell you that "the regulatory framework hasn't caught up to our genius yet."

If you want to keep your capital safe while still growing your wealth in a developing market, you need a healthy dose of skepticism. Here is your defense toolkit:

Emerging markets are genuinely full of high-growth, legitimate opportunities. ጎጆ industries, logistics and innovative tech infrastructure are all transforming the economy.

But real growth takes time, sweat and sound business plans.

The next time an investment opportunity sounds so good that it makes you want to quit your day job, take a deep breath.

Sleep on it, discuss it with financially savvy friends, seek professional advisors.

What happens when a bank needs money?

Sounds like a rhetorical question given the irony of a money storing building asking for what seems to be already sitting inside its four walls…

Yet, that happens more often than not. Those campaigns prompting you to buy shares? Yep, they are indeed cash collection plates, although not of the divine nature that you’d expect.

The blue and white bank known as Dashen has been running a similar campaign the past few months: a ploy to fill a ETB 6.4B ($41.1M) share sale gap. The trigger? Warming up to compete in the Capital Market Olympics, where the rules are not very well defined and the participants are as confused.

It has partnered with CBE Capital too, an investment bank that has a slight affiliation to CBE, a Dashen rival in the banking arena. Peculiar times we live in…

Dashen is betting on its current fans, its own shareholders that is, to fill the artificial hole. A ETB 2,900 per share has been decided by the powers that be.

How Does This Affect Me?

Well, any share that has not been picked up by existing shareholders is offered to ‘retail investors’, a.k.a you, us, everyone else. it’s a new term that we will need to get used to…

You can read the full prospectus and make the judgement call (Whether owning Dashen is a good deal or not).

The bank will go public soon, and that usually means, raising money from the public so it seems peculiar that it’s boosting its coffers while preparing for an event that should boost its coffers 🙄

Raising kids is a daunting task, ask any parent.

For first time parents, it’s even harder, it’s a new life, a new identify they will have to embrace. On top of keeping these little human beings alive, there’s the small matter of teaching values.

In this case, the value of money.

Some adults face the harsh reality of how easy it is to be irresponsible with your money later on in life. Well here are some tips on how to get the little ones on the right track at an early age:

How Does This Affect Me?

Are you a parent? Do you wish you had ፍራንክ Digest when you started getting allowances as a kid? If the answer is YES, then you can use this opportunity to hone in your new found skill as a financial master and help your kids become the best versions of themselves.

We personally believe that financial literacy should be thought at school level, part of the official curriculum. Money is not everything but we use it for everything. Treat is right and it will treat you right, that’s Chapter 1 (if we ever publish a book)