How To Multiply Money...

in moneymagic •  20 days ago

I've been holding off from tithing for quite a while, having convinced myself I needed to be making more before I could afford to give back. Though, as it was asked of me what cause I supported and I had to begin asking others this same question, it became clear, there is no "some day" - even if I may not be in the optimal financial condition I wished for at the moment, that is no reason to hold back from giving towards a cause I believe in...

My chosen cause - Kiva.org

For those unfamiliar with Kiva, it is a micro-credit organization which helps disperse small loans to disadvantaged entrepreneurs worldwide. I have chosen to support this cause, after becoming familiar with the amazing success of Muhammad Yunus' Grameen Bank model, which by allowing the poor access to funding to build their own enterprises, has lifted a shockingly large percentage of Bangladesh out of poverty and brought MUCH progress to the country...

My first loan was to a lady in the Philippines raising funding for her banana & charcoal business. By funding her 2/3 of what she was asking for, I've helped her get what she needs to expand her current enterprise to create more wealth for herself, her family, and her community.

Now some may look at this not as charity, as it a loan, which is likely to be repaid. Our culture has associated charity with unconditional giving, essentially handouts, so some may consider making a loan to not really be giving in the traditional sense. Yet, here, I offer an alternative view...

(I have much more writing in the works on the charity/NPO models which will bring much more depth to this topic)...

With most traditional charity, a person gives, someone receives, and that's the end of the story. If they give $100, $100 has been transfered. And, as most charities are horribly mismanaged, if lucky, maybe 30% of that went to the actual cause. So from a $100 donation, maybe $30 of value has been created.

Why I've chosen to support micro-credit: the impact of that $100 donation may extend FAR beyond what any of us may imagine. Consider...

This Filipino lady uses the donation to expand her business. In the process, she brings greater market value to her community, creates jobs for others in her community, creating wealth for herself and those she does business with. Out of nothing, she has created something. And the ripple effect, no one knows. The initial $100 priming the pump could turn out to thousands of dollars per month increased value for her small community. Pretty good, return, huh?

But then - she repays the loan. Now, I could simply take back the $100 and put it in my pocket, all said and done. But, I will not. Rather, I will take that same $100 and reinvest in someone else who needs the funding to grow their business. And perhaps the effect of that entrepreneur's activities in his/her local market will create thousands of dollars more of value in the community. And then they pay the loan back, and I re-loan it out to someone else. And again, and again, and again.

Say it takes a person a month on average to pay back the loan. In one year, that $100 will have circulated 12 times. In effect, I have created a value of $1200 with an initial investment of $100, not even taking into account the wealth created as a result of those 12 business I've supported.

With the traditional charity model, there is no place for incentive to develop independence. It relies on handouts, fostering dependence. It is HIGHLY inefficient, and a black hole for money, with recipients getting a one-time payout then left in the exact same situation they were in first, with the investment value losing 70%+.

With micro-credit, there is are no hand-outs. Responsibility is developed. Recipients are provided the means to create a future for themselves. And, wealth is multiplied, bringing returns to the whole that are impossible to calculate.

...

So some may get disappointed with the result of this writing, having built up hopes that you were going to know how to increase the amount in your own bank account. Not quite. But, these are perspectives which will enable us to increase our own worth in the long run - for once we become aware of how money works and take responsibility for investing it wisely, we are bound to take actions which increase our own value in the world, bringing back more to use in return.

Yet, it isn't all about ME. There are a lot of selfish people out there, who if heard they could multiply money, would be open ears, until they heard they weren't going to be the direct recipient. This is short-sightedness and irresponsibility. The only way we can grow and prosper in life is to play a role in the empowerment of others, and discovering the power in such simple ideas as the one above allows us access to a whole new realm of possibilities we'd have never known otherwise.

We have countless organizations all raising funds for various causes, yet that money is atrophying, creating no steady stream of wealth. What would be possible should people wake up to the fact money can be multiplied over and over and over, putting it into the hands of those possessed by the entrepreneurial spirit, committed to creating consistent value in their communities, rather than simply giving handouts?

Next time you donate money, question - is that money going to be diminished and a fraction of it serve once, or could you be investing in a system which will multiply it over and over, while enabling others to access their power to tap into the consistent flow of wealth?

~ written 2009

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"Give a man a fish and he will eat one day. Teach him to fish and he will eat all his life...". Thus says the saying, @rok-sivante. I believe that any action that seeks to help a person should be done with the intention that the person be independent and no longer dependent. That you manage to lead it, not that you help it to walk, because you can create the self-reliance of the individual: the need to have another person always to help it! The other is the reproduction of that good. That the person, after being helped, is able to help. There is a famous film called Chain of Favors, where if I receive a favor, I must do one, and so on. I think that's how help should be: not to stay in just one hand, but to vary! Today for you, tomorrow for me or for someone else. I don't know you, but I already admire the man behind these lines. I embrace you in the distance.

You have at the end of your posts that you wrote most of them in 2009. Where were you publishing them at the time?

As I mentioned yesterday in my comments, I have used Kiva and have tried to target people who are going to be building sustained value for themselves. As you said here, that leads to building value for their community as well. If the person who gets the loan has more money, they can spend more in their community, so those people have more money.

I've never had a loan repaid in 1 month. I think the fastest was almost a year. I actually haven't had great returns from my loans, but I like that people were able to use it to buy/build something, even if it didn't work out. One man had terrible weather for his crops and didn't get enough to pay back the loan. It happens. I was more disappointed for him that he didn't get to harvest a big crop. I lost money on another loan as well, but I still have a positive view of the experiences.

At the end of the day, it's a chance to change someone's life. Many "someones" lives. It was money that I wasn't spending anyways, so I chose to use it to equip others who wanted to help themselves.

Thanks for showing how micro loans can be more effective than gifting. Not only does it empower the receiver, but it can have much greater impact.

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They were all just published as Facebook notes.

amazing write-up i must say...initially looking at the topic i had a different perception or was expecting something different else..you really caught me sir...if i must say your point and opinion is very much accepted by me. it is in giving that we receive...as a youth i have come to realise that for one to collect somethings in his hands he must open it(give out)...those who are generous are prosperous.

thanks for this wonderful enlightenment for i now know that ...it is in SELF-SACRIFICE and not SELF-HELP that we can grow financially.

thanks for always teaching and motivating young ones like me sir.
am grateful sir..

a nice post from you sir as usual.

Never heard of Kiva before today. I have always been reluctant to give NGos money because of the way they mismanage and diverge funds. Glad this at least appears to solve that problem

Thing with people who feel they need more money before they give is that there is no satisfaction point, they'll always want more.

Meanwhile those who give indeed never lack, physically and spiritually.

Good to see you playing your part and helping others rise. As they say "we rise by lifting others"

You have said a very good thing that if we have to grow and become strong in life then we have to take part in the empowerment of others.
I think that if you have something that gives help to others and his family by giving it to you, in exchange for that thing you will return it, then I should help
Yes Sir, you said a very good way to increase the money.

Yah, this is a good initiative you are taking up @rok-sivante. There are very areas that need this loan and they will pay back, but the money is even there for them to get the loan.

All this small entrepreneurs especially women is they can get this loan, they usually payback.

Good stuff. Upvoted 'n Resteemed.