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The Antidote for Greed Monday, July 28, 2008 Dear
Reader, At a conference in Las Vegas a
few weeks ago, I participated in a panel discussion called "Libertarian
Millionaires: How to Make It, How to Spend It, How to Give It Away." I shared a couple ideas on
making it and spending it in a recent Investment U column. Here are a few thoughts
on giving it away. The English architect John
Foster once remarked that the loudest laugh in hell is reserved for the man who
dies rich. (Presumably because the decedent had neither the enjoyment of
spending it nor the pleasure of giving it away.) We all know shrouds don't have
pockets - and hearses don't have luggage racks. That doesn't mean that giving
your money away isn't a challenge. Most of us struggle to earn a
decent amount, spend a reasonable amount, and save and invest a prudent amount.
Unless we plan, charitable giving can get short shrift. Of course, we want to give
intelligently. So we grapple with who should get it, when we should give it,
and how much we should give. These are deeply personal
questions, of course. And I'm no more certain of the answers than the next guy.
Fortunately, we have a couple millennia of wise commentary to guide us. According to the medieval
philosopher Moses Maimonides, for instance, there are eight grades of charity: 1. To give reluctantly This ladder provides a good
gauge of our charitable disposition. If we want to move up, we need only ask
how to get started and when. The answer to the second
question is easy. Now. It's a mistake - albeit a comforting one - to imagine
we'll start giving when we reach a certain income level or net worth. Like studying or exercising,
giving only becomes ingrained when we engage in it regularly. If you aren't
charitably disposed now, becoming rich isn't likely to make you so. That makes
it imperative to give along the way. Most of us already are.
According to the Giving USA Foundation, the leading researcher on philanthropy,
two-thirds of U.S. households with incomes of less than $100,000 give to
charity. Americans gave away over $295
billion in 2006, the most recent year that figures are available. That makes
the U.S. the most charitable nation in the world. And not just in terms of the
gross amount given... According to a recent study by the Charitable Aid Foundation, Americans
give twice as much (1.67% of GDP) as the next most charitable nation, the U.K.
In fact, Americans give more as a percent of GDP than France, Germany, Turkey,
Singapore, New Zealand, and the Netherlands combined. How much should you give
personally? Some say 3% of after-tax income is a good goal. Tithers strive for
10%. The well-to-do often give much more. Ultimately, you must decide. Mary Hunt, the creator and
editor of the Web site Debt-Proof Living, says her family continued to give 10%
of their after-tax income to charity even while digging out from more than
$100,000 in credit-card and other unsecured debt. Some financial planners would
argue that it's foolish to contribute to charity while paying exorbitant
interest rates. Hunt disagrees. She says she could have paid the debt down
faster - it took 13 years - but is convinced the donations helped provide the
discipline to make her debt free. She believes in regular,
systematic giving, calling it "the antidote for greed." There are other benefits of
charitable giving. Yes, you'll receive a tax deduction. True, it may force you
to better manage the rest of your money. And, if your giving is sizable, you
may receive public recognition. All good. But you'll also feel
better about yourself and appreciate more the blessings in your own life. This doesn't require money,
incidentally. As Maimonides reminds us in level eight, we can do more than just
share our riches with another. We can reveal to him his own. Time spent helping others do
more for themselves can be the highest form of giving. Give a man a fish and
he'll eat for a day. Teach a man to fish - and he'll sit in a boat and drink
beer all day. (Sorry, but you already knew
the original chestnut.) Money, of course, is the way
most organizations get things done. But dollars and cents are only one kind of
gift. Those of lesser means can
always give a portion of themselves, whether through a thoughtful act, a timely
suggestion, a helpful idea or a word of appreciation. As John D. Rockefeller Jr.
observed, "Giving is the secret of a healthy life. Not necessarily money,
but whatever a man has of encouragement, sympathy and understanding." In the end, our worth is
determined by the good works we do, not the fine emotions we feel. And while we may not always
have happiness, it is always possible to give it. Carpe Diem, Alex P.S. There are hundreds of
charities worth investigating or contributing to. However, if you share my
interest in "increasing liberty and decreasing misery," feel free to
check out two of my favorites: the International Rescue Committee and the Cato Institute. Know someone who would benefit
from reading Spiritual Wealth? Just send them the following link,
and encourage them to sign up. It's free: www.spiritualwealth.com/siup/signup.html Alexander Green is the Investment Director of The Oxford Club and Chairman of Investment U, a free, internet-based research service with over 300,000 readers. (The Oxford Club's Communique, whose portfolio he directs, is ranked third in the nation for risk-adjusted returns over the past five years by the independent Hulbert Financial Digest.) Alex has been featured on "The O'Reilly Factor," and has been profiled by Forbes, Kiplinger's Personal Finance, CNBC, and Marketwatch.com, among others. He lives in central Florida with his wife Karen and their children Hannah and David. |
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