The Karmic Capitalist: Should I Wait Until I'm Rich to Give Back? (Plus: Auction and Tim Q&A via phone)

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Should I wait until I’m rich to give back?

This is a question I have fought with a lot over the years.

Spending time with the upwardly mobile in places like NYC and LA, one can’t help but believe the consensus: It is better to wait until you have made a lot of money before trying to change the world. The idea (excuse?) is that you can then have a greater impact. But is it really true?

I no longer think so. There are a few reasons I have decided to commit at least $100,000 of my own money to education in the next 12 months:

1. Giving back is like investing with compound interest.

Less money earlier often beats more money later.

$1,000 invested now may very well have a much greater impact — due to growth and ripple effect — than $10,000 invested in ten years. How many world leaders and innovators could you create or save if you acted now instead of at an undefined “someday”?

Here’s an extreme example of how time changes value: Manhattan was bought for $27 in 1626. Invested at 7.5% then, compounded yearly, that $27 would be worth $22,224,711,000,000 now. Or compounded quarterly: 4.73442004 × 10^13 ($47.3 trillion). To put that in perspective, the entire yearly GDP for the USA these days is around 7 trillion. (Thanks to Ryan for this example).

Act now and very little can do a hell of a lot.

2. Prevention costs much less than cure and is ultimately more powerful.

For example: to educate a girl for 10 years in the developing world, ultimately producing an economically self-sufficient family and ending the cycle of poverty, costs a total of $2,500 with Room to Read. How much does it cost to provide aid or welfare to an entire family for decades on end, not to mention treating the famine, disease, and violence generated from this collective poverty? Look at Africa and the $50 billion+ that has been given as aid.

Charity doesn’t work — empowerment does. The good news is that the latter depends on acting early and precisely, not lots of money.

3. Giving is an investment in yourself.

Giving shouldn’t be viewed as losing anything.

Based on previous polls on this blog, 32.2% of you make $51-100K per year and more than 20% make $100-200K per year. Regardless of income, could you afford to empower 100s or 1,000s of others with 5-10% of it, especially if it permanently increased your feeling of self-worth and contribution? Of course.

In fact, this self-perception boost is one of the greatest bargains, and performance enhancers, on the planet.

4. Changing the world is cheap.

Changing the world doesn’t require much money. Again, think in terms of empowerment and not charity. How much were Gandhi’s teachers paid? How much did it cost to give Dr. Martin Luther King the books that catalyzed his mind and actions?

Just imagine that you and your friends make $40,000 per year. Imagine that you convince just 5 of them to join you in building a children’s school in Nepal dedicated to your parents (or your lifelong friendship). The total cost? 5 people x $3,000 each= $15,000. I know that most people, myself included, will put $3,000 of crap on credit cards in the next few months that could instead create a miracle… a miracle that you can visit.

You and your friends could plan the trip of a lifetime in 6-18 months to visit the completed school, teeming with dozens or hundreds of students who greet you with smiles and thank you letters. You’ll know it’s your school because your names will be on the door.

If that seems like too much, you can finance a girl’s education for 10 years ($2,500) and effectively guarantee a future without poverty to an entire family. How would you feel about yourself if you just did it and pulled the trigger now?

I can tell you — it’s amazing. It changes your life almost as much as it changes theirs, and you won’t miss the $2,500. I guarantee it.

If you haven’t given before, I encourage you to do it now. Just do it. Take it for a test drive and see how it changes you. On the personal side, you’ll feel great about yourself for a long, long time. On the results side, especially with the groups I’ve researched and selected, you’ll measurably improve the world, something few people do, and possibly win some amazing prizes I and others are offering to people who donate this month.

To whet your appetite, check out some of the projects to pick from here. From there, it’s as simple as checking out the next step.

[kml_flashembed movie="http://www.youtube.com/v/qbcNuaatFRA" height="350" width="425" /]

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[Note: If you want to find my responses to comments/questions below, just search (Ctrl + F) "###", which I put before each of my responses in all posts.]

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113 comments on “The Karmic Capitalist: Should I Wait Until I'm Rich to Give Back? (Plus: Auction and Tim Q&A via phone)

  1. I loved the post and wanted to share this relevant website and story below. Check it out!

    This is a terrific website for learning for the students. The founder is a young educator, Salman Khan (no, not the Indian movie star:-)). His story is very inspiring (his interview was on India Currents magazine recently and he has been on PBS too). He was raised in New Orleans; his parents – mother from Calcutta, India and father from Bangladesh – divorced when he was just 3 and father died when he was just 13 and raised by single mother. He received his bachelors and masters degrees in computer science, electrical engineering and math from MIT and MBA from Harvard.

    He quit his day time job as a hedge fund analyst to start Khan academy as a non profit organization and until recently was making just a few thousand dollars from donations and advertisement. His mission to give access to a world-class education to billions of students around the world. In September 2010, Google announced Khan Academy as one of the winners of 10 to the power of 100 project awarding him $2.0m for inspiring and impacting the lives of people by making educational content (videos) free. Bill Gates is a great fan of Khan Academy and announced that his videos are unbelievable and he uses them with his kids.

  2. You are absolutely right, there is better time than right now to give back. Even if all you had was 20 bucks to your name, a well placed $1 could change the direction of someone’s life. This “habit” of giving back, whether in money or time or etc…, is something you develop now so that it become second nature later on. Look, if one can’t give $1 when you have $20 , will you give $1 million when you have 20 million?

  3. I feel bad for people living in areas in need of aid and yet generation after generation, century after century these same folks who are at the mercy of all the negative affects of poverty, hunger, disease and lack of education continue to expand the population ensuring an endless supply of people in need.

    In the US you’d call these people bums and child protective services would take there kids away and rightfully so IMO.

    I support the idea of giving and have ran many charity runs, participated in many event’s for various causes, given to the homeless and needy especially the salvation army and have helped create events to support battered women.

    But I think Dennis Miller said it best when he said “I want to help the helpless, not the clueless” You seem to be advocating to help the clueless

  4. Hi Tim,

    So at the risk of sounding like another one of your millions of adoring fans… What can I say? You’re my new Hero.
    Read and loved the Four Hour Work Week, but The Four Hour Body has become one of my all time favorite books (this is from a girl whose mother banned from the library in junior high).

    2 things.

    1. I am breaking the World Record for longest consecutive massage of 74 Hours to raise money for Direct Relief International ($1 million goal ). It’s going to be on July 1st through July 4th. I knead bodies. Instead of running a marathon, you get a massage instead and it goes all to charity. I know the chance of you being a body is like 1%, but I had to ask. For other fellow Ferriss lovers, your body is kneaded too.

    2. Thank you. So much. You are hilariously brilliant and really inspiring. Thanks for setting a great example. I mean all of this in the most sincere noncheesy way. I am embracing cold showers now and telling everyone to go read and buy your books. If you ever feel like a Four Hour Massage/Bodywork session, I would be honored to work on you (on the house, no need for anything in return). I am in Lake Merritt in Oakland; you can Yelp me. From B-boys to Martial Artists, I specialize in Deep Tissue Thai, Ashiastu Oriental Bar Therapy, and my own version of ART.

    I appreciate you a lot. Thanks again
    Judy Ko, AKA 74 Hours

  5. Loved the blog, Tim. When people learn I do cat rescue volunteering, they sometimes tell me that when they retire or get that inheritance, etc. that they, too, plan to do animal rescue. I quickly tell them that they can do it now. I say, “Don’t wait. You can save one dog a month by fostering or one dog a week.” They give me excuses. The same tired ones. They only really want to help animals if it’s convenient. That is simply not how it works. I do cat rescue on a modest income. You do what you can, and furry feline by furry feline, you progress and make a difference in their lives. It’s a form of giving that has immediate results that you can see and touch. I believe what you believe, Tim. You can’t wait until you are rich. You might never get there. You have to jump in now and reap the rewards and satisfaction that your 9 to 5 job will never provide.
    Ann

  6. Love this post! I have been donating my services and talents for years to causes and organizations that I appreciate, more recently I decided to step it up by finding some powerful partner organizations to build a platform to give back through media, our debut documentary on giving back to the places we visit:
    http://igg.me/p/118177
    Hope you dig… and maybe share?

  7. I stumbled on Tim’s website this morning while surfing the Web and I have to say I’m blown away. Renaissance Man is an over-used term but this guy exemplifies it in the 21st Century. He’s a great communicator as well as a dynamic individual. But what impresses me most, beyond the overwhelming accomplishments, is ultimately his deeper motivation to create and manifest practical and meaningful solutions to better life across entire planet, He’s the kind of person everyone should aspire to emulate.