Sunday, April 29, 2018

Financial Education 402: Make the World a Better Place

Okay, I get it’s cliche, but money is only worth what someone else will give you for it. And if you make it this far, like saving a ton of money, what are you really going to do with it? 

Give Directly is sponsoring a 12 year basic income experiment in Kenya and paying everyone in the village is $22 a month. $22 a month! When I think about universal income that we could make work in the USA I come to numbers like $700 or a $1000 a month. In other words, money  can go something like 40 times farther in actually poor places like sub-saharan Africa than in highly developed places like the USA. Don’t get me wrong, there is need here as well. The opioid crisis is pretty bad, that’s probably why I was burglarized last year, but it’s not like it is in the poorest places in the world. 

When I see numbers like that, $22 a month being a huge change for people, it’s heart breaking. Sometimes I want to leave my life behind and go to a place like that. For one, I have enough money I would not have to work the rest of my life. For two, I like to imagine that the opportunity in those places is enormous. I could start a bank and loan out money, and go check on all of the people with farms and businesses I was loaning to. I could probably fund two teachers, myself, educating dozens of children, out of my pocket, not their parents. you see, public education is not a right around the world, it’s a privilege that we enjoy, and frankly one that I like that we have made a right. I could help with engineering projects and construction.

Give Directly is just one example. For better or worse, sometimes donations to medical centers or universities seem to be a status symbol. I mean, it’s a better status symbol than the car you drive, or how many bathrooms your house has. There are hundreds of great charities and non-profits in the world. Be sure to find a way to pay your fortune forward to those less fortunate.

A while ago I was reading about Bill and Melinda Gates  and Warren Buffet and they planned to leave their kids “enough money to do anything, but not enough money to do nothing”. Now that I am older and more well read than I was when I read that, it means something different to me now. In the United States, that’s probably about a half million dollars. At three quarters or a full million dollars, and a paid off house, you don’t necessarily have to do anything the rest of your life, regardless of your age. No, it’s not a luxurious existence, but it’s not poverty either. Past a million dollars, you’re basically increasing your standard of living for the remainder of your life. In other words, $2 million given to an 18 year old, or a 40 year old, with decent management, would allow that person to never have to work again, and live on something like $60,000 to $70,000 a year income. I’ve spent most years of my life living on less than that. And on the other end of the spectrum, going to medical school, starting or buying a business, can all eat up several hundred thousand dollars quickly, but having a million or two doesn’t really present that many more options for a career. The only thing I can think of as a career that could take more than $500,000 is starting a business that takes a long time to show any revenue, like a car company.

Point being, leave this place we call Earth better than you found it. You can’t take the money with you when you die, and you could possibly die in a traffic accident tomorrow. So somewhere between planning for a long term future, and living today as if it is your last there is a good balance, and it’s different for you than for me. Hopefully if you read all the way through this little series you learned something. In particular, I hope that this series helps at least one of my friends who is living paycheck to paycheck prepare for the future, and eventually, help another person less fortunate than her or him.

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