Small interventions with charity – big impact on society

If you follow my blog you would know I am a big fan of 80/20 – small causes which can create big impact. I am all about using leverage- in the positive sense.

I am also big into doing charity because it is good Karma.

But I think not all charity is created equal. In my opinion if you do charity to solve a problem at the grass root level then in the long run it can have a major impact on the society. Its all about prioritizing how your funds can have the biggest impact.

In India one of the big challenges we face is poverty. So poor people don’t send kids to school because they get additional hands to work, earn money and therefore feed the family.

Since the kids don’t go to school they also spend their life in poverty-stricken situations. This also leads to an increase in crime, drug abuse etc.

A simple solution that was found, was to feed kids in schools so that the kids get one good meal. Now the incentive for the parents to send the kid to the school is not educational but the lunch that the kid will get. On the other hand for the government and society the long term benefits are better, healthier citizens who may eventually come out of poverty and the crime rates will also be lower.

The challenge is how do you feed so many kids. That’s where NGOs come in. They take donations from people like us.

A lot of NGOs do good work. However I support these kind of charities because the small interventions of feeding say 25 kids for a full year, every year will ensure that 10 years from now I know there will be 25 less people who will be on the road living in poverty. The amount needed to feed one wholesome nutritious meal to say 25 kids for a year would be just USD 500 but the long term impact could be so amazing.

Mohnish Pabrai runs a similar program where he helps kids get trained for higher education and sponsors their education. The Grameen Bank founder and Nobel prize winner did a similar thing by giving micro loans to the poor people so they could do their own business.

While all charity is very good, give wherever and whenever you can, however if you can also do some focused charity it can have major long term benefits for society.

Till next time then.

Carpe Diem!!!

Sponsored meals for one year for 12 kids.

Financial Independence, Uncategorized

In my blog of 10th December 2018, I had mentioned that using Paul Dunn’s concept of Buy1Give1(B1G1.com) in a slightly different way- because I don’t have a business of my own – I intend to give away a dollar for ever new follower of my blog/website and Linkedin – and achieve my objective of donating to my charities on a regular basis.

Based on the number of followers I have today on my website/blog and the new followers on Linkedin, I have added a dollar for each. I have been able to donate meals for one year for 12 kids on Akshay Patra. I have a target to reach the capability to sponsor one meal for one year for 100 kids. If the number of followers on my blog/website and Linkedin keep growing I should be able to hit this number also pretty fast. Right now I am active only on these two. Slowly I will raise my activity levels on other media as I see success. If you are interested in knowing more about the work the click Akshay Patra.

If you compare Tony Robbins’ agenda he wants to be able to feed 6-8 million people in a year. He has written 2 books Money Master the Game and Unshakable and donated all the proceeds to help achieve that objective.

My achievement seems so small compared to what Tony is doing. But as I mentioned, I got inspired by Paul Dunn’s Ted Talks that even very small regular interventions can dramatically improve the world. If you have not heard Paul’s 4 Ted talks, I sincerely suggest you watch them. So what I used to do haphazardly and irregularly earlier, now becomes a system.

In multiple posts earlier, I have mentioned that I follow Mohnish Pabrai, the US based fund manager who runs Pabrai investments. He runs the Dakshana foundation to which he is every year donating a certain portion of his wealth. Mohnish is an ardent follower of Warren Buffet and like Warren, wants to donate a certain portion of his wealth every year. This foundation helps poor, deserving kids in India, who have potential, to get trained so that they can appear for entrance exams and qualify for the best engineering (IITs) and medical institutes(AIIMS) in India.

Now Mohnish has a major lament, which I have noticed in his YouTube videos. He believes that given the speed at which he is donating his wealth year-on-year to Dakshana, there will not be enough deserving kids left who have potential to be trained. His feeling is that there are not enough deserving kids coming out of the government/municipal education institutes in India.

One of the reason for that, is that poor parents don’t send their kids to school even though school education in India is now virtually free in all states. They want the kids to work and earn some money, so that the family can be fed. The more hands working the more possibility of earning. If we eliminate the challenge of feeding the kids, that too with a very nutritious meal, then these parents will also send their kids to the government schools. Akshay Patra kind of organisations are helping achieve that goal. Once the kids are fed well, they will be more healthy, have less sickness and they will hopefully also learn well and then the Dakshana Foundation kind of organisations will get more kids to train for higher eduction. Once more kids get educated they will bring up the “standard of living’ of their families. From the ground-up we will be able to take India and the world forward

Again the 12 that I have sponsored or the 100 that I have a target for, may not create a positive Tsunami but if more people like me keep doing these small interventions we will make this world a better place.

Till next time then….

Carpe Diem!!

Books that have influenced me in my financial education

Financial Independence, Uncategorized

In our education system unfortunately even now we are not taught life skills. Whether it is on building interpersonal relationships or financial literacy the education system even after 16 years of highly competitive education does not prepare us for living a life. I know this about India. You could tell me your experience with other countries.

During one of a recent gathering at home we gave some books to some of the kids on investing. The idea was that if the kids can learn this at a young age then they will be better off. One of the kids asked on what other books had helped me during my journey.

While there have been a lot of books and company annual reports and videos, I will give you some names of books and what I learned from each book in this and the next few posts. Maybe we will even go further for the annual reports and videos in later posts. The books listed here are by no means in any order of ranking.

Tony Robbins – Money Master the Game – I have given this book as a gift to others and highly recommend especially if you stay in North America because some of the concepts are truly North America focussed. This book has interviews and experiences of some of the best money minds other than Warren Buffet. The book is written in a very simple language and has inputs on creating the edge in your investments. This is a very big book to read. A few key things that stood out for me-
- Tony was giving away all the earnings from this book to a charity foundation and also adding an equivalent amount from his own. Most of the rich people I have read believe in giving back to society and magically their investments only keep growing
- Saving versus investment – if you have to create wealth you cannot create it by saving. you have to invest.
- Sir John Templeton – even though he was just earning 50 pounds a month, he created such a big financial empire by saving more than 50% of his income every month.
- Asset allocation – all investments will have cycles. Equities will rise and fall dramatically. The fall can destroy your earnings if you entered the equity at a high price. By having debt and some commodities in your portfolio you can ensure that the rise and fall you have in all types of investments is buffered. Depending on your risk profile ensure that you have some kind of allocation.
- Automating and paying yourself first- always automate your investments so that there is no emotion involved because otherwise you will always have expenses which will eat up your money and you will never invest.
- A third very important concept was fees paid to fund managers and how the small percentages of fees taken by the fund managers can impact your long term growth. In India SEBI is doing a decent job of controlling the expenses charged by mutual funds. Especially if you don’t have the bandwidth of researching multiple companies, going with a mutual fund in India makes sense. Another place where mutual funds in India are better bet is the small and mid size companies. As an individual investor you will not have the information on these companies which these institutional investors can get. In India for the large companies like in the US investing with index funds/ETFs where the fund charges are extremely low makes more sense
- The last key perspective from my point of view was the distributor’s role. If the distributor is biased by the commission she gets, she will never give you proper advice. So you should choose your financial advisor different from your distributor to get proper advice on investments.
Mohnish Pabrai – The Dhando Investor. A very simply written book about how the Gujarati community has created riches in America by buying when the markets were low and then capitalising when the markets went up. Markets follow cycles, they will go up at some time. Mohnish uses this to showcase how buying quality stocks at low cost can help make huge money. Mohnish is big follower of Warren Buffet and has his own investment firm Pabrai investments. Like Warren he also does a lot of giving away of his wealth . His foundation Dakshana is involved in training a lot of financially weaker students to train for IIT and AIIMS.
Alice Schroder – The Snowball – A biography of Warren Buffet. There are a whole lot of books on Warren. Even I will list some more which have helped me understand investing. This one however takes you up and close to the real Warren Buffet from his childhood and how his decisions have helped him today become the richest man in the world even after giving away so much of his wealth. The biggest takeaway out of reading this huge book for me was the concept of deferring your urge to spend. There are various examples in the book where Warren thinks if he should be spending a few dollars now or investing such that he could have a multiple of the amount to spend. Now some people could call him stingy, Some people whom I have given this advice have also told me then why earn and live if we can’t spend. You need to be a judge of this for yourself and decide your priorities. Warren had a goal to be a multimillionaire by his mid thirties and he achieved it well in advance of his target. One other aspect is his commitment to give away a certain portion of his wealth every year till the time he dies.
Peter Lynch – One up onWall Street – this book gives such a simple advice on how to invest. His logic is simple. The numbers and frameworks and everything else is for the big investors. For the small investor like you and me he gives a very simple idea. Invest in companies which you use everyday and your investment will be successful. Out of the mutual fund universe, the shares I invest in are the ones which I use. Whether it is my bank or my housing loan or the shampoo we use, I have looked at investing in only those companies. I also get the pleasure of knowing that what I am buying, some portion of the profit would come back to me in the form of either dividends or by the capital appreciation of the stock

This post has kind of become big already. I still have a lot of books to talk about. Each of these books gave me a few ideas to form my investing philosophy. So I will cover these in the next few posts.

Till then

Carpe Diem!!!

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