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Nine Moons » Blog Archive : What I’m Going To Do With My $100 Million » What I’m Going To Do With My $100 Million

What I’m Going To Do With My $100 Million

Rusty - November 30, 2006

A couple days ago I read a blog post in which the following question was posed: “What if you were a wealthy philanthropist who could write a $100 million check to fund any infrastructure or public project in Brooklyn? What would it be?” It’s an interesting question to be sure, as were many of the answers (bike lanes, trolley cars, etc.). However, my mind wandered and I asked myself, “what would I do if I had $100 million to spend?”

The interesting thing about having that much money is that you can’t really blow it on stuff. I mean, sure, you’ll buy maybe a half-dozen nice cars, a couple nice homes, a PlayStation 3 from eBay, and a new wardrobe (which would add up to maybe a few million) but that which costs into the tens-of-millions are investments, usually some kind of real estate or business (which includes stocks/bonds). Those who have that kind of money are keenly aware of the difference between an asset (that which brings in money) and a liability (that which takes your money) so they usually purchase assets (therefore making themselves even more money).

So after buying a few million dollars of worldliness I would have to decide what to do with the remainder. Because (after I spend millions on myself) I’m the most giving person I know, I would want to help ease the suffering of others around the world. There are countless ways of accomplishing this (giving money to the Red Cross, working in an African orphanage, donating supplies to Katrina victims, etc.) but I’ve come to the conclusion that the most effective way to help people is to help them help themselves. Or, in other words, teach them to fish.

One of the greatest inventions of our time is microcredit (small loans to the poor who are not bankable for the purpose of education or entrepreneurship). The brilliant thing about this concept is that it is a cradle-to-cradle system. The lender is lending money, not donating it. You can start out with a million dollars, loan it all out, and after the term you will have your million dollars back (plus any interest you impose, minus any defaults). You are giving to the poor and getting your money back. Muhammad Yunus and the Grameen Bank just won the Nobel Prize for their work in pioneering this idea.

If you’re thinking that the Church already does this with the Perpetual Education Fund, you’re thinking would be right. Their fund specializes in (wait for it…) education. From what I gather it’s been very successful.

Yesterday I discovered one of the greatest ideas I’ve seen in a long time, a website called Kiva that allows anyone to be the microlender. I can get on, research the database of entrepreneurs (in poor countries around the world) and choose to whom I will lend money to (as low as $25). Because of certain checks and balances they claim a 95% repayment record. That’s pretty dang good.

Yeah, yeah, I know, it’s not a perfect system, lots of people default, millions of people need fresh water more than a loan, I know all that. But I just can’t help but think that this is the best system available for helping the largest number of people out of poverty. And besides, I’ve already got my Rolls Royces.

13 Comments »

  1. Not to dis microcredit in general, but a heads up on the Kiva site. You are basically giving an interest-free loan to a middleman, who then provides an interest-bearing loan to an entrepeneur. You bear the risk of default, but the middleman collects the interest. Who are we trying to help here–the entrepeneur or the middleman?

    Comment by Last Lemming — November 30, 2006 @ 1:52 pm

  2. LL,
    Yeah, I know that, and like I said, the system isn’t perfect. Kiva is a new thing and they are working their wrinkles out (ideally working out a way to pass the interest on to the lender). From what I understand there are legal issues at stake with some of these small governments.

    But, all that being said, I still don’t have a problem helping the middleman if it helps the entrepreneur. It’s not like the entrepreneur is going to be able to get on his Paypal account to retrieve the money.

    Comment by Rusty — November 30, 2006 @ 2:13 pm

  3. One site I like is Charity Navigator which displays financial information on many charities so you can see exactly where your money is going.

    Comment by Connor — November 30, 2006 @ 2:26 pm

  4. Microcredit its great!! My daughter was involved with the program through BYU.

    One comment about your post Rusty, they just did a 20/20 last night on giving, who is giving, how much, from the Ted Turners to the regular people. They also featured a study that showed that giving of yourself/time produces better health for the giver.

    One thing the program pointed out was that people who know how to make big money can actually help more people by investing their money in their own businesses creating more jobs for people who then created more jobs etc.

    If it’s good enough for the filthy rich then I’m going to continue with the idea. Maybe I’ll open another business or two – problem is I borrow like crazy to employee people – kind of a different program.

    Thanks for the Kiva site, I think I’ll participate. How great would it be if everyone on the blog contributed?

    Comment by Don Clifton — November 30, 2006 @ 3:52 pm

  5. I give money to the one charity that addresses what I think is the worst problem solvable by money. Is there any reason I should ever give to another charity until the worst problem is solved?

    Comment by gst — November 30, 2006 @ 7:05 pm

  6. gst, what is the one charity that you give to? I love to give to the PEF and the Clean Water Initiative (of the church’s humanitarian aid group). Kiva sounds like a great idea to me too, but I want to see the auditing records. The church should start their own Kiva type fund, I think. It’s such a great idea. And I just trust the church more than other charities, particularly because I know they don’t use any funds for administration, and use all volunteer labor.

    Comment by Tatiana — November 30, 2006 @ 7:22 pm

  7. You could be like Warren Buffett and give it to Bill and Melinda Gates.

    Comment by ed johnson — November 30, 2006 @ 8:12 pm

  8. The biggest thing I found interesting about the 20/20 special was their findings on who gives the most. those who give the least percentage of their income are actually the middle class. However, conservatives give, on average, 30% more than liberals. Religious people give more than anyone (time and/or money) including things like blood and such.

    Also, though the U.S. government gives the smallest percentage of it’s money (compared to European countries and that) the American people give more then anyone else by FAR! Nearly 260 billion annually! Plus volunteer stuff always works better than the government money which usually gets squandered by some corrupt third world government.

    That’s why it’s funny to see these idiots like Bono and Angelina Jolie campaign for the government to give more.

    Comment by Bret — November 30, 2006 @ 9:40 pm

  9. I’ve come to the conclusion that the most effective way to help people is to help them help themselves. Or, in other words, teach them to fish.

    So after having $100 million drop in your lap, you’re going to take a chucnk and teach some po’ folk how to fish? Sweet! And then, after all the backs are patted and awards for charitable work distributed, you get your money back with interest! Man, I can’t afford not to be charitable!

    That’s why it’s funny to see these idiots like Bono and Angelina Jolie campaign for the government to give more.

    Go get ‘em! Speak truth to power! Crush those self-inflated egos and their misguided cajoling of the World’s Most Generous Country!

    Comment by Peter — December 1, 2006 @ 4:58 am

  10. Sheesh, Peter, a little sensitive today? How can you interpret anything I’ve said (that wasn’t a joke) as being selfish or insensitive?

    And in fact, if the system works like it’s supposed to, you actually can’t afford to not be charitable because you wouldn’t be out any money whatsoever.

    Comment by Rusty — December 1, 2006 @ 12:55 pm

  11. I’d pay off the student loans, get some needed office equipment, get a college tuition investment going, buy some stuff for my wife, maybe about $50 worth of fun stuff for me…

    Then the rest goes to Colorado Legal Services, Wyoming Legal Services, Fast Offering donations, and my local NPR station. The Church already getting it’s cur from tithing of course. And you have to factor in income taxation…

    I don’t really want to be rich. I’m not sure I’d like what it would do to me.

    Comment by Seth R. — December 1, 2006 @ 1:50 pm

  12. Hi: I had the honor of interviewing Professor Yunus a few weeks ago. Check out my two video installments with the Nobel Peace Prize winner. (He was so eloquent, we had to make two videos!!)

    http://youtube.com/watch?v=6lya8f8RAag and http://youtube.com/watch?v=2H0PEle9G0U

    Comment by Victoria — December 5, 2006 @ 10:24 am

  13. I would build a tower in downtown Lethbridge with an underground parkade, retail on the ground and second floors, office space on the next dozen floors and residential space on the top dozen floors.

    Or I’d start a hotel.

    Or I’d buy the derelict Paramount Theatre and the neighbouring, abandoned Paramount Coffee Shop and renovate them to their former glory.

    Comment by Kim Siever — December 5, 2006 @ 3:50 pm

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