Livelihood
BioBrite Sunrise Clock
The recent return to so little sunshine had me reflecting on a wake-up combo that's so subtle I enjoyed it for years without really recognizing it. I use a dawn-simulating BioBrite alarm clock along with a programmable thermostat (anyone who has central HVAC without a programmable thermostat these days is just missing out). The combination of light and warmth really gets me awake at consistent times in the morning without really relying on any audio cues. The BioBrite can also be adjusted to increase the light output over longer periods of time (15/30/60/90 minutes), reversed to simulate dusk, or be used as a nightlight.
In the winter, having light come up along with heat is the most natural way to ease back to consciousness that I can imagine.
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Your Money: The Missing Manual
This is the best user-guide to personal finance I've found, and I've probably read them all. It is certainly the sanest and most level-headed. There are no get rich quick schemes here, just plenty of ways to get rich slowly. Indeed, Get Rich Slowly was the name of author's very popular personal finance blog, which led to this book. J.D. Roth takes the great investing advice of Andrew Tobias in The Only Investment Guide You'll Ever Need, and he summarizes the life-earning wisdom in the previously reviewed (and still recommended) book Five Rituals of Wealth and he includes the needed crystalization of priorities found in Your Money or Your Life, and financial motivations from Suze Orman and the Millionaire Next Door and then adds key insights and tips from hundreds of other lesser-known money gurus.
Basically, Roth has read every book and blog on money managing, investing, saving, and earning and digests and integrates all this hard-won knowledge into an amazing selection of smart, practical ideas for today. I could hardly turn a page without learning a solid investing tip or two, or a clever way to save a few hundred dollars, or an example of something I already knew, but was looking for a vivid way to teach my kids. I like the fact that Roth emphasizes the value of sharing whatever wealth you have, and keeps returning to the long view.
I would not call this an inspirational book (plenty of those on the shelves), nor even a memorable book like the ones mentioned above. Rather it is what is advertised: a day-to-day operating manual for your money. Specific details, sources, methods, tricks. Dip into it when you are stuck, check it before trying something new, re-read it when you think you know it all. I've done pretty well financially, and if you were to ask me my practical advice -- like what to do tomorrow -- I would simply give you this book. It's slow, but true.
Because you earn pre-tax dollars but spend after-tax dollars, a penny saved is actually more than a penny earned. Depending on your tax bracket, you might have to earn $111 , $133, or even $150 to put $100 in your pocket. So if you re in the 25% tax bracket, saving $750 a year is like giving yourself a $1,000 raise!
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Destroy Existing Debt
After you've stopped using credit and created an emergency fund, then go after your existing debt. Attack it with vigor, throw whatever you can at it. The best way to do this is to use a technique called the debt snowball, which lets you build and maintain debt-destroying momentum. Here's the basic method: Make a list of your debts in the order you want to destroy them. (You'll learn a couple of good ways to prioritize debts in a moment.) Set aside a certain amount of money to pay toward debts each month ($500, say). Make the minimum payment on all debts except the first one on your list. Throw every other penny at the first debt on the list. But here's the key to making the debt snowball work: After you've destroyed your first debt, you'll find you've freed up a bit of cash; because one of your debts is gone, you have one less monthly payment. You could take this money and use it for something else, but you re going to do something smarter: keep paying the same total amount, $500 in our example, toward the debt every month.
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Destroying low-balance debt first
If you've tried following the highest-interest-rate-first advice and still struggle with debt, there's another way. In his book, The Total Money Makeover, Dave Ramsey advocates an approach to the debt snowball that tackles accounts with low balances first. (Ramsey didn't invent this method, but he's popularized it over the past decade.) With this version of the debt snowball, you ignore interest rates when determining the order in which you'll pay off your debts. All you look at is how much you owe, organizing the debts from smallest balance to largest balance.
That's not to say you shouldn't try this method: If it works for you, use it! But if you struggle, consider the next method, which is the one that helped me succeed. It might help you to have a visual representation of your debt-paying progress. Try this: take a piece of graph paper and block off squares to represent your debt. (You might use one square for every $ 100, say.) When you make a payment, mark off a square and give yourself a pat on the back. (If you re a geek, build yourself an Excel spreadsheet that does something similar.) These little progress reports are cheesy, but they can keep you on track.
This method may not be as quick as paying your high-interest debt first, but it provides tremendous psychological reinforcement. You get some quick wins checking creditors off your list that encourage you to keep at it. Dave Ramsey calls this behavior modification over math, and he's right: the most important thing when paying off your debts is to, well, pay off your debts; the order in which you do so is irrelevant. Critics of this approach argue that the math doesn't make sense, and they're right: If you use this method, you will pay more interest than if you had the discipline to pay off your debts based on interest rate. But humans are complex psychological creatures, not adding machines. We usually know what we ought to do, but that doesn't mean we always do it. If we were adding machines and always made the best choices, we wouldn't get into debt in the first place!
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Caretaker Gazette
I’ve used the Caretaker Gazette to live rent-free for the past three years. A friend told me about this publication, which has been around since 1983, and I’ve used it to find positions living as a caretaker in California and Idaho. In exchange for my accommodations, my duties have included keeping trespassers off the property, taking messages, mowing the lawn, cleaning the pool and generally watching over the home when the owners are away.
My subscription includes PDF listings online, weekday e-mail updates and a print version (same as the online PDF) mailed out once every two months.
ALASKA
CARETAKER NEEDED late September to May on a self-sufficient comfortable Aleutian homestead. Free housing and stipend. Orcas, eiders, sea otters, caribou, hydroelectric power, Internet, loom, hot tub. Writers and naturalists have prospered here. Please call (907) XXX-XXXX.
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HAWAII
CARETAKER(S) NEEDED. Responsible, competent single man or couple, with one child OK, with strong body and alternative minded. Must be enthusiastic about rustic jungle life, experience with off-grid living and solar equipment. No tobacco or alcohol users please. Maintenance of 2-acre homestead in a beautiful coastal jungle area in an eclectic, but rootsy, neighborhood on the Big Island. Care for orchards, garden, and cats. Small but comfortable cabin provided. Please send a letter explaining why you are interested in this opportunity, to: XXX XXXXXX, XX-XXXX Napoopoo Rd, Captain Cook, HI 96704.
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BELIZE, CENTRAL AMERICA
HOUSESITTER WANTED during owner's absence. You can explore the jungle, fish, snorkel in the coral reef, or take some canoe trips. I need a housesitter for the month of June. Have your own bedroom, living room and bath on 3rd floor overlooking the Caribbean. Pay for telephone, electricity, and your own food. Please write to X. XXXXX, XXXX SW 138th Avenue, Miami, FL 33186 or call (305) XXX-XXXX.
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CALIFORNIA
HOUSE GUEST(S) wanted to occupy a mountain cottage(s). Full time. Located in the foothills, one hour from Sacramento. Bottom of canyon. Four miles from freeway. You can fish off the porch. Keep all gold found in the river. Must love outdoors, remoteness. Pets permitted. References required. No job. No addictions. Please leave a message, including your name and phone number at (916) XXX-XXXX.
- free
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- travel
Kiva
Micofinancing is among the better ways for the haves to help the have-nots. Small loans are made to poor but ambitious workers, who expand their livelihoods with the small loan and then pay it back. Which is then lent out again. The previously recommended agencies Opportunity International, and Trickle Up are great tools for individuals in developed countries to kick-start other folk's self-development. These agencies do the hard work of identifying and training the recipients, and tracking loans and performance.
But why not use the peer-to-peer model to allow individuals with money to loan to specific individuals in need of a small loan? That's what Kiva does and it works wonderfully.
Kiva enables you to make small $25 or above loans to an individual or small group of individuals in a developing country. They use these small loans (aggregated to about $200-$400) to finance a food stall, repair shop, hair salon, sewing machine, new cash crop, etc. When they pay it back to you in about 11 months, you can then re-lend it to another person of your choice.
The advantages of Kiva over the other worthy agencies are three fold. One, you can direct your loans to the kind of projects or livelihood you deem the most important or the most sympathetic. Maybe you are into food so you gravitate to funding small cafes or local fruit growers. Or maybe you think women's sewing centers are a key. Secondly you have more direct contact with the borrowers. They have names, faces, stories. Not a few Kiva lenders have met up with folks they have lent to. Thirdly, while most microfiance agencies are thrifty, Kiva is particularly thin in administration thanks to the well-designed software platform that runs this service.
The payback rate for Kiva is about 97%. That's a better "investment" than stocks this past year! The variety of folks you can lend to is exhilarating. The karma is good. These loans make a difference. Kiva lends $1 million dollars every 10 days. It is easy to do. A few folks are already on their third cycle of re-loaning the same money they first put up three years ago.
I think the peer-to-peer lending service of Kiva is such a wonderful tool that I have started a Cool Tools Lending Team. The intention is to gather like-minded folks to make microloans to folks needing tools to start or build a livelihood. I've seeded the team with the first $300 of loans to three borrowers planing to use the loans for tools and I'll add up to $1,000 of Cool Tool's ad revenue as the team identifies borrowers hoping to secure tools. Ideally, other Cool Tool readers will join me in lending small amounts to enable others to self-develop and remake their lives. If you are interested, please join me at the Kiva Cool Tools Team.
Sample entrepreneur:
My name is Khursheed Bibi. I am a fifty-year-old woman. I have lived in the city of Pakpattan, Pakistan, for 15 years. My husband, Mr. Rafiq, is a mason. I have three kids: one son and two daughters. My son runs a furniture making business. My elder daughter is in 9th standard and my younger in 8th standard. I run a decorative embroidery business. I embroider dresses and sell them in clothing markets. I charge $3 per dress. I invest my income in my daughters' education (paying school and tuition fees). I've successfully repaid two previous loans from Asasah (a microfinance institute of Pakistan). Now I am applying again for a loan to buy lumber to expand my son's furniture making business. I am the leader of a group of entrepreneurs sharing this loan.
- charities
- finances
- services
The Adventures of Johnny Bunko
Presented in the form of manga (a comic book for grownups), this is the most succinct course in career counseling I've ever seen. Not what career you should pursue, but *how* you should pursue it. You can read this masterpiece in an hour, but it will take a lifetime to work out the details of those six lessons. This compact sermon will make the most difference to those just starting out in the workplace. The six quick lessons [with my comments in brackets] are:
- There is no plan. [The economy changes too fast for your career to have a plan]
- Think strengths, not weaknesses. [Find your advantages]
- It's not about you. [Serving others serves you best]
- Persistence trumps talent. [Keep showing up]
- Make excellent mistakes. [Take risks, but fail forward]
- Leave an imprint. [Do something that matters]
Each point is given consequential flesh in this engaging story. In my experience these six lessons highlight the skills needed at work better than, say, the bestseller Seven Habits of Highly Effective People. And it is far more fun to read. I've bought copies of Bunko for each of my kids and for a few adult friends currently struggling with their path. I'll probably re-read it myself in a year.
- art
- books
- business
- jobs
Money for Nothing
It's a deceptive title -- but in part that's marketing. Seth Godin, master marketer, sums up the best way to drive traffic to your website (or store, or organization, etc.).
Three words: be useful, unique and updated.
Yep, that's about it. If you can be useful to others (offer value), be unique (by positioning and branding, and being memorable and distinctive), keep showing up, and be current, you've got it made.
It's also a good recipe for life.
This free PDF sermon is short, breezy and right on.
No one cares if your lens is good. They care if it's great. Irresistible. The one and only best spot online. Not in your opinion of course, but in their opinion.
- books
- business
- free
- self-publishing
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The Personal MBA
I once dabbled with the idea of getting an MBA. After a life avoiding any work in a business, I wanted to start one of my own and knew zero about it. Like many folks, I thought a heavy-duty school program would cure my ignorance and inexperience. But an official MBA degree can easily cost $100,000. I figured out I would learn more spending $500 in self-education. So I devoted $200 for books and the other $300 actually starting a small mail-order business (the fee went for an ad). In two years I learned more about how business really worked than any MBA graduate I had met. No matter what they tell you, an MBA is not essential for landing or handling a good business job. The chief "skill" you'll come away by your degree is a diploma, and a network of indebted friends in business. The latter is actually useful.
There is another option to an overpriced degree, which is the self-education path outlined above. Pursue your own Personal MBA in tandem with actual experience doing some kind of business. Josh Kaufman has put together an excellent and very hefty reading list which forms the core of his PMBA course. It is downloadable as a free PDF. The recommended readings are wide, deep, holistic, and very good. You could purchase all of these easily available books for $500, and if you combine study of them with actually trying stuff, you'll be far ahead in the business game.
If you go this route, you need to supplement your self-education with a network of live humans engaged in business (the only part of a certified MBA you'll miss).
Kaufman has recently updated his annotated recommended reading list. No PDF yet, but his website is chock full of the new material.
[This post was originally part of Cool Tool's Five Good eBooks. ]
The Personal MBA is not:
A credential. If you read these books, you won't have corporate recruiters beating down your door, and you won't have a pretty certificate to hang on your wall when you're done. You will, however, have an understanding of business that's comparable to completing a traditional business school curriculum, along with the pleasures of not having to mortgage your life for that understanding. You do not need a certificate to be able to understand, use, and hold an intelligent conversation about advanced business topics. (Employers do, however, respond well to portfolios. If you build a portfolio of notes to capture what you learn through the Personal MBA, you'll have a tangible asset to prove your hard work and dedication during the interview process.)
A stand-alone venture. You can't learn about business solely from books (or sitting in a classroom); you have to be willing to go out and learn by doing. Whether you're working full-time for a company or building your own business, a great deal of your knowledge will develop as a direct result of your day-to-day work experiences, which provide the necessary context for understanding what you read. Reading books is not enough; application of what you read is essential.
- books
- business
- free
TitleZ * RankForest
Amazon sales ranks have become a surrogate for measuring actual sales online. When Amazon says a book ranks 2,000 it means it is the 2,000 besting selling book that hour; it doesn't tell you how many were sold. In fact often a few copies sold can move a book's rank, depending on time of day, week, or the rest of the world of books. (Use this chart to make a rough correlation between rank and copies sold if you really need to know.) Nonetheless, because these ranks are public (unlike bookstore sales) and easy to grab, they have become a great way for anyone to monitor how a book is selling. In the past it might take 6 months before sales of books were reported. Now authors and publishers with new books will check hourly to see if their rankings have been improved by a radio interview, or book review.
But you don't need to be the author or publisher to have an interest in how a book is selling. Trendspotters long ago discovered that books are good canaries of ideas, and that monitoring clusters of books gives you a zeitgeist reading, very similar to Google's Hot Trends, which monitors search terms over time. Also keep in mind you can track other things on Amazon besides books: CDs, games, software. You just need Amazon's ID for each item.
While you can just check the Amazon page to see what a product's ranking is, what you really want is something that constantly tracks an item and compiles the data into graphs, charts, and spreadsheets. There are several websites that do this. I previously recommended JungleScan, the original Amazon tracker, for a free way to track Amazon rankings. The site was abandoned last year (although its owner says he will revive up "someday.")
TitleZ
TitleZ is a new free site (for now), It's been in beta for years. You can track many books for free, and get some handsome graphs of their ranking. The good thing is that TitleZ will instantly give you the back history of a book's ranking back to 2004. The downside of TitleZ is that you can't export the data, or do much else.
A TitleZ track of my 1994 book, above. Below is a comparison chart of my two books in print.
RankForest
RankForest has many more features, and friendlier interface. Unfortunately, you can track only one book for free. And you don't get historical info; you have to register a book to track it. For more books, and more features you need to pay a monthly subscription, beginning at $3/month and up. Other goodies in the paid version include the option to add other online bookstore rankings, like Barnes and Noble, complex graphing options such as racing two books, alerts, and so on.
There are other trackers out there, some catering to publishers, but these two are the best for non-publisher types.
- books
- business
- free
- self-publishing
- self-tracking
- services
Micro-Loans Online
This year the father of micro-finance and founder of the Grameen Bank won a Nobel Peace Prize for his work in inventing and promoting micro-loans in the developing world. A micro-loan is as little as a few hundred dollars invested into a one-person business with minimal qualifications. That tiny borrowed amount can launch a vegetable stand, repair shop, or bicycle taxi -- a living in other words. As each micro-loan is repaid (and most are), the effects of that small goodness are amplified and leveraged by being loaned out and invested again and again. Micro-loans are the world's only perpetual motion machines.
Previously I've recommended the micro-finance cool tools of Trickle Up, Opportunity International, and my favorite, Heifer International, as three ways to leverage small amounts of money for maximum global good. (Micro-finance programs are not a panacea. For a critique start with this article in Forbes.)
The news now is that it is there are many other outfits that offer individuals (like us) ways to leverage as little as fifty dollars via micro-finance programs online. Unleashing compounding good is only a few clicks away. Make a loan, or outright grant, using your credit card, or even PayPal.
Grameen Foundation
Inspried by the original Grameen Bank in Bangladesh. Minimum contribution, $100. One of their projects is Village Phone -- cell phones that women buy on loans and then can rent to others for income. "The Village Phone program in Uganda, the first of GF's efforts to replicate the pay phone program outside Bangladesh, continued exceeding expectations in 2005. More than 3,500 microfinance clients have bought and now operate a Village Phone as "Village Phone operators." Besides the boost to operators' incomes, the program is creating a national telecommunications network. Of Uganda's 56 districts, 53 now have at least one Village Phone operator. Often, Village Phone is the first local telephone that villagers have. Having a quick means to communicate has contributed to higher levels of productivity, savings, and safety for entire communities."
http://www.grameenfoundation.org/get_involved/
Namaste Direct
This is one of the most direct person-to-person micro-lending programs. When you give to Namaste Direct, you are informed of the person who receives your loan, how they used the money, and their progress. ND can also arrange a visit to the lendee -- this will turn your loan into a life-changing experience for you as well. But because of this directness the giving area is limited -- currently to Mexico and Guatemala. No minimum contribution.
http://namaste-direct.org/
FINCA Village Banking
FINCA makes loans directly to the poorest villages. They aim their lending to 10-50 neighbors who come together to form a village banking group, and who in turn decide who should get what and how much. FINCA specializes in small loan amounts ($25-$500) for the very poorest. The minimum contribution to their program is $25. While a few hundred dollars is powerful, with only $5,000 you can start a whole village bank for micro-loans, thereby compounding the power of micro-finance to an entire small community.
http://www.villagebanking.org/donate-vbsponsor.htm
Unitus
Minimum contribution, $100. Since they accept PayPal, I found this program really easy to contribute to. (Get with it, others!) Unitus, like Accion below, funds other local micro-finance programs, rather than direct loans to individuals. "Unitus seeks to identify highest-potential emerging MFIs (Micro-Finance Institutions) and help them to achieve exponential growth."
http://www.unitus.com
Accion
Accion is an umbrella institution providing technical assistant to local micro-lending institutions. Minimum contribution, $35."ACCION is leading the effort to make micro-lending financially self-sustaining. Micro-lending programs have the potential to cover their own costs. The interest each borrower pays helps to finance the cost of lending to another. In most poverty alleviation efforts, every person helped brings the program closer to its financial limits. Successful micro-lending programs, on the other hand, generate more resources with each individual they help. As a result, well-managed micro-lending programs generate more income than they spend. Once they become economically viable financial institutions, they have the ability to access a virtually unlimited source of lending capital - the billions of dollars invested in the world's financial markets. Several of ACCION's partners have already made the transition from nonprofit, charity-dependent organizations to banks or other regulated financial institutions."
https://www.accion.org
My suspicion is that over time the inherent self-sustaining qualities of micro-lending will mean it won't need charitable support to keep expanding. But the idea is still in its infancy; billions of people are still out of its reach. That means that every dollar given today will not only cascade its blessings on many others, but funding micro-lending now will also greatly accelerate the time when anyone in the world will have access to a small loan.
God bless us all, everyone.
- charities
- finances
- services
- sharing
Modest Needs
Has someone ever helped you get you out of a hard place with an act of kindness? If so, you should consider passing that gift onto someone else. You can dispense a few $10 bills from your ATM to the homeless in your area; or you can employ this amazing website which does something similar with greater effectiveness.
Modest Needs, a minuscule non-profit, grants modest (under $200) one-time cash gifts to those who require just a little help to get them through a tough time. A need, if honored, is granted within 72 hours, with no strings attached. Modest Needs does this with commendable efficiency via the web (it's not hard to be broke and still get online), heart-warming sympathy (every request is read by a volunteer), and impressive reach (220 requests granted this year, or 7% of the million dollars sought for). Modest Needs' entire finances are completely transparent on their website. Since their inception they have spent $0 on fundraising and $0 on advertising. They are astoundingly thrifty (total annual cost to run this charitable operation: $24,000). The rest of the small change they collect goes to those to whom small change can make a big difference. They accept contributions from folks like you. It runs fast all year, not just at Christmas.
The founder Keith Taylor began Modest Needs by giving 10% of his $350 a month earnings as a way to return a no-strings kindness paid to him when he most needed it. He told me, "Those who need help can always ask for it at Modest Needs, absolutely for free. How much money we raise matters less - to me, anyway - than simply providing a vehicle for human kindness."
It's quite brilliant. Release a few bucks from your PayPal account. Return a random kindness. Maximize a small gift.
- charities
- finances
- services
- sharing
High Tech Start Up
You have a brilliant idea. But for a high tech company to make that idea real is an incredibly complex machine to launch. What you really want is someone who has done this before, someone who can tell you how the bankers really make their money, what dilution means, how to quit your current job ethically, and what you should expect at each stage of "capital development." What you need is John Nesheim, the guru of high tech startups. He's been involved with Silicon Valley entrepreneurs for decades and has seen everything. Despite being an engineer, he correctly places great emphasis on the emotional costs (to you) at every stage. This book is the best; it doesn't hide the nasty side, and it is explicit in an engineer's way about what you have to do. It's worth its weight in stocks.
The entrepreneur must realize that the process of raising venture capital never ends. From the first to the last of the fourteen stages of the venture capital formation process.. the CEO is continuously occupied with problems of how to raise the needed capital. Experienced start-up staff members of both successful and unsuccessful companies said the same thing: "You never have enough money, things always take twice as long to do as you think, and there is never enough time to stop raising capital while you focus on running the company."
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Founder CEOs seldom last as employees for more than three years. This is universally lamented by all parties, including the VCs. We will discuss the reasons and cures later in this book. Silicon Valley psychologists report that few founders make it to the IPO without personal emotional trauma.
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Get in touch with yourself. That was repeated by many of the people we spoke with. Decide what motivates you: joy of work, love of wealth, the satisfaction of getting further than anyone expected, and so on. And decide what failure means to you, as a person, as a company leader.
- books
- business
- finances
The Case Against Patents
I'm convinced by Don Lancaster's (and others') arguments that patents makes no sense for a small-time inventor or technical genius. Patents guarantee you nothing but the right to fight for your idea. Fighting takes a full apparatus, lots of time, negotiating assets, lawyer fees, and emotional surplus. The same results from fighting (ineffectually 99% of the time) can be had by moving fast and staying nimble. Patents are a corporate game and should be avoided by anyone trying to work outside of that framework. Here's a lot of encouragement and support from a master non-patent inventor.
- business
- laws
- sharing
The Future of Ideas
This is the book most often recommended to me in the past year. It is very important because Lessig articulates the central reason the web has succeeded - its root as a commons - and proceeds to dissect the problems threatening this commons, and suggests remedies and laws that would protect and nourish it. It is brilliant work, long overdue.
As I will argue, in the digital world, all the stuff protected by copyright law is in one sense the same: It all depends fundamentally upon a rich and diverse public domain. Free content, in other words, is crucial to building and supporting new content. The free content among the "wired" is just a particular example of a more general point.
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This is a hard fact for lawyers to understand (protected as they are by exclusionary rules such as the bar exam), but most of production in our society occurs without any guarantee of government protection. Starbucks didn't get a government monopoly before it risked a great deal of capital to open coffee shops around the world. All it was assured was that people would have to pay for the coffee they sold; the idea of a high-quality coffee shop was free for others to take. Similarly, chip fabricators around the world invest billions in chip production plants, with no assurance from the government that another competitor won't open a competing plant right next door.
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Commons may be rare. They may evoke tragedies. They may be hard to sustain. And at times, they certainly may interfere with the efficient use of important resources.
But commons also produce something of value. They are a resource for decentralized innovation. They create the opportunity for individuals to draw upon resources without connections, permission, or access granted by others. They are environments that commit themselves to being open. Individuals and corporations draw upon the value created by this openness. They transform that value into other value, which they then consume privately.
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Contrast this with computer networks. The most striking feature of the early history of the Internet is the repeated assertion by those at its founding that they simply didn't know what the network would be used for. Here they were building this large-scale computer network, with a large number of resources devoted to it, but none of them had a clear idea of the uses to which this network would be put. Many in the 1980s believed the Internet would be a fair substitute for telephones (they of course were wrong); none had any idea of the potential for many-to-many publishing that the World Wide Web would produce.
Where we have little understanding about how a resource will be used, we have more reason to keep that resource in the commons.
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To the extent you view Napster as nothing more than a device for facilitating the theft of content, there is little usefulness in the new mode of distribution. But the extraordinary feature of Napster was not so much the ability to steal content as it is the range of content that Napster makes available. The important fact is not that a user can get Madonna's latest songs for free; it is that one can find a recording of new Orleans jazz drummer Jason Marsalis's band playing "There's a Thing Called Rhythm."
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But in light of the emerging technologies for sharing, even the spectrum sold as property would be subject to an important qualification: Other users would be free to "share" that spectrum if they followed a "listen first" protocol - the technology would listen to see whether a certain chunk of the spectrum were being used at a particular time, and if it weren't, it would be free for the taking.
I recognize that idea is jarring - that "my property" would be free for the taking just because I was not using it. But do you recognize why the idea is jarring? The assumption that fuels the dissonance about property "free for the taking" is that the taken property is exhaustible. I may not be using my car at the moment, but that doesn't mean you should have the right to take it since your use of my care will, to some degree, deplete the property I have. Cars are exhaustible resources. Spectrum is not. When I use a bit of spectrum at a particular moment in time, that spectrum is just as good after I'm finished as it was before. My use in no way exhausts the resource. And more important, when spectrum is not used, its value as a resource is not saved. Unused spectrum, like an empty seat on an airplane, is a resource that is lost forever.
And pollution is precisely the way we should think about old uses of spectrum: large and stupid towers billow overly powerful broadcasts into the ether, making it impossible for smaller, quieter, more efficient uses of spectrum to flourish. Why should these smokestack technologies get protection, when the steel mills did not? Why not force them to improve their technology - to reduce the pollution they spew forth into the ether - so that others could innovate in yet unimagined ways?
- books
- business
- laws
- sharing
Powering Virtuous Circles
There's no shortage of opportunities to support important causes. Lots of charities are local and community based. Some are more internationally and future-oriented such as Amnesty International, EFF, Long Now Foundation, World Vision, the ACLU, and Oxfam to name just a few. Everyone can add their favorite.
But let's say you were interested in a "tool" to leverage the least amount of money into the largest measurable effect over time. For that I'd like to recommend a type of giving that multiplies itself. Over the years, these are the criteria I've adopted for this challenge:
1) The help is aimed at the lowest, those with the least, where small makes a huge difference.
2) The gift expands itself, gaining amplitude with each cycle.
3) The range is global.
Think of it as enabling philanthropy: take a minimum of money and aim it at the precise point where it can do the maximum good, multiplied by many generations. Maximum good is measured simply: when you enable someone to enable someone else. That is a virtuous circle.
I've found the following three do-good organizations to meet these criteria: Heifer International, Opportunity International, Trickle Up. They fund the neediest in the world. They are highly-evolved programs that produce amazing results. And one tangential result is that when we give to these three, we feel optimistic.
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Heifer International
For fifty years the Heifer Project has been providing families in developing countries (and parts of the US) with breeding pairs of animals: cows, goats, pigs, rabbits, water buffalo, ducks, and so on. Even in the world's poorest regions the cost of a cow or goat can exceed a year's income, preventing many families from acquiring animals. When a family receives a breeding pair they get meat, milk or eggs, but more importantly, they now have a source of income as the offspring are sold.
The deal with Heifer Project is that the recipient must agree to give one breeding pair of offspring away to another family, thus paying the gift forward. Therefore a small amount of money contributed now will multiply manyfold as families gain food, pride, a source of income, and the means to help someone else. It's hard to imagine a better gift, or a more practical, proven lever in making a difference in communities of need.
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Opportunity International
Micro-financing is quite the rage in international circles for one very amazing fact. The payback rate on tiny loans to the workers in developing countries is greater than the payback rate for large loans to their home countries. In other words, from an outright profit perspective, you are better off loaning money to a Bolivian peasant than to the Bolivian government. Furthermore, there is now no doubt that Bolivia itself, and any other country, is much better off if investment goes directly to their poorest citizens than to the government. Several non-profits, starting with the Grameen Bank in Bangladesh, have pioneered micro-credit loans on a large scale and for large investors. I've found the easiest way for a helpful citizen to contribute funds to a wide variety of micro-loan programs in different parts of the world is through Opportunity International. Opportunity International has been providing micro loans for 30 years, even before the term microcredit was coined. They work through Trust Banks, groups of 20-30 (mostly women) borrowers who meet weekly for encouragement and to cross-guarantee the loans.
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Trickle Up
Rather than dispense loans, Trickle Up issues outright grants, but with strings attached. They provide seed capital and training for micro-enterprise hopefuls. Maybe someone with ambitions for a food stall, or a repair shop. A typical deal is a $100 conditional grant. Unlike in a micro-loan program, grantees don't have to pay the money back, but they do have to get trained. Grantees must commit a minimum of 250 hours in the first 3 months to their venture, reinvest at least 20% back into it, and keep an account ledger, among other conditions. Last year 10,000 business started via Trickle Up donations, and 30,000 budding entreprenuers benefited from this global program. There is huge emphasis on training for very basic business skills. And follow up expansion grants are offered, too. About 70% of grantees are women.
[Sampa rebuilt her life after rebel attacks by starting a restaurant ]
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Die Broke
God punishes one generation when it accepts the undiminished wealth of the previous generation. The way to escape perpetuating generational richity is to die broke. But what about college for my kids, or when I'm sick, old, or retired? This book has answers for you and very specific tactics for the liberation of all from the myth of inheritance.
You are not a corporation - you are a human being. Your money shouldn't outlive you. You should exit life as you came into it: penniless. Your assets are resources to be used, for your own benefit and for the benefit of those you love. Every dollar that's left in your bank account after you die is a dollar you wasted. Use your resources to help people now when you know they need it, when it will do the most good, rather than hoping they'll be helped when you're dead. The last check you write should be to your undertaker -- and it should bounce.
*
Inheritance is a terribly inefficient way to pass wealth to others.
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You need to shift to a more flexible view of work and career, one that abandons the ultimatum of retirement - a false choice between full-time and no time. Similarly you need to shift to a less rigid approach to earned income. No longer can you look at your earned income as continually increasing up until age sixty-five, at which pint it will stop entirely. From now on you need to approach earned income as you do unearned income. It may grow, it may be stagnant, or it may decrease, all depending on market conditions and your own choices.
*
The best metaphor I can think of for today's pursuit of retirement is of a mass of lemmings busily struggling up a steep cliff and then jumping off the cliff into the abyss.
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Dying broke means living well.
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Fidelity Charitable Gift Fund
The only sane antidote to massive wealth is massive philanthropy. But giving is a habit that is best begun before you are loaded; the great philanthropist Carneige began when he was making a few dollars per week. Indeed, some of the most influential funding in history has been small, but creative, grants.
You can write a check any time the spirit moves you, but like all things in life, they are tools that can improve your aim. One tool of philanthropy is a personal foundation. A foundation gives you flexibility and can increase the amount you can give. However you can spend half your fortune -- no matter its size -- creating and maintaining a foundation, or you can do it the easy way, a way that is suitable to middle class assets.
The Fidelity Charitable Gift Fund provides most of the functions you, a non-tycoon, might want from a personal foundation. Best of all, it requires a minimum of "only" $5,000.
Here's how it works:
You deposit your contribution in Fidelity Charitable Gift Fund which in turn invests the amount in one of their mutual fund pools. You get to choose the level of risk/payback you want for your money, but Fidelity chooses and runs the fund. Whenever you want to make a donation, you tell Fidelity, and as long as it is a tax-deductible outfit (it can't be an individual), they send 'em a check. You can do this online with a very graceful and easy interface; it even remembers all the details of your frequent grantees, so you just need to click.
The main advantages are four:
1) The money grows. Like a real foundation, your money is invested, and the returns on those investments are reinvested and further enlarge your fund for giving. Depending on what percentage you disperse each year, the total can accumulate significantly. (Fidelity suggests you give at least 5% of your fund each year.)
2) You can gift stock (or securities) directly to the fund. When highly appreciated stock (as in a boom), is cashed out it triggers huge capital gains tax for the owners. With a personal foundation you can donate the stock without cashing it. The Fidelity Gift Fund account is credited with the high value of the stock at market value, but the giver (you) doesn't have to pay for the huge gains, because those gains are now the gains of a non-profit fund. You receive the normal charitable giving tax deduction for the market value of the stock. You can do the same with ordinary stock investments. Say you were lucky enough to buy 20 shares of Amazon when it was at $20 per share. Say when Amazon hit $200 per share, you decided you wanted to do something creative and meaningful with your small fortune of $4,000. You bestow the Gift Fund with the 20 shares of Amazon, which then credits your philanthropic account with $4,000. But instead of having to pay a capital gains tax on $3,600 ($4,000 minus $400, your cost), you get a tax deduction on $4,000. That $4,000 can then amplify further (see point 1). A common tactic for Gift Fund users is to donate their highest flying, most inflated stocks for maximum philanthropic joy and smallest capital gains pain.
3) It's free. Well, almost free. Fidelity charges the usual industry standard of any mutual fund (less than 1%), but this is far less than hiring a personal fund manager, or even setting up a private foundation yourself.
4) You get to name your foundation anything you want. Having a foundation of your own focuses attention on keeping it full, and encourages discipline in giving it away.
Because accounts within the Gift Fund are so easy to set up they are often used for giving circles. A giving circle is a group of friends or advocates who decide to combine their resources to fund a cause. They create a virtual foundation without the usual expense and work of setting up a bona-fide non-profit (which is needed to receive funds, but not give them) and collectively research and debate who/where/how to fund their mission.
The Gift Fund is so useful for givers of more modest means that is has drawn in about $2.5 billion dollars, making the collective Fidelity Charitable Gift Fund the third largest public foundation in the US, and the number one foundation in total amount of money dispensed last year. Of course it is not really one foundation, but 27,000 small foundations, many of them pioneering creative philanthropy. You don't have to fund the opera and hospitals. As an example, here are some donations clients of the Gift Fund recently made:
* Support for a historic preservation speaking tour
* Rebuilding a scout camp destroyed by fire
* Support for an archeological dig in a national park
* Support for Native American students majoring in science
* Supplying an animal shelter with an examination table and equipment
* Support for a summer theater
My experience with the Gift Fund has been great. It was simple to set up, with a minimum of paperwork, and when it comes time to make a donation, the effort is pretty painless. Having a convenient do-it-yourself vehicle, with tax breaks, and investment upside, has encouraged our giving.
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