Why Not Teach People How To Become Wealthy?

February 13, 2011 6 Comments

This post is in reply to this post http://goodnewsforisla.wordpress.com/2010/12/11/day-58-billions/ and other articles in a similar vein.

To quote from the above post:

Here are a few facts about billionaires and the wealthy (taken from ‘The Hole In Our Gospel ‘by Richard Stearns).
1) Today’s 1,123 billionaires hold more wealth than the wealth of half the world’s adult population.

2) The wealthiest 7 people on earth control more wealth than the combined GDP (Gross Domestic Product) of the 41 most heavily indebted (poor) nations.
3) The poorest 40 percent of the world’s population accounts for just 5 percent of the global income. The richest 20 percent accounts for three-quarters of the world’s income.

These facts are staggering when you consider the disparity between the wealthy and the poor. If only those that were extremely wealthy would share their wealth, perhaps the poor wouldn’t be as poor. The sick could be cured. Thirst could be quenched, and hungry tummies fed.

Please consider the following points:

(1) Billionaires hold about one percent of the world’s house hold wealth( source:http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=108&subsecID=900003&contentID=254950).So what would happen if all the world’s rich gave away their wealth?Something like this…..The world’s richest man Carlos Slim Helu has a estimated networth of less than US$60billion.There are some six billion souls on earth.So if we were to distribute his money amongst all the people of the world,each person would get an additional US$10.And if instead of all the people if we were to give the money to only the poorer 50% ,each person would get US$20.Still money but not that much….. Read more of this post

Filed under Philanthropy Tagged with asset creation, Billionaires, book, How to Become Wealthy, income disparity, indebted, Philanthrophy, poor, Richard Stearns, Teach People How To Become Wealthy, The Hole In Our Gospel, wealthiest, World Vision

A German Perspective on Philanthropy

February 5, 2011 2 Comments

I came across this article by chance while looking for information on Chinese billionaires.It is from Der Spiegel.I was struck by the point made by Peter Kramer.Thought I’d put up the article here.What do you think about this point of view?Do write me your comments.I would love to hear them.

08/10/2010

Negative Reaction to Charity Campaign

German Millionaires Criticize Gates’ ‘Giving Pledge’

Germany’s super-rich have rejected an invitation by Bill Gates and Warren Buffett to join their ‘Giving Pledge’ to give away most of their fortune. The pledge has been criticized in Germany, with millionaires saying donations shouldn’t replace duties that would be better carried out by the state.

Last week, Microsoft founder Bill Gates attempted to convince billionaires around the world to agree to give away half their money to charity. But in Germany, the “Giving Pledge,” backed by 40 of the world’s wealthiest people, including Gates and Warren Buffet, has met with skepticism, SPIEGEL has learned.

“For most people that is too ostentatious,” said the asset manager of one of the billionaires contacted by Gates, adding that many of the of the people contacted had already transferred larger proportions of their assets than the Americans to charitable foundations.

Dietmar Hopp, the co-founder of the SAP business software company, has transferred some €2.9 billion to a foundation. Klaus Tschira, another founder of SAP, has handed more than half his wealth to a foundation.

Peter Krämer, a Hamburg-based shipping magnate and multimillionaire, has emerged as one of the strongest critics of the “Giving Pledge.” Krämer, who donated millions of euros in 2005 to “Schools for Africa,” a program operated by UNICEF, explained his opposition to the Gates initiative in a SPIEGEL interview.

SPIEGEL: Forty super wealthy Americans have just announced that they would donate half of their assets, at the very latest after their deaths. As a person who often likes to say that rich people should be asked to contribute more to society, what were your first thoughts? Read more of this post

Filed under Philanthropy Tagged with Bill Gates, German Philanthropy, Peter Kramer, Schools For Africa, The Giving Pledge, Warren Buffett

Melinda Gates

February 4, 2011 3 Comments

I have never really been much of a fan of the Gateses.I have heard of their philanthrophy and it’s done on a truly gargantuan scale.The beneficiaries are in poor countries.The causes are important to countries like India.Obviously urgent problems are getting addressed.Normally this should get me interested.However I have never been able to find a connection with the Gates.I normally avoid reading or watching them in the news.It’s not so much any particular thing they say that is a turnoff as I can’t really relate to where they are coming from.

But while hunting around for the story of how Bill and Melinda met each other , today, I stumbled on an article from Fortune Magazine focussed on Melinda.It filled me in on the details of Melinda’s background and helped me get where she might be coming from.Thought I’d put it up here.

BTW I just figured that the real turn-off comes from her view of the world as a place of finite wealth which needs to be allocated in the best possible manner.I guess I believe that assets are infinite in nature.It just needs imagination and human ingenuity to literally create assets.So sand or silica has been known for just about forever, it’s just when we learnt to use it to make ever smarter computer chips that we humans started creating assets out of materials nobody considered as useful before.Not everyone is born with a silver spoon in their mouths but there is not that much variation in the mental faculties of humans.In fact necessity is the mother of creation and people who grow up facing more constraints are naturally more adept at being creative and seizing opportunity.So I believe it better to get all people to see wealth with their mind’s eye rather than battle to distribute existing wealth.Existing wealth is really puny if you think about it….The richest person in the world has not above US$60 .And there are 6 billion people in the world.So just redistributing the US$60 billion amongst all the people of the world will give each person only US$10……guess that’s not all that much.Don’t you think it’s better to learn how to be wealthy?

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Years before Melinda French met and married Bill Gates, she had a love affair – with an Apple computer. She was growing up in Dallas in a hard-working middle-class family. Ray French, Melinda’s dad, stretched their budget to pay for all four children to go to college. An engineer, he started a family business on the side, operating rental properties. “That meant scrubbing floors and cleaning ovens and mowing the lawns,” Melinda recalls. The whole family pitched in every weekend. When Ray brought home an Apple III computer one day when she was 16, she was captivated. “We would help him run the business and keep the books,” she says. “We saw money coming in and money going out.” Read more of this post

Filed under Philanthropy Tagged with Bill and Melinda Gates Foundation, Bill Gates, Bill Gates Melinda Gates, Melinda Gates, Warren Buffett

Benjamin Franklin’s Will

January 25, 2011 6 Comments

While checking up the facts of the story at http://www.crackerjackgreenback.com/the-basics/compound-interest-a-lesson-from-benjamin-franklin/ , before posting https://wealthymatters.com/2011/01/25/benjamin-franklins-gift/ , I came a cross the text of of Benjamin Franklin’s will at http://fi.edu/franklin/family/lastwill.html .I have highlighted the parts I found interesting and added a few observations.I plan on using this will to help me draft my own.I hope you find this will as interesting to read as I did.

The Last Will and Testament of Benjamin Franklin

I, Benjamin Franklin, of Philadelphia, printer, late Minister Plenipotentiary from the United States of America to the Court of France, now President of the State of Pennsylvania, do make and declare my last will and testament as follows:

To my son, William Franklin, late Governor of the Jerseys, I give and devise all the lands I hold or have a right to, in the province of Nova Scotia, to hold to him, his heirs, and assigns forever. I also give to him all my books and papers, which he has in his possession, and all debts standing against him on my account books, willing that no payment for, nor restitution of, the same be required of him, by my executors. The part he acted against me in the late war, which is of public notoriety, will account for my leaving him no more of an estate he endeavoured to deprive me of.

Having since my return from France demolished the three houses in Market Street, between Third and Fourth Streets, fronting my dwelling-house, and erected two new and larger ones on the ground, and having also erected another house on the lot which formerly was the passage to my dwelling, and also a printing-office between my dwelling and the front houses; now I do give and devise my said dwelling-house, wherein I now live, my said three new houses, my printing- office and the lots of ground thereto belonging; also my small lot and house in Sixth Street, which I bought of the widow Henmarsh; also my pasture-ground which I have in Hickory Lane, with the buildings thereon; also my house and lot on the North side of Market Street, now occupied by Mary Jacobs, together with two houses and lots behind the same, and fronting on Pewter-Platter Alley; also my lot of ground in Arch Street, opposite the church-burying ground, with the buildings thereon erected; also all my silver plate, pictures, and household goods, of every kind, now in my said dwelling-place, to my daughter, Sarah Bache, and to her husband, Richard Bache, to hold to them for and during their natural lives, and the life of the longest liver of them, and from and after the decease of the survivor of them, I do give, devise, and bequeath to all children already born, or to be born of my said daughter, and to their heirs and assigns forever, as tenants in common, and not as joint tenants. Read more of this post

Filed under Philanthropy, Tool Kit Tagged with Abraham Shoemaker, Benjamin Franklin, Boston, Edward Duffield of Benfield, Francis Bailey, Francis Hopkinson, General Washington, George Moore, Henry Hill, John Jay, John Jones, Madame de Forbach of Deux-Ponts, Mary Hewson, Massachusetts, Pennsylvania, Philadelphia, Philanthropy, Richard Bache, Sarah Bache, Thomas Lang, Will

Benjamin Franklin’s Gift

January 25, 2011 3 Comments

Yesterday while searching for a graph to illustrate how important time is to compound interest,I came across a wonderful post at http://www.crackerjackgreenback.com/the-basics/compound-interest-a-lesson-from-benjamin-franklin/ .Here it is in full below.

In 1785, French mathematician Charles-Joseph Mathon de la Cour wrote a parody of Benjamin Franklin’s ‘Poor Richard’s Almanack’. The Frenchman called his parody ‘Fortunate Richard ‘and, attempting to mock the American optimism so well-represented by Franklin, wrote that Fortunate Richard left a small sum of money in his will to be used only after it had collected interest for 500 years.

Mr. Franklin thought the idea was fantastic and wrote back to Monsieur de la Cour thanking him. Franklin decided to leave a bequest of £1,000 (about $4,550 at the time of his death) each to his native hometown of Boston and adopted hometown of Philadelphia on the condition that it gather interest for 200 years. Franklin believed 200 years was the maximum length of time any person should be able to control assets from beyond the grave.

The Strings

In 1789, Benjamin Franklin added a codicil, or supplemental provision, to his will providing about $4,550 each (about $108,000 in 2008 dollars) to Boston and Philadelphia. Mr. Franklin stipulated that the funds should be used to make loans at 5% interest to young craftsmen under the age of 25 to help them set up their businesses. The loans were to be given only to those craftsmen who were married, had completed their apprenticeships, and could obtain two co-signers to vouch for them.

After 100 years, each city was to take 75% of the fund to use for public works (like bridges, pavement, public buildings, and the like). They were to then continue loaning the money for another 100 years. At the end of that 100 years, each city would get about 25% of the money and their respective states would get the rest. Had Boston and Philly followed through with Franklin’s wishes successfully, they would each have had nearly $20,000,000 in their funds at the end of the 200 years. Read more of this post