Wednesday, July 11, 2012

Act Like A Billionaire - Give to Charity

File:Giving in the US 2009.pngIt might seem like an oxymoron for me to suggest it given the nature of this blog, but giving to charity is a necessity that everyone (no matter the income) should perform. In my "Act Like A Billionaire" series, I'm hoping to demonstrate the strategies and knowledge that billionaires act upon every day. Making money is as much a state of mind as it is anything else, and with my suggestions, you too can be on your way.

Why give to charity?
The first and most obvious question is "why should I give to charity"? If my goal is to retire early and live off my dividends, then why should I waste my money on throwing it away to some other organization. As mentioned in previous articles, think of everything you do as a form of practice. By taking the time to find the right organization (whether it be a religious institution or some other kind of non-for-profit), you are becoming more invested in your own community. When you are more invested, you tend to value your neighbors and neighborhood which could lead you to develop deeper relationships with those around you. These relationships may even help you down the road.

Even more deeper than just developing relationships, giving to charity allows you to be in control of your money so that it does not control you. By handing over your hard-earned cash, you are essentially saying "I don't need all this, and there are other people who need it more". It's this psychological exercise which will allow you to be more happy with what you have and understand that money is not everything.

Who should I give to?
This is probably the trickiest part of charity in that there are many organizations that could use your help, and only a limited supply of your money. First ask yourself what is important to you on a philosophical level. Do you care about starving people in other countries, or do you instead want to help out a local food pantry? Whatever you decide, know that you need to be passionate about the cause in order for you to truly give.

How much should I give?
I personally tend to give based on the old tithing philosophy of 10% of your gross income. This amount is very easy to calculate and you know exactly how much you have to give up each time frame. This, however, may not be the right amount for you. 10% might be way too much at this point in your life. Even if you give 1%, you are still practicing a billionaire attitude. When people like Oprah give, they do it in recognition of their power and influence, but they also donate to one cause. If you spend all your "giving fund" on one charity, you are far more likely to make an impact than putting $25 bucks in a bunch of charities. You may even be able to get more involved in the organization once they start seeing you as a reliable donor.

Other Benefits:
Finally, there are a few other benefits with giving, most notably the tax benefits you get from reducing your overall taxed income. One resource I found to provide some good advise along the tax breaks and other advantages is this article. Whatever you decide, make it part of your routine to donate at least once a month. In the long run, you may have even totally enriched someones life.

Wonderful Moment of the Day: Coming home to a perfect 72 degree day and eating my dinner in my back yard.

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