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January 14, 2010


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I'm waiting to read Old Limey's response. ;-)

When I foster a dog (or two) or volunteer a bunch of time, I feel good. I'm also busier and have less time to spend money. I also crave less stuff. Maybe that is the connection.

I don't know, but whatever it is, I have never heard anyone complain that they volunteer too much. It makes my life better.

Crystal --

Old Limey may respond, but he and I have reached an understanding that we generally disagree on this topic and we'll go lightly on the other's feelings. ;-)

This is definitely an area where there needs to be a clear line drawn between someone who is rich (I might define this as wealthy) and someone with a very high income (many people would consider this person rich).

As a commercial banker, I come across many small business owners who are very wealthy. I also come across many small business owners who have created very little wealth but generate a solid income for themselves each year ($300k+).

Almost without fail, the folks who generate a high income but have little tangible wealth give almost nothing (think less than $500 per year). Most have hughe houses, lake houses, boats etc. that have them essentially living paycheck to paycheck.

The folks with true long term tangible wealth are always more generous.

but i think that you should be wise in your giving and not give without thinking of ways to meet your needs and having an investment portfolio that is well tended. i am conpletely for giving.....wisely

I, like Old Limey, disagree with this... Like FMF says 'The concept makes absolutely no sense mathematically' and that's how I think. Most engineers (at least the ones I know and talk to about finance) agree that it makes no "logical" sense. I've referred many to this site when posting about this topic and most write back saying that these people are most likely already rich and are trying to lower their tax bracket.

I dont necessarily agree with that statement either, but it does make more sense to the "engineer / mathematical" mind. Maybe FMF can give his explanation on how it's worked for him or anyone that he knows, cause I have not yet found anyone willing to explain the rational to me in terms I can believe or understand.

I try to make sure that people in my company are rewarded with a good career and profit sharing from the company. However it's company money and not my money. Nevertheless I have a lot of control on how much goes to employees and definitely reward my people. Does this count as helping others? I've always wondered about that as it seems pretty grey.


D --

What specifically would you like to know?

Mike --

I would say it would count. If you have the discretion to be generous or not be generous and you choose the former, why wouldn't it?

Of course, you could do this AND give personally. I don't think that the company generosity is a replacement for personal sacrifice.

About 9 years ago my wife and I committed to giving away at least 10% of our income. Since that time our total income has increased 3-fold. This isn't the greatest benefit though - we have such a sense of peace in being good stewards with our money. We honor God who has given us so much but we also help our fellow man.

If you don't give away your money (even when you are in debt), I believe you are missing something special and significant. Try it out... you may be suprised.

I have given money to my children at various times when it helped them to make an upwards move in their life but I do not give to people that I don't know or to institutions.

For me, having money is all about having security and the ability to absorb whatever blows life throws at you. As I have written before, we left England in 1956 and when we stepped off the boat in Montreal we had $400. At that time we had no friends or family to fall back on if something bad happened, consequently we saved every penny we could and lived very frugally. Our first bedside table was an orange crate with a cloth cover that my wife made, the only furniture we possessed was a mattress & box spring and a dinette set. Our first child was born two years later and with one income instead of two, that added even greater impetus to our determination to make a go of it.

Fifty four years later because of continued saving, always living within our means, steady employment, and successful investing we are quite wealthy but the steps required to get where we are today have left us still watching our money carefully. Our habits are far too ingrained to change. Over the years we have spent money to see much of the world and feel that it was money well spent. Travel is immensely educational, especially when you make a point to mix with the ordinary people and to get invited into their homes and to attend their religious ceremonies. On several visits to Nepal and Indonesia, before we left, we would collect all the used children's clothing, pencils, writing pads etc. that we possibly could and pack it into large duffle bags for the trip. When we got to a village we would go to the village square and start handing them out. I have wonderful pictures of my wife doing this surrounded by large groups of lovely, happy, smiling, kids, and sometimes even a few grandmothers. It's also gratifying to give small inexpensive toys to children who have only ever known an old tire and a piece of wood for a toy. These kids aren't spoiled rotten and don't grow up with all the toys and electronic gadgets etc. that American children have - I know that for a fact and unfortunately have a couple of grandsons that are prime examples - but that's another story I don't want to get started on.

My wife has a very giving heart and is very generous but she mainly gives things that she makes such as knitted products and home baked items.

During the last year we have read so many stories of couples that recently had high incomes, some upwards of $300K but as a result of a lavish lifestyle, far too much debt, far too much house, and poor decisions, are now without work, and in foreclosure and bankruptcy. One couple even gave out their PayPal account information and asked the public for donations. Can you believe it? I don't have one scrap of sympathy for such people.


Can you explain HOW giving increased your income? A direct correlation example would be preferred. For example if you say "we gave away 10% of our salary each year and because of that my salary increased 5x". Well did it increase because of annual job raises or promotions or did your giving have a direct relationship to your return?



@D - Giving is not about expecting a return. In fact you should expect a loss. Giving is not about self but others. Giving teaches you to *not* put yourself first. It's all about selflessness. We spend too much time worrying about me, me, me. Should'nt we focus some of this short life in helping others. After all you can't take it with you when you die.

D --

Sorry, I don't have a chart that shows giving versus income that then does a statistical analysis proving my giving increased my income. If I had that, there would be no room for discussion, right? It would be proven 100% with no room for dissent. ;-)

When you ask "Well did it increase because of annual job raises or promotions or did your giving have a direct relationship to your return?" that's not an easy question to answer, much less prove. In fact, many of the things that could lead to career growth/income increase are hard to prove -- and yet we accept them as good things to do.

For instance, why does anyone get a raise or promotion? Is it because they did a good job? Is it because they were lucky? Is it because they networked well? Is it because they were in the right place at the right time? Is it because they managed their career properly? Is it because they got extra education or training? Or what is it? And can it be proven beyond a shadow of a doubt which factor got them that raise or promotion? No, it can't. And yet most people think networking, managing your career, expanding your education, and so on are good ideas, right? Why is that -- if we can't prove it?

It's like this with me and giving and my experience mirrors closely what texashaze said. We were doing ok financially. Then we started giving and we did better. And we gave more and did even better. Was it a coincidence? Was it because I just hit the stride in my career? Was it because I did any (or all) of the things noted above that people do to try and increase their incomes? Or was it because God/the universe/karma/whatever you want to call it worked to benefit me because I gave? There's no one thing you can prove 100% with statistics or any other measurement that shows a direct correlation between it and my income increases. No, you can't prove giving led to my income increases. But you can't prove networking, education, luck, etc. did either, now can you?

I understand that you're a numbers person and prefer to see things "proven" to believe them. I'm much like that myself (giving much more weight to facts rather than experiences.) Maybe it's because I've lived it that I feel that there's a giving/income connection with no direct proof (just like there's no direct proof in my career that those other things made or did not make me). And I'm not the only one. David has lived it, the people he's counseled (which is probably a pretty big number) have seen it, texashaze has seen it, and so have many others (Dave Ramsey, Suze Orman, and on and on.) It's not just something I made up.

So in the end, I can't prove much (at least to the degree that you're requiring it. In fact, I'm not sure I can prove anything about any facet of personal finances to the degree you seem to be asking for it. ;-)) But I can suggest two steps if you're really interested in seeing if this works in your life:

1. Read the articles above that are linked at the end of the post. Maybe these will give you enough facts on the benefits of giving.

2. Start giving yourself. The worst that can happen is that you're out a bit of money and you help some needy people. The best that can happen is that you find a whole new way to prosper yourself and others at the same time. ;-)

Good luck!

I guess I'd like to see the "research" mentioned in the quote that proves that the more you give the more you live long and prosper etc. It sounds like anecdotal evidence than statistically valid research.

I like the idea of Karma and being generous and all, but I also know plenty of people who IMO *shouldn't* be giving money away but who still do, to the detriment of them and their family.

Unfortunately, it's always religious groups who seem to be getting the donations from those who can't afford it. They seem to deliverately put the touch on these people!

Grandmothers who give to the TV preacher out of their already inadequate pensions when they can't afford their medications already, poor working class folks with lots of kids who give money to their church while not saving anything for their retirements or kids' educations or even an emergency fund.

And of course there's the young people with tons of debt who still "donate" to PETA, NPR, Greenpeace, and political campaigns.

The only sensible thing to do IMO: if you have any significant debt (especially high interesrt) or huge unfunded future expenses (like kids' college), you can't afford to donate cash, any cash.

MC --

Read those links at the end of the post if you want to see research (at least on the happiness/giving relationship.) There's plenty there and the results aren't anecdotal.


You say "No, you can't prove giving led to my income increases. But you can't prove networking, education, luck, etc. did either, now can you?", however I easily can prove that these have led to my increases and advancements. I would have NEVER gotten my first job if it had not been for networking. I wouldn't be in the field that I am in (engineering) unless I was educated to do so and as for luck; I give you the following story.

I was at my first job, still wet behind the ears and learning a lot. I had become proficient in a now rarely used programming language. I was contacted by someone I previously worked with and had kept in touch (yet another example of networking) about a position his team had and thought I would be perfect for it. I interviewed and was offered the position. I was torn and wasn't sure so I told them I would need a week to think it over. During that week I was called down to HR and notified that our client was not renewing our contract with them and that they would have to let me go with 2 months severance pay. So not only did I get a new job, but for 2 months I was getting paid doubly what I was previously making; AND the company, which had just made me the offer, raised their offer to sweeten the pot while I was "thinking it over".

For me, like I've explained, I'm all about the tangibles. This might be narrow and short sighted, but unfortunately that's how my brain processes information. I can only understand something when I directly see its effects. (Yet another reason why I did poorly in religion in Catholic school)


From a numbers standpoint giving should be a budgetary line item. Do a budget and put giving on there. Do not exceed the number if it causes you to give more than you have. Compulsary giving is like compulsary spending - you shouldn't do it if you don't have the dough.

Anyway, if you just add it to your budget it becomes a habit and soon you don't realize it. It's actually quite easy.

D --

But can you prove it to me? You simply have personal experience that makes you think those things led to certain outcomes (career success in this case.) What facts/numbers/research can you show me? Isn't that what you're asking for from me? If not, then my personal experience with giving/income should be proof enough for you, right?

sure, what's your address... I'll send you my discharge letter from my first company, the offer letter from my second and the pay stubs during that time frame.

I'll also include, for good measure, my grades in Catholic school...

D --

That's still personal experience, isn't it?

Yes, but isn't that what we're talking about? I asked about your personal experiences that led to your belief ( at least thats what I meant )

D --

Ok, I misunderstood. I thought you wanted "hard proof." I guess the words "engineer", "direct correlation", and "direct relationship" threw me. Sorry.

Given that, my comments above (as well as those of texashaze, David Bach, etc.) should suffice.


I can see why old limey and you agree to disagree. I was looking for for stories containing your personal experiences.

You say:
"In fact, many of the things that could lead to career growth/income increase are hard to prove". I was looking to hear about the back "stories", similar to the ones I provided above.

D --

I said:

"It's like this with me and giving and my experience mirrors closely what texashaze said. We were doing ok financially. Then we started giving and we did better. And we gave more and did even better."

Does that not count as a story?

If someone wants me to believe that a guy who owns hundreds of chickens is more likely to give away eggs than a guy who owns five chickens, then that makes sense and I'll believe it.

If instead someone wants to tell me that people who give away lots of eggs tend to wind up having more and more chickens, then asserting that it's so just isn't enough. Tell me how the magic works.

I give away more now that I'm wealthier (and as I've become wealthier, I've given a larger and larger percentage) but I'm under no illusions that my giving resulted in more wealth. It's the wealth that's resulted in more giving.

Correlation is not causation.

I agree we should all give sensibly, and that it may make a person happier. But I don't agree that we should expect to get wealthy by doing so.

It is worth noting in this conversation that in our society the poorest 10% give the highest percentage of their income, with giving percentages dropping steadily until the richest of the rich (top 10%) increase their percentage of giving.

That would be concrete evidence that giving does not lead to wealth. Now, obviously the correlation/causation issues remain, so I don't think this ends the debate, but its worth keeping in mind.

Never knew something like this was so debatable. To each his own I guess.

@StL Pastor - I agree with you. I've just seen way too many cases of poor Christians who give and give, live Godly lives, strive to serve and seek God, and still are dirt-poor. I don't think God always blesses people in this life....sometimes the blessings come later.

I have also realized this thing that rich people (not all although) give more money in donations & trusts than anyone else in this world..they even donate their assets including property, restaurants, houses, etc. to poor people...I wonder why I haven't been contacted by Bill Gates till now??? I may be poor least by his high standards...:)

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