In this age of Nanny Stating, born again Christians, nutty Muslims and rabid Atheists, I had a recent realization about what is “charity”.
Firstly, I will define what charity is in the view of the above: Giving a good (including money) or service to someone that is deemed as “needy” by the person or group actually giving said good or service. In these groups’ view, you can be charitable by extension – so even if you aren’t giving the good or service directly to the recipient, because you caused a good or service to be given, you are still charitable. Because of this, people still get that little rush created from the goodwill towards men.
However, this is all wrong. Let me use an example:
You sell sandwiches and you have 10 to sell every day. You don’t like it, but you assume that at least 1 sandwich will be a 100% loss for some reason, and you’re ok with that. Now, during your day you come across a very hungry man that is desperately poor. You give him your 1 sandwich that you don’t mind losing and feel great for having been helpful. You have been charitable, right?
Well, no – you haven’t. To see why, we have to take the example to the extreme limits. Let’s continue with the example:
The next day, this man wins the lottery and is instantly a millionaire. Now, even though you knew you were going to lose the money for that 1 sandwich the other day, no matter how much you may want to deny it – you are tempted to be an indian giver (even if it’s for just a heartbeat). This is because you know he can afford it.
Let’s continue the example in the extreme: you have no problem with being an indian giver so you ask him to pay up for the sandwich. This means you were never being charitable at all. You were just willing to give the man a debt that you had very low expectations he would ever pay back.
Some might say, “I would never consider doing that!” Most people would never do violence on someone in the heat of the moment, but virtually everyone has considered it – and this is really no different. Whether you would act on it or not, you have projected a cost to him. You have put him in a subservient role, and this robs him of his dignity. You did this because there is a WAY outside chance that you could get full payment for that sandwich and deep down, you would rather strike a deal than just lose 100% of the cost of the sandwich.
Note that I never said that you wish ill on the poor man. You would rather he was not poor and that he could buy the sandwich from you. This general and natural good will towards your fellow human is what churches, governments and aid organizations use to beat you over the head to get donations out of you. They make you subservient to get your money, time, or knowledge – and then they go subjugate some welfare recipient, who doesn’t really want free stuff, but rather the ability to live like you do. We think ill of professional beggars because we know they are actively unwilling to engage in making a deal. They just want.
So what is real, true-blue, honest to God charity? Real Charity is the willingness on the part of the seller to make a deal with the buyer at a huge loss to enable the buyer. Take our example again – if instead of just putting the man in your debt, you instead struck a deal with him that sucks for you. Maybe he dances a jig or tells you a funny joke or draws a crappy picture for you in return for the sandwich. You still get the warm fuzzies because you have helped out an unfortunate man, and maybe you just learned a new joke, or you have a picture to show people, or you have a story about a man dancing a jig for a sandwich. Either way – you have each enriched the other in some fashion. The next day, when he wins the lottery, you do not have the urge to collect because you made a deal. He paid for his sandwich. Instead, you may have a feeling of “He can pay me for the next sandwich now.”
The poor man has all of his dignity still, because he doesn’t owe you anything. He made a deal with you, and the deal is done. You can not ask for money from him without him asking you for something else in return.
I’ve had a few people ask me what they should put their money into so that they don’t lose it. Now, I don’t have those answers, but I do have a list of the common themes I find when I go looking for them, and I’ve recently seen some stuff that gave me a good idea as well. Here goes.
Liquidity – how quickly can you convert said item into cash?
Appreciation – how much will it increase in “value” between today and next month?
Risk – how likely is it that this will utterly tank and end up costing money?
Money Markets, CDs, Bonds and other “liquid savings” instruments:
- Highly Liquid (90 days at minimum, 1.5 years max wait time)
- Low Yield – Appreciates more slowly than inflation, which means a net loss in real value
- All but bonds are not risky. Junk Bonds are risky, others are less risky
Conclusion: better than a savings account, but only slightly – with the exception that bonds could lose all your money. If you think the economy will improve only a little bit, this is a safe place to put your money.
Stocks and IRAs:
- Uncertain appreciation and yield
- Quite risky, but this can be hedged by using an Index Fund
Conclusion: could be good, but this is a long term investment. Don’t expect to see this money again for a long time. This is a good place to put your money if you think the economy has “rounded the corner”.
- They do not appreciate, but their prices are determined by inflation; thus, as inflation goes up, their prices go up and a profit can be made that is hopefully worth more than the amount the money you are being paid has dropped
- Somewhat risky. Crops are prone to flooding. Animals are prone to the FDA and CDC deciding they don’t like pigs, cows or chickens and shutting down those industries
Conclusion: these seem like good investments to look into, but it is likely that if our economy tanks too hardcore that Obama will fully nationalize these industries. Most of these already operate at a loss, and full nationalization would make them worse. In the meantime – if you are cool with spending the time it takes to be a speculator, then you can probably make money here.
Non-consumable Commodities like Gold, Silver, Gems, etc:
- Highly illiquid
- Only appreciate at the rate of inflation
- Only risky if you think the economy will improve. Gold is purported to be in a bubble right now, but Silver is not. It is about where it should be, and it will be going into a bubble, or so I hear. Gems are extremely illiquid and their value depends on your bargaining skills.
Conclusion: this is the ultimate safe haven if you think the economy is doomed and our country is doomed. Keep in mind that if you have too much of this stuff, you make yourself a target road warrior!
Useful Stuff like cars, houses, tools, and parts
- Barring strong deflationary pressures (like houses have now), these will appreciate at a lower rate as inflation
- These are risky because these things depreciate in value with time, but if the economy tanks as hyperinflation takes root – these will sell for much more than you pay for them now and they are easier to get and sell than gold and silver.
Conclusion: these are good to get if you are very pessimistic about what will be coming in the next year. Instead, look at the next suggestion!
Your Skills Fool!!
- ALWAYS LIQUID – if you have a skill people want you can sell it PERIOD.
- Some skills appreciate, some depreciate – so you must hedge yourself by learning a wide array of them. If you are reading this, you have access to the internet – WikiHow to make some product everyone needs and LEARN HOW.
- This is the least risky thing of all. If you go pick up some crappy tools at a swap meet and learn how to do some stuff that people want, then even if you don’t get hired you’ll be more useful and you will get value in that respect.
Conclusion: this is a must for everyone. You need to know how to do more than drive in rush hour traffic, answer a phone and e-mail, and eat fast food. If our economy rebounds, then you have a new skill that will save you money later – even if you end up hiring someone to do the work for you. You will be able to pick out someone who knows what he/she is saying from someone who does not. If the economy tanks, you can now do something people will need on the informal or “Black” market. Either way – you make and/or save money.