One of my brothers has always liked to say:
“I’d rather owe you that money for the rest of your life, than cheat you out of it.”
The concept of debt – of payments and balances; of the good kind versus the bad – is interesting to consider.
- Borrow to invest: Good.
- Borrow to survive: Bad.
- Default on a mortgage: Lose all of your equity. It’s probably what you deserve.
- Destroy the economy: Have a finger wagged at you, but you get to keep your millions.
It’s Easy to Become Skeptical
I’m not advocating that people shouldn’t have to pay their bills. I’m questioning the demonization of some who default versus others. If you’re poor and are late in paying your light bill, you’ll have to figure out a way to live in the dark. When the average person declares bankruptcy, they are looked upon as failures, but if you’re a billionaire like Donald Trump, you can declare bankruptcy four times with very little, if any, stigma attached.
“I’ve used the laws of this country to pare debt. … We’ll have the company. We’ll throw it into a chapter. We’ll negotiate with the banks. We’ll make a fantastic deal. You know, it’s like on ‘The Apprentice.’ It’s not personal. It’s just business,” Trump told ABC’s George Stephanopoulos last Thursday. ABC News, Amy Bingham, ABC News, April 21, 2011
Investing Without a Net
To me, individuals who invest are far more courageous than corporations who do the same. There is no corporate veil to shield them from the repercussions of a misstep. Our 401(k) accounts fuel the economy, but we have very little control over where our investment dollars go. Often, the best that we can hope for is to earn modest returns on our retirement nest eggs while avoiding having those returns eaten up by fees and a down market.
Warren Buffett and investors in his company, Berkshire Hathaway, have realized enormous returns on their investments, as demonstrated below, from 1990 to present.
Your eyes aren’t playing tricks on you. The current per share price is a whopping $139,803.00.
Investing in Each Other
Leaving the inequities of the world aside for now, I’d like to talk about the ways that we invest in each other. I’m no Warren Buffett. None of us are, but I still like to invest in people in small ways.
No debt is incurred in making these investments and the returns can’t be measured on a balance sheet.
The investments that I’m talking about are those that we make in people, in their dreams, and in their life-force. I think that the efforts of regular folks should be encouraged and celebrated, so here are some of the ways that I’ve found to do that.
Every once in a while, I’ll come across a Kickstarter project from a little guy (or gal) who is trying to do something – all they need is a little help. I’m not talking about established companies who view Kickstarter as a new way of financing their mega-projects.
I’m talking about people like M.C. Olmo (Marielba), who has written a book. Last weekend, I found her Kickstarter project. Her pledge goal is a mere $300 – the cost of her illustrator.
That’s a dream that I can invest in.
I wondered, what would my $20 do for me? I could buy three packs of cigarettes, or five gallons of gas, or I could play a tiny role in helping someone else’s dream come true instead. She’s reached her modest goal, but her campaign continues for three days, so if you’re interested, here’s Marielba’s Kickstarter page.
As a bonus, I may even love the book when I get it.
I’m on my 11Th loan on this micro-lending site. Each time that a loan is paid back, (and they all have been, so far) I get to re-lend my original investment amount to someone else. Yippee!
Kiva provides updates on how each investment has helped fledgling entrepreneurs to expand their small businesses and help their local economies.
We All Have Dreams
There are many ways in which people help others to realize their dreams every day. Since we can’t rely on the media to tell us about most of them, it’s up to us to tell each other. I think that most of us (except Yankee fans) are hard-wired to cheer for the underdog.
Their small victories are ours. Ours are theirs. Let’s celebrate together!
Please share some of your favorite ways of investing in people or tell me how others have invested in you. I’d love to hear about them.