What about the role of giving in personal finance?

[Poker Player]

I write this post after having seen the following video of Dave Ramsey:

What You Think About Prosperity Is Wrong! - Dave Ramsey Rant

Ramsey has many haters as well as many supporters as he has helped many people get rid of debt and build wealth.

His approach to personal finance is the complete opposite of Kiyosaki. While Kiyosaki advocates using debt as a way to build wealth, using it to buy assets (mainly RE) and obtain a positive cash flow, Ramsey advocates getting rid of all debt and building wealth with your own resources. Mainly what he calls your most powerful wealth building tool: your income. With both systems you can build wealth, but in my opinion, for Average Joe, who tends to be impulsive, Ramsey's system is better.

In this video he argues that, despite what it might seem at first glance: that if you don't give money to anyone and keep it for yourself, you will get richer, it's actually the other way around. People who donate regularly end up building more wealth, as well as having better social relationships and a better life.

He defends it partly from a religious point of view, but I decided to create this thread because what he says fits my experience, even though I am an atheist.

The moment I started donating regularly and making extraordinary donations, also giving unexpected tips, etc., my personal finances, which were already going well, got a boost.

It could be a coincidence, but Ramsey has worked with thousands of people and seems to be speaking from experience.

That's why I'd like to hear opinions on how you think giving has affected you, your personal finances and your life in general.

[mk4]

Both people can be right. Using debt the "right" way — to fund a business can be a great move assuming you really know what you're doing; but at the same time it's should be essential to pay your sort of "bad debts" as soon as possible — you know, student loans and stuff because of the interest.

[Poker Player]

Both people can be right. Using debt the "right" way — to fund a business can be a great move assuming you really know what you're doing; but at the same time it's should be essential to pay your sort of "bad debts" as soon as possible — you know, student loans and stuff because of the interest.

Yes, that's what I said:

With both systems you can build wealth...

But it wasn't the main thing I was asking in this thread. I'm asking more about the role of giving or donating, especially on a regular basis, and the effect it may have on one's personal finances and life in general.

[Mometaskers]

I've seen a few vids of Dave Ramsey and though I agree with most of them I do believe sometimes it really is necessary to take some debts, especially at the start when you have nothing.

Back to the topic, I don't think there's anything supernatural about it. Generous people just tend to attract other people, in short they can end up having really large networks. You "give" and coz reciprocity and stuff you get back and then some and then you use that to give away more, rinse, repeat. And giving don't even need to be monetary, sharing leads, doing favors basically counts.

Actually some societies kinda revolve around giving. Go look up "Moka" on Youtube. (search "big moka" or you could end up suggested moka pot videos)

Of course you need to be pragmatic about it though, no point throwing resources at people who are obviously leeches.

[Rruchi man]

People who donate regularly end up building more wealth, as well as having better social relationships and a better life.

To receive more, you must give...not necessarily a thing of religion, just a law of life. I spent some time with a very wealthy and generous woman who is now late, while she was alive, in one of our discussions, she told me that - If you close your palms with money (you can't receive really, because your palms are closed) but when you are liberal and generous, with an open palm, you can receive also when giving.

It is also a mental thing, if i contribute a million dollars without thinking (it is because i can afford to), mentally, my mindset becomes bigger than that amount and i have adjusted my vibrations to get more than that, that's why i will get more. If i can't give an amount, it means my mindset hasn't grown bigger than that amount, regardless of me having it, because i see this sum as bigger than me, i have indirectly limited my mind on ways to keep getting more, so i may not get an amount more than that sum i have idolised.

[merchantofzeny]

The moment I started donating regularly and making extraordinary donations, also giving unexpected tips, etc., my personal finances, which were already going well, got a boost.

I remember reading somewhere where they did a study about donating and it turned out it have positive psychological effects. Or maybe it's just small effects compounding. Donating makes you happier, which rubs on people around you, whose happiness then affect you back. 

I don't know how to explain the increase in wealth but maybe you just make better decisions when you are feeling better.

[BITCOIN4X]

He defends it partly from a religious point of view, but I decided to create this thread because what he says fits my experience, even though I am an atheist.

The moment I started donating regularly and making extraordinary donations, also giving unexpected tips, etc., my personal finances, which were already going well, got a boost.

It could be a coincidence, but Ramsey has worked with thousands of people and seems to be speaking from experience.

That's why I'd like to hear opinions on how you think giving has affected you, your personal finances and your life in general.

I once asked my spiritual teacher in the past about why many non-Muslims are wealthier than Muslims in this world, and I was actually surprised by the answer where "Every non-Muslim does 1 good deed in this world then they will get a reward better than that in this world, while they are not guaranteed to get it in the Hereafter." that's what I believe so far from a religious point of view but you don't have to agree on that opinion.

As someone who is religious, I don't think it happened by chance, it's a gift we might get in return for kindness. From my point of view, giving alms or donating a small amount of income to those in need will result in more good that we will get regardless of whether it is in the form of money, aid or other unexpected things. Of course I'm talking about my religious beliefs, but perhaps you know and can feel that donating a little of your income will not make you poor but lets you get more.

[hyudien]

As a religious person, I tend to agree with Dave Ramsey statement. But I certainly agree with Kiyosaki concept of using debt as a way to build wealth. Because basically, Kiyosaki converts loans into long-term output, namely investments in RE. As for what Dave Ramsey said, it refers to building a source of confidence to give hope to many people to work together.

The conclusion I draw is that 2 concepts in building wealth are effective to use, depending on the criteria of someone who tends to be suitable to apply. Such as the effectiveness of the geographical location of the resource-producing area that can be processed in that place. Or indeed use the Kiyosaki method, where there are financial sources outside the area and an alternative to being able to reach them is to make loans to buy assets available in the market.

[Doan9269]

While Kiyosaki advocates using debt as a way to build wealth, using it to buy assets (mainly RE) and obtain a positive cash flow,

It is advisably not to be in debt for a business on the start up stage except for business expansion and buying any form of asset using debt should be base on several occasions of having experience of such asset and not a first time asset investment and such wealth built can be claimed by the creditors anytime if  terms were not met.

Ramsey advocates getting rid of all debt and building wealth with your own resources.

Obviously this is the best way to start and it guarantees having rest of mind without any FOMO.

[CaVO32]

While Kiyosaki advocates using debt as a way to build wealth, using it to buy assets (mainly RE) and obtain a positive cash flow,

It is advisably not to be in debt for a business on the start up stage except for business expansion and buying any form of asset using debt should be base on several occasions of having experience of such asset and not a first time asset investment and such wealth built can be claimed by the creditors anytime if  terms were not met.

Ramsey advocates getting rid of all debt and building wealth with your own resources.

Obviously this is the best way to start and it guarantees having rest of mind without any FOMO.

As much as possible, it is better not to have any debt as you grow your business. But if you are doing good, that's fine to have some loan if you are extending or expanding your business. But much better if you will pay it on time to avoid paying interests. Because it will pile up and you will end up paying handsome amount of money, for the interests incurred alone. Also, without debt will indeed give you peace of mind and you're not looking over your shoulder that someone will tap you and ask you to pay your delayed debts.

[Darker45]

Being generous to a certain extent is an investment. The old adage "the more you give, the more you receive" holds some truth. There are ways of explaining it. It could be explained from a spiritual point of view. It could also be explained in terms of character-building and ways to attract people and spread positive vibration. And it could also be explained from a business point of view.

I guess the last one is the thing that matters in this discussion. I've had numerous encounters that somehow prove that "the more you give, the more you receive." For one, the more you provide discounts to your goods or services, the more customers would buy from you. Another thing, in the government agency that I used to work, the more generous the supplier or contractor is, the more contracts they will get. In sales, for example, the more you treat your clients, the more you bring gifts to them, the more they will stick to your brand. As a matter of fact, I have a friend who worked as a medical representative and he said that whatever doctors request, may it be a planner, a laptop or desktop, an expensive meal in a newly-opened restaurant, and others, give it to them. That's one way of selling your product. I have a lot to share but, lastly, I used to work in a non-government organization and we had a lot of generous donors, many of them businessmen. Every time we need to buy something in huge amounts, we wouldn't go elsewhere but to our donors.

So this is probably the explanation. However, I have reservations when you simply say:

The moment I started donating regularly and making extraordinary donations, also giving unexpected tips, etc., my personal finances, which were already going well, got a boost.

[Poker Player]

So this is probably the explanation. However, I have reservations when you simply say:

The moment I started donating regularly and making extraordinary donations, also giving unexpected tips, etc., my personal finances, which were already going well, got a boost.

Hi, Darker45, I don't know why you say that and that's why I'm going to clarify.

From a scientific point of view, that one thing happens after the other doesn't mean anything. It is what they say "correlation doesn't imply causation".

I created the thread to see if people had had similar experiences, because although what happened to me might not be causally related, watching Ramsey's video I see that it seems that there could be something more solid than a simple correlation.

So I don't quite understand your reservations when you previously explained that there is at least some truth in it:

Being generous to a certain extent is an investment. The old adage "the more you give, the more you receive" holds some truth. There are ways of explaining it. It could be explained from a spiritual point of view. It could also be explained in terms of character-building and ways to attract people and spread positive vibration. And it could also be explained from a business point of view.

[jrrsparkles]

Many companies make more money using their debt but they are having enough money so even if their plan failed and has the repay the debt they can simply pay from their savings but for an average Joe it is hard to have such amount to pay back so it could be the end of their life that is why don't go with the debt strategy until you saved the same amount of money or assets which can be liquidated as same that you want to take loan.

[Reid]

I am surprised you are an Atheist. Cool.
I don't go to church but I am religious in my own way. I do believe religion doesn't matter when we are helping and all people who are generous are blessed. The heart feeds on caring about others and giving. Why do we smile so much and feel good whenever we help someone?

That's why I'd like to hear opinions on how you think giving has affected you, your personal finances and your life in general.

I have neighbors who borrows money at me and I don't tell them when they should pay nor put an interest in it. They can pay me whenever they can and I love how things worked out when they do pay up. About how it affected me, I/We never had any problem financially on a large scale and I can still afford to lend some for them without damaging our savings and daily budget.

IMO, debts are for those who are in a bad situations. I don't like debts, it stressed me so much that it affects my everyday life. Sleep, daily routines are wrecked, and worrying about it everyday will make you think about things you should not.  

[davis196]

I'm familiar with Kiyosaki,but I've never seen any videos made by Dave Ramsey.
His views about giving and donating are quite interesting,even though there's no direct correlation between the money you give for donations and your personal financial results.
Perhaps there is a psychological element in this.Giving more money for charity can boost your ego and make you feel better about your self,which makes you more productive and motivated to work,which leads to better  financial results.I don't think that this "giving" approach can work with sociopaths,though.
I can't agree about not having debt at all.It's OK to borrow money,if you know how to use them and you payoff your debts on time.

[Etranger]

I like the way in which debts are paid first better. I love Kiyosaki's ideas, some of them really helped me improve my financial literacy, it is just some of his theses are very difficult to apply outside of America. For example, in Ukraine, there are no opportunities to use debt, as well as the same loopholes in legal issues with real estate, which he describes. It is very difficult to create a positive cash flow when you have a debt hanging on you, the procent on which is growing every month. Therefore, it is necessary to take into account the conditions that exist in a particular country, in an attempt to follow someone's financial advice.

[Darker45]

So this is probably the explanation. However, I have reservations when you simply say:

The moment I started donating regularly and making extraordinary donations, also giving unexpected tips, etc., my personal finances, which were already going well, got a boost.

Hi, Darker45, I don't know why you say that and that's why I'm going to clarify.

From a scientific point of view, that one thing happens after the other doesn't mean anything. It is what they say "correlation doesn't imply causation".

I created the thread to see if people had had similar experiences, because although what happened to me might not be causally related, watching Ramsey's video I see that it seems that there could be something more solid than a simple correlation.

So I don't quite understand your reservations when you previously explained that there is at least some truth in it:

Being generous to a certain extent is an investment. The old adage "the more you give, the more you receive" holds some truth. There are ways of explaining it. It could be explained from a spiritual point of view. It could also be explained in terms of character-building and ways to attract people and spread positive vibration. And it could also be explained from a business point of view.

I said there's only some truth in it because it is not absolutely true. My point is that even if you are generous in such a manner that you honestly and regularly give your tithes, give relatively huge tips, give alms, donate to a number charities anonymously, give food to the homeless, and so on, it doesn't mean you will prosper financially. I think such kind of generosity doesn't have any correlation with financial prosperity. The most generous people I know are poor, at least financially or in material terms. 

"The more you give, the more you receive" is mostly true if the giving is a form of investment.

[Markinzo]

Giving is partly  a behavioural thing. And every behavior has consequences acrued to it, and as for giving, the consequence is extraordinary returns from that which you were able to give it.

Mind you this returns may not necessarily come to you directly from whom you must have given to.

Using myself for example, in the past few years I came to discover that I always get if not more than 3x what ever I give out generosity. And this has been working for me especially when the intentions are pure.

[Coyster]

but in my opinion, for Average Joe, who tends to be impulsive, Ramsey's system is better.

I have to agree with you that Ramsey's method is much better for individuals who are not finacially stable, i mean, debt can be a good way to create wealth, but it more often than not works for individuals who are already comfortable/rich, rich people take loans all of the time to make more money and it does not affect them at all, they have stipulated funds for more or less everything, and sometimes they may need someone else's money for a little while, of which they definitely will pay back. But for an individual who isn't financially stable, or who is poor, attempting to borrow money to create wealth would prolly not work, you'd always have some basic needs to handle and before you know it you have used up the money you borrowed, thus leaving you in debt with no extra source to clear your debts, for such people it is either they work for a long while, set up a savings and start up a business somewhere along the line, or they receive a donation of some sort that does not come with a pay-back clause.

"Givers never lack" they say, and i think that is true, and really it does not even have anything to do with religion, giving connects you to more people who could turn out to present you to more opportunities to make more money. If one loves giving they also tend to work harder cause they know they need a whole lot of money to help others as well as themselves.

[crwth]

I agree with what Dave Ramsey said that there's always a difference between generosity and just hoarding your money. It's also up to luck because you can never control what would happen to you, but I guess it's good karma. No matter what you believe in, it's always going to be a positive impact if you were to give out your blessings.

A personal view on it, I would like to be more generous and then prosper the right way. Not that because I have money, then I'm already prosperous. It's not always like that. If you are happy, you will be able to be successful because you have helped someone.