Kiva is a great organization I have mentioned before (e.g. microfinancing for entrepreneurs). They let people to loan money directly to entrepreneurs around the world through their web site. Loan can be as small as $25. As the business produces income from the capital loaned the loan is paid back. Kiva is setup as a charity, so those making the loans do not make a profit. In actuality the capital is provided through a Kiva partner (intermediary) that often does change interest to the entrepreneur (many are non-profits themselves that use the interest to fund operating expenses – and I think some are for profit, though I may be wrong on that).
I loaned an additional $300 to 6 entrepreneurs today and donated $50 to Kiva. The entrepreneurs I helped fund are located in: Togo, Dominican Republic, Senegal, Nicaragua, Bolivia and Uganda. One of the things Kiva does very well is take advantage of the internet to connect to these people. You can see short profiles and photos of them on my Kiva profile.
I hope some of you readers will join and provide loans. If so I would love to add a link to your profile from the Curious Cat Kiva supporters page.
Related: Using Capitalism to Make the World Better – Kiva: Internet based Microfinancing – Make the World Better
Great advice from Warren Buffett. He spoke to students at UTexas at Austin business school and one of the students, Dang Le, posted notes of the discussion online. The internet is great.
On diversification:
Great advice. Warren Buffett uses great concentration (little diversification) but you are not Warren Buffett.
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Getting turned down by HBS [Harvard Business School] was one of the best things that could have happened to me, bad luck can turn out to be good.
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We did an informal office survey by looking at the total tax footprint versus the total income. I earned 46 million and paid a tax rate of 17.5%. My rate was the lowest, the average was 33%, and my cleaning lady paid 40%. The system is tilted towards the rich. The Forbes 400 total net worth has gone from 220 billion to 1.54 trillion, an increase of 7-to-1. You see in legislature that there is lobbying carried on by the powerful over issues such as the estate tax and carried interest for private equity investments. We need to flatten income and payroll taxes, and those making under $30,000 shouldn’t be bothered.
It is hard to beat reading Warren Buffet’s ideas on investing and economics.
Related: Buffett on Taxes – The Berkshire Hathaway Meeting 2007 – Buffett’s 2006 Letter to Shareholders – Warren Buffett’s 2004 Annual Report – books on investing
Warren Buffett and Bill Gates are two of the richest people on the planet (though many are gaining on them recently). Both have pledged to give away nearly all (over 99%) of the money they have earned to charity. Both have spoken out against the harm to children and society (and the capitalist system) when huge wealth is provided by lottery of birth to a few instead of provided to those who earn the money.
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Melinda and Bill will very likely give away more than $100 billion in their lifetimes. Already the foundation has disbursed $14.4 billion – more than the Rockefeller Foundation has distributed since its creation in 1913 (even adjusted for inflation).
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Bill, who is nine years older than Melinda, plans to spend more than 40 hours a week on philanthropy, leaving 15 or so for his duties as chairman of Microsoft.
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Early on she and Bill agreed to focus on a few areas of giving, choosing where to place their money by asking two questions: Which problems affect the most people? And which have been neglected in the past? While many philanthropists take the same tack, the Gateses, who love puzzles, apply particular rigor. “We literally go down the chart of the greatest inequities and give where we can effect the greatest change,” Melinda says. So while they don’t give to the American Cancer Society, they have pumped billions into the world’s deadliest diseases – most importantly AIDS, malaria, and tuberculosis – and failing public high schools in the U.S.
Charity is important. As is understanding that capitalism is about people earning their wealth not getting it from Mom and Dad. Unfortunately many politicians don’t know what capitalism is and think that providing huge inheritances to some kids of rich people is capitalism. Providing resources to those that didn’t earn them is the opposite of capitalism. They need to learn. If they oppose capitalism and would rather assure the kids of the rich get huge inheritances that is fine, they just shouldn’t get away with claiming they support capitalism.
Related: Estate Tax Repeal (a very bad idea) – Helping Capitalism Make the World Better – charity links – Multi-millionaires giving to charity not creating later day idle nobility
Another interesting experiment from Google: Using Prediction Markets to Track Information Flows: Evidence from Google
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Google’s prediction markets are reasonably efficient, but did exhibit four specific biases: an
overpricing of favorites, short aversion, optimism, and an underpricing of extreme outcomes.
Interesting paper. Prediction markets are an interesting attempt to use a market principles to gain insight into future prospects.
Related: Google Experiments Quickly and Often – Secrets of the World’s Best Companies
Here is my comment on, The Sun Devil Suggestion System a few days ago:
Here is a post on the Freakonomics blog today, Why Don’t Sports Teams Use Randomization? by Ian Ayres:
He then goes on to discuss an equally interesting but different topic faulting coaches for failing to take enough risk in football – in going for a first down on fourth down. That supports my gut instincts. The “conventional wisdom” seems mainly about not “seeming stupid” not the best long term results.
Related: Testing Mixed-Strategy Equilibria When Players Are Heterogeneous: The Case of Penalty Kicks in Soccer – Minimax Play at Wimbledon
I have posted some photos from my walk last year on the Capital Crescent Trail in Washington DC.
The Capital Crescent Trail goes along the Potomac River in Washington DC (on the C&O towpath). I hiked first along the Arlington, Virginia side of the Potomac (starting at the north end of the Teddy Roosevelt Island Parking lot) then crossing over at Chain Bridge and heading back down the Capital Crescent trail and over the Key Bridge to and making a loop hike out of it.
More photos: Shaker Village of Pleasant Hill, Kentucky – Paris, France – Glacier National Park – The Cloisters Museum and the Museum of Modern Art – Great Falls National Park
Frontline World traveled to Uganda to explore the impact of microfinance and provide some great details on how Kiva is bringing economic opportunity to entrepreneurs. The site includes details and a nice webcast. It is great to see how people can connect directly using Kiva. And it is great to see how people can take small loans and some effort and financial literacy to make a living for themselves. The effort of these entrepreneurs to manage their finances would benefit many people in the rich world plan for retirement…
As I have mentioned before, if you loan through Kiva send me a link to your Kiva page and I can add it to the Curious Cat Kivans page.
Related: Make the World Better Using Capitalism – Helping People Help Themselves – Make the World Better – How Rich are You
We posted on Muhammad Yunus and Grameen Bank when he was awarded the Nobel Peace Prize last year. Here is a nice Interview with Mohammad Yunus:
So microcredit can be a social business. I don’t lend money to the poor people to make money myself. I lend money to the people to help them get out of poverty, so I can keep the interest rate low, because I don’t need to make money for myself. As long as I can cover the cost and run the company, that’s good enough. So that’s the idea for social business. So once we include this into the business world, tremendous things can happen in poverty alleviation, in nutrition, in health care, in child care, you name it — whatever problem we see around the world can be framed, can be designed as a social business and address that.
Today we leave everything to the government. Let government solve all the problems. We citizens are free, we’re busy making money. That’s not the way it should be. We citizens, we individuals, are capable people addressing social issues. Maybe address a small social issue within my neighborhood, maybe within my district, within my village. Government has to cover the whole country, that’s the only difference. But I’m more innovative than the government. I’m more enterprising than the government.
Related: Harnessing Capitalism to Improve the World – Microfinancing Entrepreneurs – Deming on the Purpose of Organizations
I have mentioned Kiva before: Microfinancing Entrepreneurs.
Kiva is lets you loan money directly to an entrepreneur of your choice. Kiva provides loans through partners (operating in the countries) to the entrepreneurs. Those partners do charge the entrepreneurs interest (to fund the operations of the lending partner). Kiva pays the principle back to you but does not pay interest. And if the entrepreneur defaults then you do not get your capital paid back (in other words you lose the money you loaned). I plan to just recycle repaid loans to other entrepreneurs.
I have just placed $150 in loans to 6 business entrepreneurs (in Honduras, Indonesia[2 loans], Tajikistan, Uganda and Ukraine) – and a $100 donation to Kiva. Adding to my previous loans of $350. Since our last post the Oprah Winfrey Show, President Clinton’s newly released book Giving and others have sung the praises of Kiva and made it a challenge to find entrepreneurs of Kiva to lend to. That seems to have been partially fixed the last few weeks (though still they limit you to no more than $25 per entrepreneur – in order to allow the large numbers of people that want to lend to get through).
If you lend through Kiva, add a comment with a link to your Kiva page and I will add you to our list of Curious Cat Kivans.
I have mentioned previously the horrible “service” I received from Discover Card. They actually sent me a check finally for the overpayment. They still have failed to send me the cash back reward I earned. ust spun off their Discover Card subsidiary today). As I stated before if they sent me the money they owed I would loan that through Kiva and add an equal amount from me. Obviously I exceeded that with the loans mentioned above. If they send the cash back bonus they owe I will do the same thing.
Related: Kiva: Microfinance Loans (posted on Christmas day 2006) – helping people succeed economically
Walking to accomplish tasks (getting food, going to work, shopping, going to play basketball) provides a better quality of life than having to drive (getting stuck in traffic jams…) and saves money and protects the environment. Walk Score is a cool web site that lets you calculate a walkability score. I would imagine the better the walkability score the better for the prospects of a real estate investment. You still have to determine if the current price already reflects the long term benefits to quality of life (which are then represented in increased prices) – I think often they will not be providing an investing opportunity. My guess is that real estate would increase above the market if you invested in areas that show walkability score increases during your ownership.
Related: Urban Planning and Real Estate Investing – Real Estate articles – 30 year fixed Mortgage Rates – Real estate blog posts