Newyear – Let’s Walk the Talk

January 6th, 2010 Vijaianand No Comments »

Happy Newyear Everyone!!


Year 2009 has come and  gone. It surely made imprints with lot of headliners and became a part of the history book. Year 2010 just started ticking it’s counter and adding a brand new decade in the 21st century. Another thing to notice about 2010 is, by doubling the last 2 digits either like “10” *2 or 1+1 0+0 makes the first 2 digits “20”. I found that to be interesting because it doesn’t happen often. Let’s hope year 2010 doubles our happiness by doubling our wealth and keeping us healthy.


Newyear Resolution -A waste of time


“May your troubles last as long your Newyear Resolutions” – Author Unknown


I saw the above funny quote posted outside of an auto repair shop. Nowadays people are not at all really serious about newyear resolutions and studies literaly reflects the downtrend. In the recent resolution study, while 52% of participants were confident of success with their goals, only 12% actually achieved their goals despite all the best intenstions.

Whether you resolve your resolution are not, somebody is will make big buck out of you. It is most likely going to be,


1. Fitness centers and Trainers
2. Weight loss program and weight loss book sellers
3. Dieticians and Weight loss Food producers


Just be aware of it and don’t get pulled by all the marketing gimmicks and TV ads. Most goal setting experts believe this is due to ignorance concerning how to set goals properly. Let me share my very own 3 Talk method which might help achieve things in all the areas of your life.


T1. Talk to yourself first


It might seem wierd but the truth is everything starts from you. You have the answers to know what will work  best for you! So, use this time make an appointment to yourself to think with an open mind, about past year’s mistakes and missed opportunities or goals. Ask yourself what type of life you would like to create for yourself in the coming year.


If you have the habit writing journal, it helps in this process. If you don’t have one, I would recommend to start one today.  Try to take these steps during your own interview.

1.Check your past year goals and see how you resolved/performed. Pat your back if you scored well. Tweak them if it need to continue this year.

2. Make 3 new goals for this year whether short or long term. Just Three only, no more!


3. KISS method – Keep it simple stupid. Always set goals as simple as possible to start with.  Try to set SMART goals. These are goals that are Specific, Measurable, Achievable, Relevant, and Trackable. If you want to lose weight, start with losing 5lbs in 2 weeks and continue to maintain it for 2 more weeks.


4.  Write them down and start planning towards working on those goals. If you plan to reduce wait, look for a good and cheaper options to start instead of getting an expensive Treadmill at first. Try signing up for $10 fitness center which has mushroomed in many areas.

5.  Take action by start working out twice a week and gradually move to thrice a week. Adjust your diet accordingly and you will surely see a change in your health. Be resilient.  Don’t throw towel in just a week. Try atleast 3 weeks. Ask for help is a old techique. I would say advertise your goals which will motive yourself to achieve them when your friends ask about it.  Eva

2T. Talk to your Doctor

Next an important one. Make an appointment with your family doctor to do the physical checkup during the month of January. Almost all the insurance companies cover the physical check once a year upto $300. Most physical checks including labs won’t take more than $300. I try do it by end of Jan so I can see my levels on  LDL, HDL, total cholestrol, Sugar and compare from the last years. 

By doing at the beginning of the year helps to manage those levels  or work to improve on them in the coming months. Prevention is better than cure. By doing physical checkup atleast once a year, it surely helps to find any problems before ahead and gives more time take action to treat the problem in the starting stage itself.


3T. Talk to your Financial Planner/CPA

Finally, your wealth check up. You better meet with your CFP/CPA to check your current financial status. If you are your own financial Planner, try to set up a time to go over your financial condition. Check your financial goals and objectives, see it is performed last year. Make any changes to your short or long term financial goals for this year. Don’t forget to check on your IRA, SEP for 2009 to get ready for the tax season. If you missed out, you still have 4months to catch up. Also plan for 2010 contributions and save more money on tax returns.

Also take time to check some important documents like WILL, Trust, Durable Power of Attorney and Living Wills. If there is any change in your family staus like new kid, new house, you surely need to make proper adjustments to the Will or Trust to reflect your current status to avoid any future problems.

By doing just these 3 simple Talks at the beginning of the year, you are setting your life boat in proper condition to sail this new year in the right direction to reach your destination.

Happy Goal setting!!

Is Micro financing the answer to end poverty? – Interview with Bhalchander, Founder of United Prosperity

December 30th, 2009 Vijaianand No Comments »

Recently, I came across United Prosperity, a organization which is similar to kiva.org guaranting loans to entrepreneurs in poor nation. I took some time to contact and talk to the founder to hear more about the organization.  Here is the snapshot of the interview.


Hello Bhalchander, Welcome to nrimoneyreallymatters.com.
 
Thank you for taking time to talk to me about your organization, United Prosperity (UP). I looked at the http://www.UnitedProsperity.org  website and it looks inviting. You made real good progress in the past few months. 

1. Before we talk about United Prosperity (UP) which is making waves in the media recently, let’s get to know you. Please go ahead and introduce yourself to the readers.

Vijai, Thank you very much for giving this opportunity to talk about United Prosperity. I grew up in Pune, India and live in the SF-Bay Area. I did my Bachelors degree from IIT Bombay and after working for two years with Tata Motors did my MBA from IIM Bangalore. I subsequently worked with Wipro, Microsoft, Mphasis and most recently Infosys and led several multi-year projects in financial services and insurance. Since September 2007 I left my job with Infosys to set up United Prosperity and since then I have enjoyed seeing this idea become a reality.

2. UP is your brainchild, share with us how the idea was born and evolved? 

Having grown up in India I had noticed on numerous occasions that the poor were borrowing money from their employers, friends, shop keepers or others to meet their family needs. The amounts they borrowed used to be pretty small E.g. Rs. 500 ($12). This always puzzled me and I sometimes wondered why banks would not lend to them. 

Fast forward several years later I was consulting with an organization called PMI. PMI does mortgage guarantees. i.e. A mortgage guarantee  offered by PMI allows people who cannot put the 20 % down payment to get a mortgage and achieve the dream of home ownership. In case the borrower is unable to payback the mortgage PMI will cover the losses of the bank upto a certain extent.  So it struck me that if one can get a $500,000 mortgage with a guarantee, why cannot we make microloans available to people using a guarantee.

United Prosperity builds on the same idea. In case the microfinance institution lending to the poor entrepreneurs defaults on its loan to the bank, then the micro lenders or  guarantors on our website will cover the losses up to a certain extent. With the guarantee the bank is more open to making a loan to the microfinance institution which lends to the entrepreneurs.
I have been fortunate to get the support of my team mates Chiradeep Vittal, my wife Shubha Shankaran, Ashok Parameswaran and several dozens of volunteers who have helped us start United Prosperity. We also got great pro bono support from institutional supports including Cognizant, who built the website, Netsuite who provided us the accounting software, several law firms who did the legal research and books2taxes.com which does the accounting for us.

We became operational in the summer of 2009 and have supported more than 200 entrepreneurs so far.


3. Tell us in general about UP and its mission/vision in elaborate.

Our mission is to allow people to combat extreme global poverty and multiply the impact of their microloan through loan guarantees.

There are small entrepreneurs all over the world who cannot afford to start and grow their business alone. Expanding their business may be the only means to adequately feeding their family or sending their children to school. However, banks do not lend to them without collateral, and that’s where people like you and I come in.


We can become a compassionate social guarantor with United Prosperity by providing an interest-free cash collateral or microloan guarantee for an entrepreneur on our website. Based on our microloan guarantee, the bank makes a loan which is nearly double our contribution.  No minimum amount is required, and on loan repayment we get our money back.




4. Do you really think by helping or lending needy entrepreneur, you can abolish poverty? How is it possible? You are also just helping like any other charity organization.

Abolishing poverty is not going to happen overnight, but studies have shown that through microcredit people do improve their livelihoods and come out of poverty over a period of time. Microfinance is not the only way to end poverty but it is a highly sustainable way. It is also one of the few programs which have scaled to a good extent.

5. From outside, UP seems like a copy cat of Kiva.org, another micro finance lending institution. The model seems to be same except the way you lend to the Micro finance institutions. From your answer, it is seems to be totally new idea with a similarity to Kiva.org. If that’s so, tell us the difference.

With other international lending models, the loan made by individual lenders goes to a  microfinance institution which in turn lends to the entrepreneurs. In our case, the loan made by the individual lenders serves as collateral or guarantee which is deposited with a lending bank. Based on the guarantee, the bank makes a larger loan to the microfinance institution which in turn lends to the entrepreneurs.

Our model has several advantages:
a) Doubling of impact: Since the bank makes a loan which is nearly double the guarantee amount, there is a doubling of impact for the individual microlenders.

b) Mitigates foreign exchange risk: Since the loans from Bank to Microfinance institution(MFI) and MFI to entrepreneur are in local currency, foreign exchange risk is mitigated for the MFI and the individual lenders. 

c) Local linkages: Our guarantee facilitates the creation of local linkages between domestic banks, MFIs and poor entrepreneurs. In the course of repaying the loan, both the entrepreneur and the MFIs develop credit histories that will enable them to access more funds at a later date with a lower guarantee percentage, or even without a guarantee. MFIs also get to form relationships with banks and offer other products like savings, insurance, money transfer etc. through the bank.

d) Manages risk better: We get the additional benefit of monitoring of the loan by the bank which is not available with other person to person models. We are also focused on those living in extreme poverty typically, living on less than $2/day.


6. You kept mentioning about “Guarantees”. What exactly is a guarantee? How does it different from direct lending?

A loan guarantee is an agreement between a guarantor, a lender, and a borrower in which it is agreed that a guarantor will repay the loan if the borrower defaults. You can learn more about guarantees going to our website at http://www.unitedprosperity.org and clicking the about us link.

7. Your loan/entrepreneur profiles are very limited and centered towards India only. Why and any reason?

We only launched this summer and we eventually plan to roll out to other countries. We will launch in other countries once we have greater traffic to fulfill the need.

8. I see all the guarantees are going towards group of entrepreneurs? Why aren’t they individually listed?
We try to reflect the local lending model as much as possible. Most of the microcredit lending is group and we reflect that.

9. Do you think you are competing against Kiva.org for loans and lenders? How you see yourself placed against Kiva.org which has grown manifolds in recent years?
Kiva  has  done a great job in popularizing online microlending. United Prosperity is focused on entrepreneurs in extreme poverty and offers greater impact for individual microlenders with mitigated foreign exchange risk.

10. KIVA is also helping people to get out of poverty and UP just jumped in the same bandwagon. Why someone has to shift their strategy from KIVA to UP? Is there any added advantages?

As I mentioned earlier, our model is totally different from Kiva. We are not
lending, we are only giving guarantees to the loans. We avoid the foreign exchange risk. May be both of our destination might be similar but the path we are taking has lot of more different and more  benefits for both sides.

11. I see many features lag in UP compared to KIVA like forming a team, communicating with other members etc., Are you plan to add them soon?

We have the groups feature on our community site : http://unitedprosperity.ning.com.  Members can form groups and communicate amongst themselves here. However, one cannot assign a guarantee to a particular team. We plan to add that feature in some time. We will be also be adding the gift certificate features by the end of this year.

12. What are you plans in getting the word around?

We have largely used social media marketing to get the word around – facebook, twitter so on. We recently got a google adwords grant and plan to use that for increasing visibility. We will be soon introducing a gift certificate feature for members to invite their friends and family. We also look forward to people like you and others writing about United Prosperity in their blogs and telling their friends.

13. Do you plan to expand your offerings to other nations? If so, anything currently on the works?

Yes, we plan to expand to countries other than India, but the expansion plans are still at a very early stage. Apart from that there is also an ample need in India. The World Bank estimates that 456 million Indians (42% of the total Indian population) now live under the global poverty line of $1.25 per day (PPP). This means that a third of the global poor now reside in India.

14. What are the ways, others can help your organization?

The easiest way is to sign up on http://www.unitedprosperity.org and start guaranteeing loans. It is very easy to sign up and one could start with even $10. Apart from that you could tell your friends, post a link to United Prosperity on Facebook or Linkedin. You could also write about United Prosperity in your blog and help spread the word. You could also choose to volunteer with us if you could spare around 8 hours per month.

Thank you again Bala. I appreciate your time and all the best for success. I know it is not an easy task to setup an organization legally of this big with a strong motive too improve their life style of poor and needy by bringing us altogether. It is a noble cause and hope you will get more support from the community.


Hope you all enjoyed my interviewer the founder of United Prosperity, Bhalchander. As a contributor and lender myself in kiva.org, I recently joined UnitedProsperity.org  few weeks ago and started making few guarantees. It was a simple process and gave me full satisfaction by providing opporunity to help needed entreprenuer directly for their growth and improved life style.  I always feel lucky to have enough to help needy and find different avenues to do so. Kiva.org and UnitedProsperity.org are doing a great job giving us these new avenues.

I strongly believe in the Chinese proverb, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” 

Go ahead and make a difference in lending your hand to others by lending your money, start with just $10 or $25. Your money is not earning these days sitting in a bank account; let it at least do some karma to you. If you have any questions about UP, please don’t hesitate to comment here. I will try my best to get answers for them.

Tis the Season of giving – Ways of Giving and Tax Tips

December 23rd, 2009 Vijaianand No Comments »

In the last blog post, we saw the essence of true giving and free tools available to find an organizations that suits your lifestyle or passion to start thinking about donating. This post, we are going to see few different ways one can give and help. Also we will look at some Tax Implications of gift giving.

There are variety of ways to contribute, donate or give. A donation doesn’t have to be big and it doesn’t have to be money either. It is giving heart that matters. Let’s categorize charitable gift giving into two ways as Direct and Indirect.


I. Direct Donations


Cash is king whether it comes to businesses or non-profit organizations. At this tough economic juncture, it is not just the individuals and corporations which are feeling the pinch. Many non-profit organization are experiencing big hit in their donation dollars. This year Good will, Salvation Army and many other organizations has reported a decline in their donation. They need our help more than ever in this tough times. Giving Cash is a great way to show your support and it has a direct impact to the cause. Many organization now accept credit cards for donation.  But there are certain limitation to cash gifts in regard to Taxes. We will look at them later below.


II. Indirect Giving


1. Give by Gift Cards

You can buy charity gift cards at sites like http://www.tisbest.org/, www.charitygiftcertificates.org and www.JustGive.org. and give to the reciepent. He/she can spend or use the gift card and donating to their favorite society. It is a great feeling for both you. You give him the gift, he/she gifts to the favorite charity. Also there are lot of webistes which accepts unused store giftcards and donate the proceedings to charities. If you have a macy’s gift card which has balance of $2 or something. Many of us just threw it away because we won’t be able to buy anything using the small money left over. Instead, you can just give it away to charities by using these websites.

2. Don’t donate but Lend or Loan

I don’t believe in just giving  away money unless it is tipping somebody. Because the recepient will be back again to street asking more. It is better to help them find a job and make them work feed themselves. Like the chinese saying, “Don’t give them fish, instead teach them how to fish“.  There are few organizations like Kiva.org and UnitedProsperity.org which provides the platform to do just that. They help the donor to lend/loan money directly to aspiring Entrepreneurs in the developing countries. I started myself few months ago in both these websites and started lending and helping people.


 



3. Shop and Donate


It is called Cause related Marketing and are Selfish giving. Starbucks is helping to fight AIDS in Africa. Macy’s is giving to the Make A Wish Foundation. And Toys “R” Us is giving to Toys For Tots Many more retailers and manufacturers are partnering today with not-for-profit organizations in cause-related marketing campaigns. On one hand, these campaigns raise awareness, support, and donations for social causes such as global hunger relief. On the other hand, they enhance corporate reputations, customer loyalty, and financial gains for companies.

An example of cause-related marketing is an effort organized by Macy’s, Pfizer, and other businesses on behalf of the American Heart Association. The program has raised over $32 million in donations for the charity, while generating over 1 billion media impressions for corporate sponsors. So just buy shopping in these stores, you are indirectly benefiting some non-profit organizations. Whether you call this has selfish giving or not, it is at least benefiting somebody thats what matters. There was an article/report posted in npr about this cause related marketing. Check it out.


III. Volunteer your time


Time is precious and it has value. If you strapped with cash, you can also give your time. There are lot of local charity organization like hospitals, resale shopes which migh need help during this holiday times. You can always take time to volunteer and even claim those hours in your Tax returs. Talking of taxes, now its time to check what are the ways we can benefit from gift giving.


Tax Advantages


Giving not only satisfy our inner soul but also helps to save and get some money in return as an appreciation from Uncle Sam. Tax incentives is an added bonus encouraging many to contribute.


For charitable contributions of less than $250, you must keep a canceled check, credit card receipt or electronic funds transfer receipt. Or you must have a letter from the charity acknowledging receipt of the contribution and stating its date and amount. For charitable contributions of $250 or more, you’ll also need a written receipt from the charity substantiating the amount of cash contributed and a description (but not the value) of any property — other than cash — contributed.


And you must disclose whether the organization provided any goods or services (such as a theater ticket or dinner) in return for the contribution.
If you donate property, such as clothing, valued at less than $250, you must keep a receipt from the charitable organization showing the charity’s name, contribution date, physical location of the contribution and a detailed description of the property (but not its value).


For larger donations, you’ll need even more documentation, including a description of how you acquired the property (purchase, gift, inheritance), the date you acquired the property and the original cost of that property. Donated property worth more than $5,000 requires a qualified appraisal, as do lesser-value objects that aren’t in “good” condition.


Conclusion


“Giving from a full heart is one of the most joyous things you can do…“,  – from the book “The Secret”.

Make this holiday season special by donating your time or money in any above ways. It will surely sooth your soul and even make your pocket happy by getting some back so you can continue giving.

Happy Holidays!!

Sources: Internet website relate to charity giving
Photo source: www.oregon-crna.org

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