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Random Acts of Maths - Interest-Funded-Charities

  1. profile image0
    JaxsonRaineposted 5 years ago

    Let's say you have $1 billion to spend on charities... how would you go about it?

    I love interest-funded charities, where all payments that go out come only out of interest. Here's why.

    1) You take the $1 billion, and pay it out to charities. $1 billion donated.

    2) You take the $1 billion, invest it in treasury bonds(assuming 5%, which is actually on the low side), and donate the full amount of interest. That's pretty generous, right? After 100 years, you still have $1 billion earning interest, and have paid out $5 billion into charities.

    3) You take the $1 billion, invest it in treasury bonds(assuming 5%), and donate 4%. After 100 years, you have $2.7 billion earning interest, and have donated $6.8 billion into charities.

    4) You take the $1 billion, invest it in treasury bonds(assuming 5%), and donate 3%. After 100 years, you have $7.2 billion earning interest, and have donated $9.3 billion into charities.

    5) You take the $1 billion, invest it in treasury bonds(assuming 5%), and donate 2%. After 100 years, you have $19.2 billion earning interest, and have donated $12.1 billion into charities.

    6) You take the $1 billion, invest it in treasury bonds(assuming 5%), and donate 1%. After 100 years, you have $50 billion earning interest, and have donated $12.3 billion into charities.

    See... more rich people, instead of just donating to charities, should take advantage of the power of compound interest.

    Here's hoping that I win the powerball someday.

    1. Mighty Mom profile image89
      Mighty Momposted 5 years agoin reply to this

      Very cool.
      Although you probably won't be around in 100 years to see the full interest-bearing fruits of your labor.
      smile

      1. profile image0
        JaxsonRaineposted 5 years agoin reply to this

        Nope, probably not.

        But like you said, I'm not a megololamaniac thingamagic, so that probably doesn't matter.

        Do you know why this works?

        It's because wealth is all imaginary. It's just what we all agree that it is.

        When you deposit money into a savings account/treasury bond/investment account... you create wealth.

        Because you have the money you put into it, and the account/bond/fund has the money it gets to invest, and we count the money twice. It's basically a bubble, but our entire economic system is built on it.

        So the more people who invest their money, instead of just spending it... the more wealth there is for the entire society. Yeah, the majority of it goes to the top, but the more wealth, the more the people at the bottom have too.

        Funny that a bubble is what we depend on, and a bubble is what can make everyone richer.

        1. Mighty Mom profile image89
          Mighty Momposted 5 years agoin reply to this

          Preaching to the choir on the idea of investing.
          I may be liberal, but I'm not stupid.
          lol

    2. Josak profile image59
      Josakposted 5 years agoin reply to this

      Can't argue with that. Spot on.

    3. Josak profile image59
      Josakposted 5 years agoin reply to this

      Here is another Random act of Math. According to a lot of research it's cheaper to buy homeless people a house, provide them with a life manager and make jobs for them than it is to let them live on the street, primarily because the homeless cost a lot in terms of police work and jail expenses and because they have more need for emergency care than any other demographic of society because of the conditions they live in but they can't pay for it.

      http://www.nhchc.org/wp-content/uploads … m_0901.pdf
      http://www.gladwell.com/2006/2006_02_13_a_murray.html

      1. habee profile image89
        habeeposted 5 years agoin reply to this

        That's sort of the same thinking I have about the poor. I say we take care of them completely until they can be properly trained/educated for a decent job. We pay for food, rent, daycare, transportation, power, etc. as long as they're successful with their training/education. In most cases, that would take 2-4 years, but after that, they'd be productive citizens. My conservative pals think I'm crazy, but I honestly think it would be cheaper in the long run. Of course, we'd have to have jobs available. Whatcha think, Josak?

        1. Josak profile image59
          Josakposted 5 years agoin reply to this

          Absolutely. Similar things are done in many countries, in New Zealand for example college and trade school is free and rent and cost of living is covered for the college months (as long as you pass), seasonal work is arranged for students for the holidays. The results have been great and the program more than paid for itself. But I must say that is dangerous pinko talk right there tongue

  2. habee profile image89
    habeeposted 5 years ago

    Oh, no! Jaxson is using...wait for it...WEAPONS OF MATH INSTRUCTION!!

    1. profile image0
      JaxsonRaineposted 5 years agoin reply to this

      I'd like to see you prove that I have such weapons... your inspectors won't find anything!

 
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