The best “value investment” of all is channeling money into goals that will make your life more valuable: drawing out your innate gifts to make yourself matter to other people and to make the world around you a better place.
—Jason Zweig
Blessed is the investor who uses his wealth to do good for others.
Charles Collier writes, in his guidebook on philanthropy Wealth in Families, that “according to Aristotle and his latter-day student, Thomas Jefferson, the ‘pursuit of happiness’ has to do with an internal journey of learning to know ourselves and an external journey of service of others.”1
The meaning you give to wealth says a lot about you and the way you will be seen and remembered. That is why developing an environment of shared values with your family is so important. Devote time to introducing your will, sharing your values and feelings with those you love. This also may be an opportune time to ensure good things for others, after your death, by creating the appropriate provisions for future philanthropic activities in your formal will.
It may be your last opportunity to be heard and for your future wishes to be adhered to. Life is unpredictable.
On Maslow’s needs hierarchy, self-transcendence ranks even higher than self-actualization and refers to the highest and most inclusive or holistic level of human consciousness. Self-transcendence can be experienced when we move beyond ourselves to see a greater fulfillment linked directly with serving the needs of others.
Givers greatly enjoy seeing the wealth they have created during their working lives come to life again by enabling good things to happen during their lifetimes for targeted causes that carry significant meaning to them. As the adage goes, “You can’t take it with you.” Givers derive great happiness from converting their financial resources into actions and values they truly care about (figure 7.1).
FIGURE 7.1 Giving and happiness.
Source: Behavior Gap.
As a philanthropist, Warren Buffett is best known for giving billions of dollars to the Bill and Melinda Gates Foundation and for supporting the philanthropic work of his three children. He also generously gives to other groups, like the Glide Foundation, an antipoverty charity in San Francisco.
In philanthropy as in business, supporting the right people is more important than all other factors, according to Buffett: “When I buy businesses, it’s the same as investing in philanthropy. I’m looking for somebody who will get the job done and is in synch with my goals…. You can have the greatest goals in the world, but if you have the wrong people running it, it isn’t going to work. On the other hand, if you’ve got the right person running it, almost anything is possible.”2 Value for one’s money is as important in philanthropy as it is in investing.
Notable philanthropists who Buffett admires include Andrew Carnegie, Peter Kiewit, and John D. Rockefeller.
“The problem of our age,” Carnegie argued in an 1889 article in the North American Review, “is the proper administration of wealth.”3 The wealthy should use their riches to improve public facilities that would enable the deserving poor to help themselves, Carnegie said, because this kind of philanthropy is “best calculated to do…lasting good.” Carnegie rose from being a penniless immigrant to become the wealthiest man in the world at his time. His vision was to create “an ideal state in which the surplus wealth of the few will become, in the best sense, the property of the many.” After selling his steel empire for $500 million, Carnegie donated his wealth for the creation of schools, for a peace endowment, for New York’s Carnegie Hall, and for the acquisition and installation of 7,689 church organs. But it was his keen support for library construction that became the most visible manifestation of his philosophy. Carnegie’s philanthropy enabled the construction of 2,811 public libraries across the United States.
Kiewit grew his family’s business from the twelfth-largest contractor in Omaha to one of the largest and most respected in the entire United States. Before he died, Kiewit directed that his personal estate should be used to establish a foundation to support public-purpose projects in Nebraska and western Iowa. The Peter Kiewit Foundation opened its doors in 1979 with a $150 million endowment, representing more than 90 percent of the fortune earned by Kiewit during his lifetime. Upon Peter Kiewit’s death, Buffett shared his feelings: “Peter Kiewit made major deposits in society’s bank…but his withdrawals have been few.”4 Kiewit gave generously while he was alive and gave away the majority of his net worth upon his death.
Rockefeller’s charitable giving began with his first job, as a clerk, at age sixteen, when he gave 6 percent of his earnings to charity. By the time he was twenty, his charity exceeded 10 percent of his income. As Rockefeller’s wealth grew, so too did his giving, primarily to educational and public health causes, basic science, and the arts. (He was reportedly influenced by a meeting in 1893 with Swami Vivekananda, who enlightened him on the virtues of helping the needy.)
We all can take a big lesson from Rockefeller’s life. It is never too early to start giving and helping others. To make a difference in someone’s life, you don’t have to be brilliant, rich, or perfect. You just need to care. I did not want to deprive myself of the happiness from giving, so during my initial years in the United States, even when I was earning minimum wage as a front desk clerk at a hotel in San Francisco, I began donating to local charities, starting with small sums (as low as $10 in some cases when that was all I could afford at the time). It doesn’t matter where you are, or if you have a little to give or a lot to give, something happens to your heart when you share with others. Something that changes you for the better.
Love is doing small things with great love. It is not how much we do, but how much love we put in the doing. It is not how much we give, but how much love we put in the giving. To God there is nothing small.
—Mother Teresa
Over time, as my wealth has increased, so too have my charitable contributions, and it gives me great happiness to put a smile on the face of those who are less privileged. I was delighted when a dear friend and I jointly won the bidding auction in November 2018 for the annual charity lunch with Mohnish Pabrai, the entire proceeds of which would go to benefit the Dakshana Foundation. Writing about and sharing my life’s biggest learnings is my way of giving back to the investing community. Our goodwill compounds when we share with others. We should act as a funnel, not a sponge. As Charlie Munger so beautifully puts it, “The best thing a human being can do is to help another human being know more.” In life, the winners also lose occasionally, but those who help others win can never lose. So always help others rise. This is how goodwill compounds over time.
Karma Is Like a Big Snowball
You can’t live a perfect day without doing something for someone who will never be able to repay you.
—John Wooden
The most meaningful way to succeed is to help other people succeed.
—Adam Grant
Selflessly helping others in an unconditional manner, without expecting any favors in return, has great virtue. My sincere work ethic and helpful attitude toward my coworkers at my previous investment banking jobs encouraged them to share positive feedback about me when my current employer contacted them during the initial background checks conducted after my job interview. In addition, from time to time, my previous investment banking teammates generously helped me by imparting a solid understanding of the insurance and asset management industries in India from which many initial public offerings came during 2017 and 2018. This, in turn, helped me make better decisions about some of my existing holdings, which had a presence in insurance and asset management businesses.
How you behave in one place, will help in surprising ways later.
—Charlie Munger
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