For me, one of the hardest parts of personal finance is figuring out a balance between helping myself and improving the world. I want to do both, as do most people, but quite often those two options are in opposition to each other.
If I improve my personal situation or that of my immediate family, I’m devoting time and resources to them and not devoting it to things like charity or service to others. The reverse is also true – if I devote time and resources to charity and service to others, I’m generally not helping my own future or that of my immediate family.
I think I’ve figured out how to solve this problem, for me at least. Bear with me for a while.
For a long time, finding a balance of helping myself and my family versus helping others troubled me quite a bit. Part of the reason I started Money360, for example, was trying to navigate this problem. I was seeking a way in which I was obviously helping other people (the content on Money360, which helps people navigate the knot of their own personal finances) while also improving my personal situation and that of my family (the advertisements on Money360). It was a balance that I didn’t really see in my previous job – I felt like I was really stretching to feel like I was helping anyone other than myself with the work I was doing. (The thing to remember is that Money360 was a hobby at first, with the ads initially put in place just to pay for the cost of hosting the site; I didn’t anticipate how successful it would be.)
In the last few years, though, I’ve started looking at this problem a little differently, and I recently found a brilliant explanation of this new direction in (just watch, this video explains it simply and beautifully):
The core argument of this video is that in the modern world, acting in a way that makes the world a better place almost always has a net benefit for you and your descendants. You can really apply “the world” however you’d like – it can refer to other people in your community, people you interact with online, or people who use the things you make that you might never directly interact with at all.
The video makes the point that, in humankind’s past, we mostly existed in small communities that utilized the land around them for food without any real innovation for tens of thousands of years. The limitation on the size of that community was the amount of land you controlled, so it made sense to be kind and charitable within your community and warlike and unkind to people in other communities. This is why you’d go help your neighbor put up a new barn (because that kind of shared work was far more efficient than trying to build a barn alone, and that neighbor was likely to help you when you wanted to build a new barn), but you wouldn’t be helpful at all to an outsider to the community (outside of very careful trading).
Over time, this changed, particularly in the last few hundred years. Now, the valuable commodity is knowledge and technology, and it’s almost always worthwhile to exchange those things with each other because it allows both of us to get more value out of what we have. The gasoline powered engine, for example, made it much easier to grow food and to transport goods everywhere, and we’re far better off sharing and trading the idea of a gasoline powered engine because it makes it cheaper for people elsewhere to transport goods to us. We all benefit without any real cost. Think of all of the huge technological leaps of the last 150 years that made daily lives easier – electricity, internal combustion engines, construction equipment, automobiles, planes, radio, television, the internet, phones, cell phones, and so on. Those kinds of things make the pie bigger – it makes every one of us more efficient in the things that we do and thus able to produce more for our time and effort, which helps literally everyone else.
In other words, in the distant past, being kind to others outside of our tight immediate family and community didn’t have much of a real benefit for you because there was no way to make the overall pie bigger. The only way to ensure your future and the future of your family was to grab a bigger piece of the pie for yourself. Today, most of the ways we interact with others offer the ability to make the overall pie bigger, and when you do that, you make your own portion of the pie bigger, too.
What this all means in the end is that any time I take an action that benefits someone besides myself, regardless if it’s my next door neighbor or someone halfway around the world, it eventually helps out me or my descendants because it makes the overall pie bigger. It is no different than the reason that communities got together for barn raisings in older times, except that because of the ease of exchange of information, that community is now the world.
So, where does all of this lead in terms of what we can actually do to improve our own situation? I’ve come to a few conclusions out of all of this.
Be Kind – Engage in Low Effort, High Return Behavior
One of the most valuable principles that all of this points to is that when you have opportunities to put forth a small amount of effort for a big benefit for someone else, you should virtually always do it, almost instinctively.
For example, it costs you virtually nothing to be kind to someone else, to speak positively to them, to raise them up a little, but it can make a huge positive impact on that person. That person then goes off in their life and is likely to be more productive and more kind to others that they meet, and eventually that will bounce around back to you in some indirect way. So, simply be kind to others when it’s almost entirely cost free to you. It doesn’t matter who the other person is, because the community is now global because of the value of exchanging information. Doing this costs you nothing in terms of the size of your slice of the pie and slightly grows the size of the overall pie, which means that you slightly benefit, too.
Even more than this, jump on board with low effort things that offer a high return for others. Talk to the new person who looks nervous and you’ll lift their spirits and likely build a new positive relationship. Help an acquaintance get their foot in the door for a job interview. Help the guy across the street load his couch into the truck. Answer someone’s question kindly and honestly rather than sarcastically and you improve their knowledge and faith in other people.
In each of those cases, you send those people out in the world with a more positive perspective and much more willing to help others when the time comes. They’re also much more likely to help you in the moment – not that it’s a guarantee that they will, but that it’s much more likely.
Spend Free Time and Energy on Things That Benefit Others
For a long time, I served on the executive council of a local charity. The work itself was drudgery – most of it was looking at expense reports and planning budgets.
When I step back and look at the big picture, though, I can see how valuable that time was, not just for me, but for the broader community.
The charity I helped manage directly helped people. Among other things, it provided food and clothing for disadvantaged people in the local community. Those things directly benefited families that I know and a lot of families that I don’t happen to know but are still a part of my local community. There are a lot of kids who went to school with full bellies and with school supplies in their backpacks and well-fitting clothes on their bodies because of the group I worked for. There were families that were able to have nutritional family dinners together thanks to the organization. People’s lives in our community were made better, and those better lives made life better for everyone around them, and so on and so forth. That eventually reflected back on me.
I built a ton of good relationships with people. My time in this organization helped me build several very strong relationships with people in the community and at least a couple of dozen very positive acquaintances. The closer relationships have brought several very positive impacts directly into my life – socializing, help in challenging situations, relaying of information that’s actually been valuable to us, and so on. The acquaintances have been valuable, too – a positive face or two at almost every social gathering in my community, for starters, but lots of other little benefits as well.
So, what does this mean for you? Consider volunteering a portion of your spare time to help a local charity. Look for something you can do in your local community that taps into some skill that you naturally have, whether it’s patience or communication skills or willingness to evaluate budgets. As you do this, use the opportunity to build relationships with others who are working for that same cause and remind yourself that the effort you’re putting forth raises the tide in your community and that a rising tide lifts all boats.
Such efforts usually cost you nothing financially, but they do reward you with strong relationships and a better community to live in. A community with thriving and healthy charities and public services tends to be safer and more pleasant to live in for everyone, which tends to attract more residents and . So, help out in your community a little with your spare time and you’ll gain far more than you expect.
Helping People You’ll Never Know
While it’s easy to see how helping people in your own community is beneficial, it can be hard to see how your efforts toward people you don’t even know can be of benefit to you.
From my perspective, the value in “zooming out” to include the problems of everyone is that there are a lot more problems to solve, many of which benefit you greatly in the process of solving them.
Take Money360, for example. Virtually every article I write for Money360 helps me in the process of writing it (beyond the income-related factors). I get to think about the challenges of personal finance in my own life and then figure out how to translate what I’ve found into something that’s readable and useful (which actually helps me understand it far better). I end up with better ideas on how to manage my own finances and better communication skills, both of which help me in whatever career path I might venture into in the future.
In other words, when you look at things on a broader scale, you can find problems that need solving and questions that need answering that help you greatly in the process of solving the problem and answering the question effectively. You can find problems and questions that line up very well with the skills you already have. Naturally, you’re also helping others along the way, but there is real, tangible benefit for yourself if for nothing else than it builds up your ability to solve problems and communicate clearly.
No matter your area of expertise, you can find ways to help others online in that area. Just seek out well-moderated places where people who share your interests and skills congregate and look for ways to answer questions and help others.
How does this help you? One, thinking about how to solve a problem or answer a question helps refine your own skill set both in terms of the subject matter and your ability to communicate. Two, answering the question or solving the problem not only helps out the person asking the question, but it helps anyone who might read it going forward. Three, you’re establishing a reputation which will encourage many others to answer your questions later when you have them.
So, seek out opportunities online where you can share your knowledge and skills and participate in those communities in a positive way. Answer questions and help solve problems in a positive way, and then when you need questions answered or problems solved or require some kind of help, you’ll have a place to ask for that help, which can be both a personal and a professional boon. You’ll also build up your own understanding and your own communication skills as you help.
Speaking of reputation…
Hidden Ripple Effects of Reputation
All of these things collectively offer an additional benefit in the form of building your positive reputation. A positive reputation is a valuable thing, as it often opens doors for you and creates opportunities for you, both in ways that you can directly see and ways that you can’t.
Most of the jobs I’ve had in my life were offered to me or built up by the establishment of positive reputation. I built a great reputation with some of my earliest mentors and that reputation was quietly used to open my first real career door, when I was in college. My reliability and effort opened more doors for me later on, helping me to get my first post-college job because my reputation preceded me (even though I didn’t really see it at the time), and it also led into my next job after that.
Reputation helped me build quick relationships. Reputation helped me to have my voice heard when I wanted to speak out. Reputation has made people listen and respond when I’ve asked for help.
The thing is, when you do the things mentioned above – helping people without expecting help in return, being kind and pleasant and positive in public, constantly giving of yourself particularly when the benefits for others are far bigger than the cost for you – you build a positive reputation for yourself, one that often precedes you, and one that opens doors for you even if you don’t see it.
Practicing altruism and kindness builds reputation, and reputation is valuable. It will help with your career. It will help you in moments of crisis. It will help you with friendships and relationships.
A Rising Tide Lifts All Boats
As we wind down, I want to circle back to one key part of the benefits of altruism: a rising tide lifts all boats.
Let’s say you invest your time and effort into these things. You consciously choose to be kind and helpful. You regularly talk to that new person. You help people out all the time. You stay positive and friendly almost all of the time. You constantly help people out. And you’re rewarded for those efforts, as described above.
Still, there’s another big benefit that you often don’t see because it’s practically invisible: the rising tide.
When you make things better for other people, they tend to go on to do better things than they otherwise would have. When you’re kind to someone, they’re more likely to be kind to someone else, and that person is more likely to be kind to someone else, and so on. When you help someone, they’re more likely to help someone else, and so on. None of these are guarantees, of course, but your effort is raising the odds just a little.
Over time, with enough events, you’ve definitely become the source of a lot of positive events throughout the community and the world. At some point, you’ve likely altered the path of a few people in a significant way, but in a way that’s completely invisible to you. You helped someone with a little effort at just the right moment and that really changed their path, not just making their day a little better.
Those better paths make your world better – they make everyone’s world better. Someone ends up going to school in part because of a little impact you have, and that person ends up being part of a big discovery or helps a business develop and distribute a great product or learns how to better manage a crisis center. Someone reflects on a kind word you said and uses that as part of a spark to turn their life around and they become a better parent, lifting a child from a mediocre outcome to a pretty good outcome, and that person ends up really being a positive force in the community when you’re older.
The vast, vast majority of kind things you do won’t have that kind of tide-raising effect, the kind of effect that benefits you and everyone else, but a few of them will, and you’ll never know which ones. Never forget the rising tide when you do something helpful or altruistic.
Making the Lives of Others Better Is Reason Enough, But the Extra Benefits Are Great, Too
Throughout this article, I’ve extolled a ton of the value in being kind, being altruistic, and helping others without seeing an immediate benefit for yourself. You build positive relationships. You build skills. You build reputation. You make the community better as a whole.
The thing is, there really doesn’t need to be a benefit for being kind or altruistic – helping others is a reward unto itself. Simply making things better for someone else going through this up-and-down journey we call life has value… but, unfortunately, it’s not always enough value, which is why it can be useful to point out the many real and tangible benefits to being altruistic.
The reality is that there are a huge number of benefits to simply being kind and helpful as often as possible, and given that the modern world is one that is constantly growing in terms of opportunity and efficiency, many of those benefits literally help everyone involved. The benefits go to the person you helped, sure, but they also spread out to people you’ll never see, and some of those benefits come right back to you. When we work together, we all get more efficient.
Yes, there are always going to be people who do accept your help and kindness and offer nothing in return, but the relatively small amount that you lose in such situations is small compared to what you gain from the vast majority of people out there who are lifted up by the helpfulness of others and will act accordingly.
In short, be kind. Be helpful. Treat others as you would ideally like to be treated. Not only is it the right way to act in the world, the principle of egoistic altruism reveals a ton of personal, professional, and financial benefit for doing so as much as possible.