Not-only-for-profit

Not-only-for-profit

Not all businesspeople are greedy. We’ve heard the Bernie Madoff investment stories, heard about banks that lend to unqualified candidates, and have seen the get-rich-quick promises on late night TV. It’s easy to quickly classify all businesspeople or for-profit companies as greedy. And I agree, greed is typically a short-sighted model for taking advantage of others.

But on the other side of greed is the fear of money. Too many people shun the idea of making money as evil and believe good can only be done by non-profits. These individuals then spend 80% of their precious time begging for money in lieu of working on the cause about which they are passionate. Don’t get caught in the delusion that being destitute is a necessary situation for helping the world. In fact, it will cripple your ability to do so. Money is like fire – it can burn you and leave you disfigured, or it can keep you warm and safe.

Since Adam Smith, economists have understood that “self-love” leads to quality products and social benefits. If a baker makes wonderful bread, he/she brings nutrition and pleasure to the community as well as financial rewards for himself and his family. It is not his “benevolence” but self-interest that provides the most benefits for everyone involved. And there can be true authentic “benevolence” as well.

Good intentions and a pure and giving heart are not enough. Economic accountability is a good thing. If an organization’s efforts are secured by God, the government or the heartstrings of generous individuals, it can be run inefficiently with little measurement of accomplishment. The businessman has no such cushion. Either something of value and fair exchange is produced and delivered or the business will not survive. In that sense, the business model requires more honesty and transparency than the non-profit.

I love running a business. I love not being handcuffed by a publicly traded board of directors or by the required board for a non-profit organization. We can make decisions quickly about giving and blessing – and about sound financial opportunities. I am deeply grateful and feel privileged to be able to have a “not-only-for-profit” company.

How would you categorize your work or business?

Where can I check my credit history?

Where can I check my credit history?

Credit bureaus such as CIBIL or the recently set up Equifax India capture credit information that their member firms share with them on your past loan transactions. For the payment of a small fee you can also access your report from these bureaus and see what kind of a credit score are they assigning to you.

If you wish to dispute a particular instance in your history that has been incorrectly reported, you can approach the specific lender with whom the transaction in question was conducted, and request them to rectify your record with the credit bureau. The authors are co-founders of iTrust.in, a leading financial advisory business.

First Time Borrower????????

What if I am a first-time borrower? Many of us might have never taken a loan in the past, and so don’t have a credit history. Does this hurt us because a credit bureau has no prior information on us?

The short answer is no. However, it might be worth your while to start building a track record for any future loan applications you might make. Even if they are small transactions you conduct using a credit card, as long as you pay your card dues back in time and in full, you will find that this will help build your credit history on how disciplined you are in dealing with paying back your loans.

How does my credit history impact me?

How does my credit history impact me?

Those borrowers, who have a good history of paying back their dues on time and in full, can benefit in two ways.
First, they will find that their loans are processed faster and can be disbursed faster because the lender might have lesser doubts or concerns on such borrowers.

Second, those with a good credit history will be seen as lower risk. They will find that they can get loans on better terms, especially slightly cheaper interest rates. Those who have historically had a bad record of managing their loans and repayments will find that their past behaviour can adversely affect their ability to get loans in the future.
Let us take the case of a young 25-year-old man who takes a personal loan for Rs 10,000. This person has a rather casual attitude towards paying the loan back. In fact, he moved to a different city with a new job and then decided not to pay his dues because he felt it would be hard for the lender to track him down in his new job and city. However, a credit bureau can centrally track this person’s credit behaviour and can share this negative information with lenders across India who might be considering this person for a loan in the future.

For instance, as this person grows older and needs to apply for a more important loan like say a Rs 4 lakh car loan, or a Rs 15 lakh home loan, he might find that lenders are not willing to consider his application, or will only consider it on terms that are very harsh. All this because he lacked the discipline to pay back the relatively small amount of Rs 10,000.

It is worth noting that an individual’s credit history can be interpreted differently by different lenders, depending on their own criteria and their internal risk management policies. So while one lender can reject an application looking at your credit history because they don’t want to take the risk of lending to you, it is quite possible that another lender might be comfortable lending to you. It is all a matter of interpretation of your factual data that comprises your credit history.

Changing landscape of the credit industry

Changing landscape of the credit industry

For the economy to function smoothly, it is important that consumers have access to credit. However, borrowers must pay their EMIs on time as well as ultimately pay back their loan on time. Otherwise, the entire consumer economy could collapse. In India, most of us take a loan to buy a car, buy a home or to purchase consumer items such as refrigerators, television or to enjoy a foreign vacation. As things stand, all borrowers generally pay the same interest rate irrespective of whether we have a good track record or not. This is about to change. Two dynamics are at play that will affect our ability to get loans and the interest that we pay on them.

First, starting July 1, according to RBI guidelines, banks will price their loans using a Base Rate. To this Base Rate they will add a risk premium which will be specific to the kind of risk that the bank perceives you to carry, based on your creditworthiness. Your classmate from school with a bad reputation for borrowing money will most likely be charged a higher risk premium because of his/her ‘tainted’ history.

Secondly, banks are increasingly accessing your ‘credit history’ or your past records if you have taken loans and analysing how disciplined you have been to pay them back on time and in full. Specialised institutions called credit bureaus have been authorised by the RBI to be set up to be a repository of factual data on your track record of your timeliness in paying your loans including credit card borrowings, history of your cheque bounces and the number of applications you make to access credit (whether through credit cards, personal loans or other types of loans). Lenders can access reports available from these bureaus and on the basis of this interpret your track record to decide whether they want to lend to you or not and on what terms.

Borrow if you must, but have a clean credit score

Do you remember your classmate from your schooldays who would always take money from other classmates and then never pay back? What would be his/her reputation? And would you feel comfortable lending money to him/her?

People like this classmate would find it virtually impossible to get a loan for buying a car or a home. There is now a well-organised and institutional way to track the repayment record or credit behaviour of both good and bad borrowers.

Your credit history is accessible to lenders and can affect whether you get a loan on more favourable or more difficult terms, or if you can get a loan at all. Here we share with you details of the changes sweeping the credit landscape in India, why they are important for you and how you can benefit from this.

Changing landscape of the credit industry

For the economy to function smoothly, it is important that consumers have access to credit. However, borrowers must pay their EMIs on time as well as ultimately pay back their loan on time. Otherwise, the entire consumer economy could collapse. In India, most of us take a loan to buy a car, buy a home or to purchase consumer items such as refrigerators, television or to enjoy a foreign vacation. As things stand, all borrowers generally pay the same interest rate irrespective of whether we have a good track record or not. This is about to change. Two dynamics are at play that will affect our ability to get loans and the interest that we pay on them.

First, starting July 1, according to RBI guidelines, banks will price their loans using a Base Rate. To this Base Rate they will add a risk premium which will be specific to the kind of risk that the bank perceives you to carry, based on your creditworthiness. Your classmate from school with a bad reputation for borrowing money will most likely be charged a higher risk premium because of his/her ‘tainted’ history.

Secondly, banks are increasingly accessing your ‘credit history’ or your past records if you have taken loans and analysing how disciplined you have been to pay them back on time and in full. Specialised institutions called credit bureaus have been authorised by the RBI to be set up to be a repository of factual data on your track record of your timeliness in paying your loans including credit card borrowings, history of your cheque bounces and the number of applications you make to access credit (whether through credit cards, personal loans or other types of loans). Lenders can access reports available from these bureaus and on the basis of this interpret your track record to decide whether they want to lend to you or not and on what terms.

How does my credit history impact me?

Those borrowers, who have a good history of paying back their dues on time and in full, can benefit in two ways.
First, they will find that their loans are processed faster and can be disbursed faster because the lender might have lesser doubts or concerns on such borrowers.

Second, those with a good credit history will be seen as lower risk. They will find that they can get loans on better terms, especially slightly cheaper interest rates. Those who have historically had a bad record of managing their loans and repayments will find that their past behaviour can adversely affect their ability to get loans in the future.
Let us take the case of a young 25-year-old man who takes a personal loan for Rs 10,000. This person has a rather casual attitude towards paying the loan back. In fact, he moved to a different city with a new job and then decided not to pay his dues because he felt it would be hard for the lender to track him down in his new job and city. However, a credit bureau can centrally track this person’s credit behaviour and can share this negative information with lenders across India who might be considering this person for a loan in the future.

For instance, as this person grows older and needs to apply for a more important loan like say a Rs 4 lakh car loan, or a Rs 15 lakh home loan, he might find that lenders are not willing to consider his application, or will only consider it on terms that are very harsh. All this because he lacked the discipline to pay back the relatively small amount of Rs 10,000.

It is worth noting that an individual’s credit history can be interpreted differently by different lenders, depending on their own criteria and their internal risk management policies. So while one lender can reject an application looking at your credit history because they don’t want to take the risk of lending to you, it is quite possible that another lender might be comfortable lending to you. It is all a matter of interpretation of your factual data that comprises your credit history.

What if I am a first-time borrower? Many of us might have never taken a loan in the past, and so don’t have a credit history. Does this hurt us because a credit bureau has no prior information on us?

The short answer is no. However, it might be worth your while to start building a track record for any future loan applications you might make. Even if they are small transactions you conduct using a credit card, as long as you pay your card dues back in time and in full, you will find that this will help build your credit history on how disciplined you are in dealing with paying back your loans.

Where can I check my credit history?

Credit bureaus such as CIBIL or the recently set up Equifax India capture credit information that their member firms share with them on your past loan transactions. For the payment of a small fee you can also access your report from these bureaus and see what kind of a credit score are they assigning to you.

If you wish to dispute a particular instance in your history that has been incorrectly reported, you can approach the specific lender with whom the transaction in question was conducted, and request them to rectify your record with the credit bureau. The authors are co-founders of iTrust.in, a leading financial advisory business.

Got A Retirement Accountability Partner?

Got A Retirement Accountability Partner?

Choosing a wise confidant can help you reach your goals quicker.

The Tip:

Saving for retirement can be challenging. Make sure you have an accountability partner that is encouraging and gives smart advice.

If you make it to the gym often, you've probably seen "those guys." They're always lifting weights, taking turns spotting, and encouraging each other—loudly. But those guys are so pumped up about helping each other succeed, they don't care about volume.

That's what's called an accountability partner, and it doesn't just apply to the gym. A good accountability partner can help you save for retirement as well. Sound weird? Think about it. Those guys at the gym:

• Schedule regular workout times
• Have goals and a plan to reach them
• Push each other to work harder than they would on their own
• Help each other overcome challenges or set-backs
• Won't accept weak excuses for skipping a workout

Help for the Long Haul

Saving for retirement Dave's way means you'll be investing consistently over the long-term. Committing 15% of your income to retirement for 20 or 30 years will be tough to do on your own. An accountability partner will hold you to your commitment. And, when a turbulent market makes you uneasy, he or she will be there to encourage you to stick to it.

Imagine you've been investing steadily for a few years, and you've built up a substantial amount. Then you get a promotion and a raise. You're thinking you could use that extra income to buy a bigger house—after all, you want to reward your family for sticking with you in the difficult times, right?

At your next meeting, you tell your accountability partner about the new house you're thinking about buying. He's excited for you, but he doesn't let you get carried away before suggesting you review your goals and make sure a new house fits into your plan. Your accountability partner sounds a lot like Dave.

By working together and learning from each other, you'll both be more likely to stick to your plans and reach your goals.

Choosing an Accountability Partner

Ideally, your accountability partner will have experience in investing. An investing professional is a great choice for a retirement accountability partner because:

• You can trust them with your financial information.
• They will understand your retirement goals and appreciate your commitment to reach them.
• They will be willing to take the time to track and discuss your progress.
• They won't accept any flimsy excuses for backing down from your commitment to reach your retirement goals.
• Source Dave Ramsey Newsletters
  

What is the tax impact of passive income?

What is the tax impact of passive income?

If you hold the investment for more than 12 months then long-term capital gains tax rates will be applicable. Similarly, for property the holding period that determines a short or long-term capital gain is whether you have owned the asset for more or less than 3 years.

The tax rates for capital gains vary by the type of investment in question. Sometimes you might also be able to use losses from your investments to offset your taxes from other sources of income.

Whatever be the source of your passive income, you will need to declare it in your annual tax return, and pay taxes on it according to the existing tax rates and rules.

What is the tax impact of passive income?

What is the tax impact of passive income?

Like your salary income, any passive income that you generate will also create a tax liability for you. Depending upon the source of the income there might be different tax treatment applied. For instance, dividends from equity instruments such as stocks or equity mutual funds are tax free in the hands of the investor.

However, dividends distributed by a debt or a liquid fund will be subject to a dividend distribution tax paid out by the fund.

Further, the tax treatment also depends upon the time duration that you hold an asset or an investment. If you make a gain on a capital market investment, but hold it for less than 12 months, short-term capital gains tax rules will apply.

When can I start earning passive income?

When can I start earning passive income?

The choice whether to invest or not is of course yours, but please bear in mind the tradeoff in the long term - you can either consume today, or save up to consume for later.

If, however, you are in your middle age, you might not be left with much of a choice and your key goal should be to use as much of your income as possible from your remaining peak earning years to create a source of passive income, which is often the only source of funds for most people during retirement.

When can I start earning passive income?

When can I start earning passive income?

You can start as early as today! All you need is a regular source of salary income and the discipline of setting aside a part of this salary, even if it is a small amount, towards investment purposes before you start spending your money on your lifestyle or your living costs.

This of course might not always be easy, and depends upon the state of your personal finances and your family situation.

Also, if you are just starting out your career, you might not have the flexibility to invest immediately. To add to these is the peer pressure to spend money on items of conspicuous consumption like the latest mobile phone or a cutting edge flat screen LCD TV.

What is passive income?

What is passive income?

The salary you get from work is a direct result of your efforts at work, during your active working life. Passive income, on the other hand, is income that you can generate without having to directly work for it.

For instance, if you invest a part of your salary into instruments that will earn income for you without you spending any time on it, you can create passive sources of investment income for yourself. Apart from the act of investment, you are not directly doing any active work to generate investment income.

In effect, your money works for you to earn more money for no incremental effort on your part. Over time, if you have invested smartly, you can have enough money through these passive sources to make a down payment on an apartment or buy that dream car.

Even if you start small, the idea is that you should start creating passive income for your self. Through the sheer power of compounding of capital, small savings today can grow into a large amount within just a short period of 4-5 years.

How to Generate passive income to meet financial goals???

How to Generate passive income to meet financial goals???

Ever wondered how your colleague at work, who earns the same salary as you, has bought a BMW while you are still driving your five-year-old Honda City? Chances are your colleague has utilised his or her existing salary smartly to generate passive sources of income, on the back of which the car has been bought.

By generating passive income you can achieve financial freedom and flexibility through the creation of alternative sources of income that can complement your salary income.

People rarely achieve their financial goals and dreams only on the back of their salaries. One needs alternative sources of income that can increase one’s wealth and consumption capabilities. Here we share with you some tips on how to generate passive income.

What is passive income?

The salary you get from work is a direct result of your efforts at work, during your active working life. Passive income, on the other hand, is income that you can generate without having to directly work for it.

For instance, if you invest a part of your salary into instruments that will earn income for you without you spending any time on it, you can create passive sources of investment income for yourself. Apart from the act of investment, you are not directly doing any active work to generate investment income.

In effect, your money works for you to earn more money for no incremental effort on your part. Over time, if you have invested smartly, you can have enough money through these passive sources to make a down payment on an apartment or buy that dream car.

Even if you start small, the idea is that you should start creating passive income for your self. Through the sheer power of compounding of capital, small savings today can grow into a large amount within just a short period of 4-5 years.

When can I start earning passive income?

You can start as early as today! All you need is a regular source of salary income and the discipline of setting aside a part of this salary, even if it is a small amount, towards investment purposes before you start spending your money on your lifestyle or your living costs.

This of course might not always be easy, and depends upon the state of your personal finances and your family situation.

Also, if you are just starting out your career, you might not have the flexibility to invest immediately. To add to these is the peer pressure to spend money on items of conspicuous consumption like the latest mobile phone or a cutting edge flat screen LCD TV.

When can I start earning passive income?

The choice whether to invest or not is of course yours, but please bear in mind the tradeoff in the long term - you can either consume today, or save up to consume for later.

If, however, you are in your middle age, you might not be left with much of a choice and your key goal should be to use as much of your income as possible from your remaining peak earning years to create a source of passive income, which is often the only source of funds for most people during retirement.

What is the tax impact of passive income?

Like your salary income, any passive income that you generate will also create a tax liability for you. Depending upon the source of the income there might be different tax treatment applied. For instance, dividends from equity instruments such as stocks or equity mutual funds are tax free in the hands of the investor.

However, dividends distributed by a debt or a liquid fund will be subject to a dividend distribution tax paid out by the fund.

Further, the tax treatment also depends upon the time duration that you hold an asset or an investment. If you make a gain on a capital market investment, but hold it for less than 12 months, short-term capital gains tax rules will apply.

What is the tax impact of passive income?

If you hold the investment for more than 12 months then long-term capital gains tax rates will be applicable. Similarly, for property the holding period that determines a short or long-term capital gain is whether you have owned the asset for more or less than 3 years.

The tax rates for capital gains vary by the type of investment in question. Sometimes you might also be able to use losses from your investments to offset your taxes from other sources of income.

Whatever be the source of your passive income, you will need to declare it in your annual tax return, and pay taxes on it according to the existing tax rates and rules.

How to Plan early to fund your child’s education

How to Plan early to fund your child’s education

* Child education
* INVESTMENT PLANNING

Summer time is college admission season in India. So, it’s timely to think about financial planning for college and related expenses.

Whether you are preparing to fund your child’s college expenses that start as early as next week, or are wondering about how you will fund your child’s college education a few years from now, whether in India or abroad, the following is a simple guide to how to go about financing your child’s education.

To start with, recognise that it’s not just tuition fees that matter. There might also be boarding and lodging fees, and there will definitely be incidentals such as transport, daily expenses on food and snacks, and clothing costs.

You could either be faced with a crunch situation today where these expenses need to be provided for immediately, or you have some time to plan for all of the above expenses.

Education loans

If you need funds immediately, taking an education loan might be your best option. Any Indian national between the ages of 16 and 35, who has secured admission to one of the eligible courses and institutions, can apply for an educational loan.

If you need funds for a full-time course, you will likely need a co-applicant, who can be your parents, spouse, sibling or relatives. Your loan eligibility is calculated on the basis of your co-applicant’s income. Part-time courses might not require a co-applicant, but you can improve your loan eligibility by including a co-applicant. Also, some banks might require a guarantor for the loan.

Lenders exercise some discretion regarding which courses and institutions are eligible for loans. They take into consideration your earnings and income potential after the course.

Your chosen course can be full-time or part-time, undergraduate or post-graduate, degree or diploma, at a government or private institution within India or abroad. You should check with your lender if your course is eligible for a loan or not.

If your course is in India, you can get a loan up to Rs 10 lakh. If the course is abroad, you can get up to Rs 20 lakh. In both cases the loan is disbursed to your chosen education institution directly.

Lenders will usually expect you to fund 5-15% of the education cost, but in some cases can offer you 100% of the entire cost of education. The interest rate charged on these loans can range from 10% to 12%, and in most cases PSU banks offer a better rate than private sector banks.

For loans above Rs 4 lakh, you might be expected to put up some tangible security as collateral. Usually, you will get a period of one year from the completion of the course or six months after being employed, whichever is earlier, after which you are expected to start repaying your loan. The industry standard is a repayment period of up to five to seven years.

Stay way from taking a personal loan towards education purposes as personal loans are typically more expensive. Additionally, education loans are eligible for a tax deduction under Section 80E on the interest paid on loans taken for higher education for yourself, your spouse and children.

There is no limit on the amount of deduction you can claim. The only thing to keep in mind is that the course for which the loan is taken should be a graduate or post-graduate programme in engineering, medicine or management or a post-graduate course in the pure or applied sciences. Please check with your accountant for your eligibility.

Long-term funding

If your need for funding education is not immediate but a few years away, you must plan accordingly so that you can build a substantial pool of capital towards funding your child’s education goal.

Please recognise that whatever strategy you choose towards creating capital must take into account that tuition fee inflation is running at between 10% and 15% for most decent colleges/universities. Whichever of the following you choose, its best to start early so that you can take advantage of compounding of capital to offset the impact of rising education costs.

Child Ulips: These are insurance policy cum investment plans. Under these plans, a parent can buy a policy where the child is a beneficiary, but the parent is the life assured, i.e., the person who’s life is being insured such that if anything happens to this person the child will get some monetary compensation.

Child Ulips should be bought for the long-term. Many parents buy such policies when their kids are still 5-7 years, even though the college education date might be a decade away. If something happens to you during the course of the policy, the insurance company will continue to pay the premium towards the policy on your behalf, on top of giving the survivors the sum assured under the policy. Additionally, when your child is ready for college (or at a maturity date you pre-determine at the time of taking the policy), the insurer will pay you a sum (the fund value) that can be used towards funding the child’s education.

Stocks & MFs: Long-term investing in the equity capital markets is a very practical way to fund an education goal. Whether you buy stocks directly, or invest through a systematic investment plan into equity mutual funds, both allow you to take advantage of the superior returns that equities are expected to offer in the long-term over other asset classes that the common investor can invest in.

If your child will be ready to go to college in say a decade or more, then putting aside some money towards equities or equity mutual funds is a smart way of taking advantage of compounding of capital such that in a decade you have a substantial pool of capital to fund your child’s college expenses.

Property: If you have surplus funds today, you might also choose to buy a property for investment purposes from which you can generate rental income. This rental income can be invested to build a corpus of funds to be used later for education expenses. Alternatively, this rental income itself can be used to pay college related costs.

Whatever strategy you choose to employ, recognise that with a little bit of planning you can help your child achieve the best possible outcome towards his/her education. Our society places a great premium on top quality education. Don’t compromise on kids’ education just because you didn’t have the foresight to plan their education goals.

Source

There Is A Science of Getting Rich

THERE IS A SCIENCE OF GETTING RICH, and it is an exact science, like algebra or arithmetic. There are certain laws which govern the process of acquiring riches, and once these laws are learned and obeyed by anyone, that person will get rich with mathematical certainty.
The ownership of money and property comes as a result of doing things in a certain way, and those who do things in this certain way — whether on purpose or accidentally — get rich, while those who do not do things in this certain way — no matter how hard they work or how able they are — remain poor.
It is a natural law that like causes always produce like effects, and, therefore, any man or woman who learns to do things in this certain way will infallibly get rich.
That the above statement is true is shown by the following facts:
Getting rich is not a matter of environment, for if it were, all the people in certain neighborhoods would become wealthy. The people of one city would all be rich, while those of other towns would all be poor, or all the inhabitants of one state would roll in wealth, while those of an adjoining state would be in poverty.
But everywhere we see rich and poor living side by side, in the same environment, and often engaged in the same vocations. When two people are in the same locality and in the same business, and one gets rich while the other remains poor, it shows that getting rich is not primarily a matter of environment. Some environments may be more favorable than others, but when two people in the same business are in the same neighborhood and one gets rich while the other fails, it indicates that getting rich is the result of doing things in a certain way.
And further, the ability to do things in this certain way is not due solely to the possession of talent, for many people who have great talent remain poor, while others who have very little talent get rich.
Studying the people who have gotten rich, we find that they are an average lot in all respects, having no greater talents and abilities than other people have. It is evident that they do not get rich because they possess talents and abilities that others do not have, but because they happen to do things in a certain way.
Getting rich is not the result of saving, or thrift. Many very penurious people are poor, while free spenders often get rich.
Nor is getting rich due to doing things which others fail to do, for two people in the same business often do almost exactly the same things, and one gets rich while the other remains poor or becomes bankrupt.
From all these things, we must come to the conclusion that getting rich is the result of doing things in a certain way.
If getting rich is the result of doing things in a certain way, and if like causes always produce like effects, then any man or woman who can do things in that way can become rich, and the whole matter is brought within the domain of exact science.

The Right To Be Rich

The Right To Be Rich

WHATEVER MAY BE SAID IN PRAISE OF POVERTY, the fact remains that it is not possible to live a really complete or successful life unless one is rich. No one can rise to his greatest possible height in talent or soul development unless he has plenty of money, for to unfold the soul and to de-velop talent he must have many things to use, and he cannot have these things unless he has money to buy them with.

A person develops in mind, soul, and body by making use of things, and society is so organized that man must have money in order to become the possessor of things. Therefore, the basis of all advancement must be the science of getting rich.

The object of all life is development, and everything that lives has an inalienable right to all the development it is capable of attaining.

A person’s right to life means his right to have the free and unrestricted use of all the things which may be necessary to his fullest mental, spiritual, and physical unfoldment; or, in other words, his right to be rich.

In this book, I shall not speak of riches in a figurative way. To be really rich does not mean to be satisfied or contented with a little. No one ought to be satisfied with a little if he is capable of using and enjoying more. The purpose of nature is the advancement and unfoldment of life, and everyone should have all that can contribute to the power, elegance, beauty, and richness of life. To be content with less is sinful.

The person who owns all he wants for the living of all the life he is capable of living is rich, and no person who has not plenty of money can have all he wants. Life has advanced so far and become so complex that even the most ordinary man or woman requires a great amount of wealth in order to live in a manner that even approaches completeness. Every person naturally wants to become all that they are capable of becoming. This desire to realize innate possibilities is inherent in human nature; we cannot help wanting to be all that we can be. Success in life is becoming what you want to be. You can become what you want to be only by making use of things, and you can have the free use of things only as you become rich enough to buy them. To understand the science of getting rich is therefore the most essential of all knowledge.

There is nothing wrong in wanting to get rich. The desire for riches is really the desire for a richer, fuller, and more abundant life — and that desire is praiseworthy. The person who does not desire to live more abundantly is abnormal, and so the person who does not desire to have money enough to buy all he wants is abnormal.

There are three motives for which we live: We live for the body, we live for the mind, we live for the soul. No one of these is better or holier than the other; all are alike desirable, and no one of the three — body, mind, or soul — can live fully if either of the others is cut short of full life and expression. It is not right or noble to live only for the soul and deny mind or body, and it is wrong to live for the intellect and deny body or soul.

We are all acquainted with the loathsome consequences of living for the body and denying both mind and soul, and we see that real life means the complete expression of all that a person can give forth through body, mind, and soul. Whatever he can say, no one can be really happy or satisfied unless his body is living fully in its every function, and unless the same is true of his mind and his soul. Wherever there is unexpressed possibility or function not performed, there is unsatisfied desire. Desire is possibil- ity seeking expression or function seeking performance.

A person cannot live fully in body without good food, comfortable clothing, and warm shelter, and without freedom from excessive toil. Rest and recreation are also necessary to his physical life.

One cannot live fully in mind without books and time to study them, without opportunity for travel and observation, or without intellectual companionship.

To live fully in mind a person must have intellectual recreations, and must surround himself with all the objects of art and beauty he is capable of using and appreciating.

To live fully in soul, a person must have love, and love is denied fullest expression by poverty.

A person’s highest happiness is found in the bestowal of benefits on those he loves; love finds its most natural and spontaneous expression in giving. The individual who has nothing to give cannot fill his place as a spouse or parent, as a citizen, or as a human being. It is in the use of material things that a person finds full life for his body, develops his mind, and unfolds his soul. It is therefore of supreme importance to each individual to be rich.

It is perfectly right that you should desire to be rich. If you are a normal man or woman you cannot help doing so. It is perfectly right that you should give your best attention to the science of getting rich, for it is the noblest and most necessary of all studies. If you neglect this study, you are derelict in your duty to yourself, to God and humanity, for you can render to God and humanity no greater service than to make the most of yourself.