Poor Investing Is Just a Bad Habit Part II


We can learn some great common sense lessons about investing from the incredible response to the Save the Brazilian Rain Forest piece I sent to you. The reply below for example offers a differing point of view and brings this century's most exciting investment opportunity into focus.

Here is what our friend from Brazil wrote:

"Hi,

It's true that we still cutting down lot of trees in Amazon, however it is very hard to stop since we face a social problem. People that lives in Amazon are very poor and cut trees for a little bit of money. However it's not true that the Brazilian government is signing a law that allows the Amazon to be reduced to 50% of its size. This is a BIG lie. Well, I can send some senator's e-mails addresses so you can chat with them. Bye
Guilherme"

At our recent Inspired Investing course conducted here at Merrily Farms we discussed the importance of gaining more than money from our investments. This is an vital investing habit from a practical point of view if we are focused on some great achievement beyond making a buck, we are less vulnerable to the worst investing risk of all (greed).

Helping poor people is one wonderful, fulfilling way to make money that may even assist mankind in extending its stay on this planet.

Greed is simply a bad habit borne from lack of thought. Money is very affected by the law of diminishing return. The more one makes the more one wants. When the desire to make more and more without thought about what is being given gets out of balance investors make all types of dumb mistakes. An important vision of how and what to give helps maintain this balance between providing service and obtaining wealth.

Now here is a really big service that is desperately needed.

Guilherme's message above points out the sad but true fact that the rich world, in its attempt to preserve natural resources, sometimes throws already very poor people into even deeper economic distress.

This is happening big time in Ecuador right now for example. The subsidized cost of gas in Ecuador (48 cents a gallon) is the lowest in the world. The government wants to raise this price to market levels and this makes global economic sense. Yet what happens to the third of the population that live on a dollar a day? These poor people have already been clobbered by dollarization. When the country converted to the greenback there was a dramatic shortage of coins so items that previously cost twenty-five, fifty and seventy-five cents rocketed to a dollar.

Not a problem?

It is if your budget is twenty-five cents a day for rent, twenty-five cents a day for food, twenty-five cents a day for fuel and twenty-five cents a day for everything else. These people earn a dollar a day. Where do they make up the difference?

Dollarization may help the poor become better off in the future, but these people are just trying to survive now.

One of the big social tensions of the late 1900s was Communism versus Capitalism, Democracy versus Central Control. Great business opportunity came from the resolution of these tensions (such as all the large arms manufacturers). Today one of the biggest global tensions is the pull between the rich and the poor. Never before has their been such economic disparities. Never before has their been such effective communication systems that let the poor know about this ever widening gap. Never before has the availability of destructive weapons allowed the poor to vent to so dramatically their frustrations.

These problems can only be solved by business. Governments will rant and rave, create Plan Colombias etc, make drugs illegal and talk about economic distortions but, the bottom line (as has always been the case) will be resolved by businesses creating profitable ways of servicing these poor people.

And what a market!

There are now six billion people in the world. About 800 million make up the rich populations of the west. This means that there are over five billion people waiting for us to serve them.

How?

Lending institutions for the poor. Environmentally friendly jobs that allow poor people to leave ghettos and work on previously non-productive land. Birth control (boy will I open Pandora's Box on this one), low cost, fuel efficient transportation, education for all. These are just a few ideas.

For example Merri and I are participating in a public foundation (Land of the Sun Foundation see http://www.littlehorsecreek.com/ecuador/landofsun.shtml) that helps indigenous people all over the world return to work on land. We are working with the foundation to create ways for previously unused land to be turned into eco-safe businesses.

The opportunities are limitless, the profitability huge and the beyond wealth rewards precious. These economic opportunities create a great new frontier. I hope you'll find them a profitable adventure and good investing!

Gary


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