555. Why We Should Pay Our Debts

Pay off your just debts. When you do this you become wealthier (paradoxically) because it is always more expensive to owe money than to be debt free, even with the "tax-breaks" that sometimes attach to debt. It can be difficult to pay your debts but if you take the decision and focus on the process, it can be done. Use the Snowball technique and attack each debt in turn until you are clear. All the money you have been using to clear the debts can now be diverted into investments and you will begin to accumulate wealth. Being debt free makes it cheaper to stay alive.

477. Losing Money

Every time you lose money, you destabilise your financial position. Never deliberately make a loss just so you can take a tax break. It is ALWAYS better to make a profit and pay the tax if you must. Better still, make the profit and avoid,(not evade), avoid the tax.

There is a distinction between tax avoidance and tax evasion. Tax avoidance is LEGAL, evasion is illegal. This distinction can keep you out of jail.

345. Charity

Give to charity. Give wisely. Pick charities that are important to you and support them. A part of all you earn is yours to give away to charity. You should allocate your income as follows : -

Income %
€100

Full 100
Tax 30
Debt 30
Expenses 21
Savings 9
Charity 10
Investment 9

When you give to charity you should give 10%. This is one tenth. The meaning of the word "tithe" is to give 10%.

Give to your charities with an open heart. Give gladly. Do not resent your gift. Operating on this basis, be careful about where you choose to give. Everywhere there are people who have plans for your money. It is yours until you give it and only you have the right to plan for its use.

Everywhere there are "charities" that spend more on administration than on the causes they claim to support. You should be clear in your mind that this is nothing more than exploitation of the cause for the benefit of the organisers and is nothing short of fraud. Have nothing to do with these organisations.

Another form of exploitation is the phenomenon of "chuggers". This is a portmanteau word made up of the "ch" in charity and the "uggers" in muggers. It is the practice of mugging people on the street for charity. When you put money in a collection box you have no guarantee that the person holding it will ever return the money to the cause. Avoid them like the plague that they are.

When choosing a charity to support, do not be swayed by emotional appeals. Check out the bona fides of the charity and only give if the money is going to the cause and not the organisation. Demand to see their latest audited accounts before you give and only give if you are satisfied.

Build giving to charity into your budget. That way, at the start of each year you will know how much you intend to give and when you intend to give it and to which charity. Then you have made the decision once and for all and can forget about it until you are preparing your budget for next year. This is basically a mind-clearing sytem. Do not entertain appeals for anything else during the year (but keep the appeals on file for your next budget.) If you wish, you can budget for emergencies like floods, volcanoes etc. and keep money in a fund for that, earning interest.

40. External Approval

Seeking approval is not in itself an unhealthy thing. Needing it is unhealthy. It is an unhealthy state to be immobilised if outside approval is withheld. This is an important distinction. You do not need the approval of others in order to feel good about yourself. You will encounter huge amounts of both approval and disapproval throughout your life. You cannot please everyone all the time. You cannot please any one person all the time either. When you encounter disapproval in others, provided you know that you are right and acting in the best possible way, do not let their disapproval stop you from doing or saying what you know to be true. Do not even give ear to their disapproval or anger. You should be aware that people will often direct their disapproval at you in order to try to control you for their own ends and your ultimate disadvantage. (Trade Unions and other organisations are very fond of doing this). Ultimately, the only approval that matters is your own self-approval. This self-approval is definitely NOT the same thing as conceit. Self-approval is honest. Conceit is a form of self-deception, saying "I approve because it is me even though I KNOW IT IS WRONG !" This is a form of Psychopathy. You must learn to respect the opinions of others and at the same time not be consumed with winning everyone's approval. This can be a very delicate balance. Approval is nice but it is like a tax break. It should be treated as a bonus and not the main reason for doing whatever you are being praised for. You should do things because they make sense or are a good deal financially, not primarily for approval or tax breaks. Remember you are the captain of your own ship. A wise captain seeks information and advice but plots his own course. He does not follow like a sheep.