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Do you think giving attracts wealth? A lot of millionaires do. Here’s how to make it work for you

You are reading Entrepreneur United States, an international Entrepreneur Media franchise. This story originally appeared on MarketBeat

To some people, the idea that giving money attracts wealth seems like a lot of hokum, but others strongly believe that living a life of abundance can make you a millionaire.

Contributor – MarketBeat

When you give back, the argument is that this type of abundant act is flowing back to you. Not only do you feel great, but you also earn money with your freebies. In fact, wealth givers often say that before you can receive wealth in the first place, you must first learn how to sow goodness by giving.

It’s a hot topic ahead of Giving Tuesday on November 30. According to Giving Tuesday, Inc., the nonprofit behind the famous hashtag #GivingTuesday, 34.8 million Americans donated $ 2.47 billion to Giving Tuesday on December 1.

Let’s go over this seemingly incongruous concept: how to give your money away make you more money? We will find out.

Reasons Why Giving Your Money Attracts Wealth

Let’s take a look at the (admittedly unscientific) reasons why giving away money increases your prospects for wealth.

Reason 1: You adopt the principle of abundance against the principle of scarcity.

Scarcity vs. abundance means you stop seeing the world as a kid hoarding their Halloween candy. Instead of stuffing Halloween candy in every nook and cranny of your closet or believing that you’ll only get so much money before your allowance runs out (a la Mr. Scrooge), an abundance mindset takes on an abundance mentality. different approach – that there is a lot for Everyone.

Holding on to your money emphasizes the scarcity mentality, and wealth experts say it will hamper your ability to attract money.

Reason 2: It focuses your attention on what you want.

When you focus on attracting wealth, it can happen to you because you are creating momentum behind those thoughts. A negative mindset (like focusing on not having enough) can become a self-fulfilling prophecy. Instead of focusing on the fact that you weren’t able to purchase the “extra” things you want, figure out how you will donate to charity once you have the money.

How to give and attract wealth

Now what? Easy – you pick a charity, figure out how much you will give, figure out how you plan to give, and increase your percentage each year.

Step 1: Choose a charity.

Do you want to increase the tithe in your church? Give to your alma mater? Allocate funds to eradicate childhood cancer? Whichever recipient you choose, identify them and make a commitment to them – or multiple charities, if you prefer.

You can use Charity Navigator to help you determine the right organizations. The site assigns trust metrics to nonprofits so you know which charities are accountable and transparent. Charity Navigator does not charge the organizations it evaluates so that it can keep its marks objective.

Step 2: Determine how much you will give.

You may want to choose a small amount to start with so you can donate larger amounts later. (Many wealth experts suggest working up to 10% of your income.)

Let’s say you earn $ 100,000 per year. You may want to start giving 1% of your salary, or $ 1,000 per year – just $ 20 per week.

You may find it easier to get into the habit of giving early in your career (or before you earn millions) and keep giving a higher percentage as you earn more.

Of course, the mindset is that the more you give the more you will receive, but that doesn’t mean that you are pushing your limits or giving so much that you have to leave your home.

Step 3: Determine how you plan to donate.

Next, determine how you plan to give – through regular donations or a lump sum throughout the year. Some organizations run campaigns throughout the year and some companies often offer a matching donation option.

You can also save all your effort for Giving Tuesday, donate through a donor advised fund, start a private or family foundation, join a donor circle, or donate items you own, like a car or clothes. Let’s take a look at some of these definitions:

  • Fund advised by donors: Donor-advised funds, also known as charitable giving accounts, offer less expensive and more easily accessible options than using a private foundation. The sponsoring institution manages your money once you have invested it.
  • Private or family foundation: Private or family foundations look like what they are: foundations that allow you to donate money based on your goals and preferences. The IRS imposes rules on private foundations, including how much you must donate each year. It is important to involve an attorney and an accountant in order to achieve the foundation’s goals and meet all IRS requirements.
  • Donation circle: Giving circles can involve community gatherings that come together to offer donations to specific charities or groups. Giving circles don’t just exist in your local community – you can find them state or nationwide.

Step 4: Increase your donation percentage each year.

Last year’s Giving Tuesday donations were 29% higher than in 2019, despite the pandemic, according to Giving Tuesday.

Just like increasing your retirement savings percentage, why not do the same for your philanthropic efforts? Increase your donations to the percentage that suits you best.

Step 5: What now? Watch my bank account grow?

Winston Churchill said (roughly paraphrased): “We earn our living with what we earn, but we earn our living with what we give.” (He also said, “If you’re going through hell, keep going,” also great advice.)

If this seems like the least “safe” way to embrace wealth, you are right. It’s not like putting X amount on the market and expecting a 10% return after 30 years of compounding. However, experiments have shown that people often take higher (read: higher paid) leadership positions after their known charitable acts.

Giving Attracts Wealth – Try it!

If someone else needs your money more, don’t hang on to it, give it away. Give and you will receive: just a month before #Giving Tuesday is a great reminder.
Don’t be surprised if you find yourself richer because of it – in more ways than one.

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Rodney N.

The author Rodney N.