Sunday, June 21, 2009

Make Your Money Way More Interest-ing: Put it in a Kiva account

Instead of leaving money sit in a zero interest checking account, why not put it in a Kiva account. Kiva accounts generate loads of interest, of the human kind. Consider this:

I just loaned some money to a woman in Ghana who is seeking to expand her business. She makes rice and stew and sells it by the side of the road to help pay for her children's education. By borrowing money from a community bank she can buy ingredients in bulk and get a better price and thus a better margin. With that margin she can hire another person and double the output and revenue. How interesting is THAT!

When she repays the loan then my money is available to me for withdrawal or I can choose to loan it to someone else. I don't earn financial interest on this money, but it makes my money way more interesting. Consider this:

I opened up a business account with Bank of America about 5 years ago. For the last 8 months there has been about $500 in the account because that business does not do much business these days (these days I have a day job). So each month Bank of America charges me $13.00 simply for operating the account. On an annual basis that's more than 30% interest, just for letting money sit there. They don't even have to send me paper accounts. So now I'm taking half that money and putting it into Kiva (the other half is paying down a credit card balance).

During these tough economic times it's easy to think that we have no spare cash, no extra money. But I bet a lot of people have small amounts of money lying dormant, either earning no interest or actually costing interest in the form of maintenance fees. How much more interesting to lend that money to someone who can put it to work. Your money is relatively safe, is not incurring fees, and is potentially transforming lives.

Go Kiva!

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