Request for Your Personal Finance Questions

I’m trying a new thing with my newspaper.

Could you send me your specific personal finance questions, ideally about some decision you are trying to work through? If you need anonymity, that’s perfectly doable. A good email to send your questions to: michael@michaelthesmartmoney.com

Thank you!

personal_finance_help
Hand holding placard with help text vector illustration, person asking help

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Ukraine Philanthropy Part I – How You Can Help A Lean Scrappy Group

I wrote recently about what would be on the bottom of my list of philanthropic priorities. 

What is on the top of my list? I have only just begun to act on it, but the short answer is Ukraine, my geopolitical obsession for a little over a year.

My main honest thought in February 2022, during the first week of the invasion, is that I would have fled the fight. I fully expected Ukrainians to do the same. Their resistance to the Russian invasion, and their relative success in not being rolled over by the successor to the feared Red Army, astonishes me. 

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Ukraine key locations

The conflict may last many more awful years. One of my main questions over the past year is how can I, and by extension how can Texans equally obsessed as me, support Ukraine?

Official Channels

Two official sites exist to gather international private support for Ukraine’s resistance. As a first response to my question I think people could and should consider these. 

Ukrainian President Zelensky created United24,

which solicits donations for one of three purposes: 

  1. Defense and Demining,
  2. Medical Aid, and 
  3. To Rebuild Ukraine

Mark Hamill, who portrayed rebel Luke Skywalker in the Star Wars epic about scrappy resistors fighting an evil empire against all the odds, has signed on to this official effort to support Ukraine. They accept credit and debit cards online. As of April 2023, Ukraine24 says they have raised $321 million this way.

In addition, the National Bank of Ukraine created a site for private direct donations to support the Ukrainian Armed Forces.

The National Bank of Ukraine claims that as of April 2023, it has raised the equivalent of $677 million (25 billion Ukrainian Hryvnia) through direct donations. 

Unofficial Channels

One of the unique features of this invasion is how technology – through social media, and on-the-front-lines communications for example – enables individuals to offer material support in a less official capacity. There are likely thousands of small-scale efforts that have sprung up since February 2022 to support Ukraine.

Austin-based television director Dax Martinez-Vargas met fellow advertising director Mykola while shooting television commercials in Ukraine. Following the 2014 Russian invasion of Crimea, Mykola’s television work dried up. As Martinez-Vargas tells it, Mykola over time built a discussion group on the social media platform Discord to call attention to Ukraine’s situation. When Russia invaded in February 2022, US-based members of that Discord group asked Mykola how they could help get supplies to where they were needed most. The discussion widened to others interested in Ukraine’s plight on the social media platform Reddit, where Mykola continues to build his international audience using the alias “JesterBoyd.”

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JesterBoyd

Dallas-based entrepreneur Steve Watford joined with Martinez-Vargas and a Nevada-based entrepreneur Anders Boyd to found Ukraine Front Line, Inc. 

Their original common bond was Mykola’s Discord group, and a desire to help as directly as possible. Boyd built the group’s website. Watford became President and got the organization recognized by the IRS as a 501(c)(3) charity, eligible for tax-advantaged giving from US citizens. 

Since then, Watford reports, about $50 thousand from 200 individuals and two trusts have been sent to support Mykola’s efforts to deliver needed supplies to the soldiers and medical personnel at the front. As their man on the ground in Ukraine, Mykola arranges purchase and pickup of materials, often in Poland, and sees their delivery by himself, or via couriers. They’ve purchased and delivered supplies such as combat medical supplies, cold weather uniforms, and reconnaissance drones.

It’s all very scrappy, lean, unofficial, and grass-roots. Watford, Martinez-Vargasa, and a third board member Robin Rohrback with whom I spoke, all prefer the efficiency of direct support to Ukrainians over more official charities or big established international charities. 

Compared to larger organizations, the material delivered by Ukraine Front Lines, Inc is tiny. But as the volunteers see it, with no overhead and volunteers who cover their own administrative costs, 100 percent of donations go to where it’s most needed in Ukraine.

The risks

The New York Times reported last month on Ukraine charities that have popped up since the invasion began 14 months ago that have raised eyebrows.

Accusations include lying about the biographies of key members, claiming official registration or pending registrations as an official charity when that wasn’t true, or exaggerating accomplishments or deliveries of supplies. A year ago I sent a small amount of money via PayPal to a Ukraine-based American with an active Twitter presence who represented just such a grassroots organization. He was mentioned as a controversial figure in that recent New York Times article, and he has since gone dark on Twitter. For small organizations, one should always maintain some level of skepticism. 

For what it’s worth, Ukraine Front Lines is a registered 501(c)(3) organization. Mykola and his in-country couriers do an admirable job of photographing and documenting their deliveries, posting on the Ukraine Front Lines blog and Reddit. 

One upside of supporting small organizations is efficiency. Another is that supporting small increases the chance of engaging in a philanthropy that is emotionally satisfying, through a narrative and personal connection. 

My donations

I am of the opinion that the US government and our NATO should support Ukraine generously with government funds. As of this writing, official US government support is above $75 billion, a combination of military, financial, and humanitarian aid. But I also hope and think Americans – who give close to $500 billion dollars in philanthropy per year – could make a difference as well.

Last week, I was successfully able to donate a small amount of money to Zelensky’s United24 for “defense and demining” through my credit card. 

Then I tried to donate a small amount using my credit card to the National Bank of Ukraine, but the payments didn’t go through. After three failures I tried to communicate via online chat, but the site’s chat function was in Ukrainian, so I was not able to complete that donation. 

Zelenskyy
Zelenskyy as civilian leader and leader of a country at war

Finally, I gave a small amount to Ukraine Front Line, Inc after speaking directly with three of their members, and after viewing Mykola’s very specific communications online. 

As we grind into the second year of a brutal invasion and defense, I hope and think the philanthropic power of Americans should and could be a force multiplier. 

Watford brings a very Texas attitude toward his support for Ukraine through Ukraine Front Line, Inc.

“We [Texans] bleed freedom, that’s our nature, and God help anyone that threatens it,” says Watford. “This same trait has been heroically demonstrated by the people of Ukraine. They were backed into a corner staring straight down the barrel of a loaded gun and said, ‘do it.’ They have and will continue to fight to preserve their freedom, and they’ll die before they give it up. That’s about as Texan as it gets.”

A version of this post ran in the San Antonio Express News and Houston Chronicle.

Please see related post: Ukraine Philanthropy II – Using Miles for Refugees

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Book Review: Principles by Ray Dalio

Editor’s note: I wrote this in February 2022 in the San Antonio Express News, as part of my series on “Billionaire Philosopher Kings.”

Ray Dalio is the founder of the world’s biggest hedge fund, Bridgewater. He is personally worth an estimated $15.7 billion. With his 2017 book Principles he aspires to the role of a great billionaire philosopher king, the kind I am specifically interested in analyzing in 2022.

Unlike philosopher king Peter Thiel who I wrote about recently, Dalio is not known for his political campaign funding, nor for supporting radical provocateurs with his billions.

Nevertheless, the power of a billionaire in our society should leave all of us cautious. Dalio intends to influence how we organize companies, our daily life, and our work life. The book presents three sections, a sort-of biographical “Where I’m Coming From,” a life-instructional part called “Life Principles,” and the managerial-oriented “Work Principles.”

Here are the most important points from Principles, consolidated for your convenience and consideration:

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Write down your thought processes and guiding ideas, all the better to return and refine them as you collect data and experiences. Seek truth relentlessly. Be radically transparent in your decision-making.  Be radically open-minded. Use computers to enhance your thinking. Analyze your business, yourself, and the world like a machine that can be broken into component parts. Identify weaknesses in the machine and address them forthrightly. Embrace setbacks and pain as part of the process. Use these as learning opportunities. Get better next time. Forget trying to look good or please people, try instead to achieve the goal you aim at. Don’t try to come up with the best idea on your own, instead come up with the best idea using all available sources. Seek out people who disagree with you, to test your own concepts and to learn. Be willing to fire people even if you like them. Suppress emotions and appeal to reason, in your thought process as well as in your relationships with people.

Time and again Dalio hammers on the idea of radically seeking truth and transparency no matter the consequences, while organizing your life and work like a machine that can be fixed through analysis. Emotions, he emphasizes, need to be suppressed to allow reason and truth to shine through.  Basically, be like Spock. (My words, not Dalio’s.)These sound pretty fine and useful to aim for if you want to build a hedge fund.

But here’s the thing. There’s something odd about reading Dalio’s own history of Bridgewater and of himself. He is radically untransparent. Opacity and elision are the rules rather than the exception. I understand he’s protecting colleagues and employees by not spilling the beans. But the stories of conflict within Bridgewater generally do not get fleshed out enough to even seem realistic.

With one big exception. He summarizes a memo his deputies wrote him in 1993, at a crucial time in his firm’s development. “Ray sometimes says or does things to employees which makes them feel incompetent, unnecessary, humiliated, over-whelmed, belittled, oppressed, or otherwise bad. The odds of this happening rise when Ray is under stress. At these times, his words and actions toward others create animosity toward him and leave a lasting impression. The impact of this is that people are demotivated rather than motivated.”

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Ray Dalio, Bridgewater’s co-chairman and co-chief investment officer, speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 15, 2021. REUTERS/Brendan McDermid

That part was clear. Indeed, it’s the most transparent part of a book which otherwise does not seem transparent. We get an idea of what it would be like to work for Ray Dalio, from his closest colleagues.

Here’s another idea I doubt billionaire philosopher king Ray Dalio is giving enough credit to. To the wealthy business owner, “speaking your truth,” “radical transparency,” and “leaning into conflict to address problems early” sound like great business bromides. 

But I worked on Wall Street long enough to know that being on the receiving end of your boss “speaking his direct truth” involves spittle-flecked f-bombs, smashing telephones and telling subordinates what f-ing morons they are. 

That is to say, radical transparency is experienced differently, depending on who’s giving it, and who’s receiving it. I do not believe – now I’m speaking realistically about a world of vastly unequal power dynamics at work, in politics, in society – that radical truthfulness works the way he says it does. Humans are not machines to be fixed in this way. Ray Dalio’s ability to deliver radical truth bombs will not be met by his subordinate’s equal ability to do the same. To think otherwise is to embrace a curious understanding of human nature. 

The business press wrote a lot in 2017 about Bridgewater’s attempt to replace Dalio with the next generation of hedge fund leadership. It did not go well. I assume it did not go well because radical transparency between everybody is really weird. It’s not human. People who write about the corporate culture of Bridgewater usually say: This hedge fund is really, really weird.

The larger issue is our willingness to convey philosopher king status to people who – while conventionally successful in a capital-worshiping society – are not necessarily those who should be allowed to dictate the principles for our lives. People who we should not emulate. People who would create organizations and a society as a bizarre distillation of their personal identity fantasy.

I’m guessing that if I worked at Bridgewater and expressed these particular truths this particular way, I’d be sent to workplace Siberia for further study of Dalio’s little black book until I saw the truth, or I left the company.

Dalio’s Principles makes me think explicitly of Mao’s Little Red Book. We should always be afraid and skeptical of powerful people – in their own lifetimes – authoring books that purport to direct and optimize humanity. 

Self-made billionaires get to write their “here’s how I built it” book, and that’s also fine. When we hold them up as our philosopher kings for shaping society and human relations, that’s when it’s not fine.

It is too soon to adopt Ray Dalio’s Principles as the bible for human relations. It is also too weird. 

So let me be as radically transparent as I can be, Ray: You, your book, and your creepy Spock-inspired principles of rationality lack emotional intelligence.

A version of this post ran in the San Antonio Express News and Houston Chronicle.

See all Book Reviews on Bankers Anonymous

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