One of my favorite business school classes focused on Emerging Market Economies.  We read C.K. Prahalad’s book called, “Fortune At The Bottom Of The Pyramid“, which basically described how entrepreneurs were finding cost effective ways to serve the poorest people in the world and also be profitable.

Conventional business wisdom states that one must go after those consumers with the deepest pockets and the highest propensity to spend.  Prahalad argues that we have a social responsibility to help the other end of the spectrum improve their living standards and not be afraid of going bust in the process.

One of the keys that came out of helping the poor in emerging markets is the concept of micro-lending.  Micro-lending is a fascinating concept which essentially pools together the funds of people in usually small communities, and lends out those funds to a select few.  Together, a community is able to help each other more impactfully than if they were separate.  What’s also very interesting is that the tighter the community, the lower the default rates compared to conventional banks because everybody feels a deep sense of responsibility.

THE YAKEZIE WRITING CONTEST

The Yakezie Network of 70+ personal finance and lifestyle blogs have pulled together their funds to provide more than $1,000 to be divided among three winning contestants.  If each of us gave just $15 a quarter, we would collectively be able to distribute at least $600, $300, and $100 to the first, second, and third place winners who will use these funds to further their education.  We hope to slowly raise much more than a combined $1,000 as our blogs flourish and the Network grows.

What’s different from the Yakezie Writing Contest is that we are not a micro-lender, but a micro-giver where we expect very little in return.  Whether the recipient ever comes back to the Yakezie Network to interact and learn is up to them.  All we ask is that they use the funds to help pay for their education.  Students often have very little income and rely on low wages or their parents to get by.  I think we can help them.

In terms of creating profits for this particular venture, the idea is to simply have corporate sponsors with a history of giving, support our initiative.  Running the Yakezie Network is an absolute loss-making venture if we were to put a dollar value on the amount of time we spend building, testing, marketing, and running the Network.  Hence, we appreciate any type of support we can get.  The good thing is that neither Chris, nor I, or the majority of our members rely on our blogs as sole sources of income.  We all do this for the love of community, the challenge of development, and the spirit of giving back.

SPREAD THE WORD AND PARTICIPATE

If you know of anybody who enjoys writing, and is looking for funds to help pay for their education, have them visit The CarInsuranceCompanies.com Yakezie Writing Contest today!  All they have to do is follow the directions and write an essay answering one of eight questions.  The submission window is from Monday, April 18th to midnight, April 22nd.  If you would like to pledge any money to help contribute to our micro-giving efforts, please visit the Yakezie Pledge Page.

It’s been six years since adventuring down to Rio De Janeiro for several weeks to study abroad and get a taste of real life micro-lending examples as discussed by Prahalad.  After a lot of thought and hard work, I’m so pleased to say that we’ve finally created our own sustainable micro-giving platform with the Yakezie Writing Contest!

Thanks for all the support!

Readers, have you had an experiences with micro-giving?  There have been a number of micro-giving initiatives in India in particular and I’m wondering if there are other countries that you’ve noticed this practice flourish besides India, USA, and Brazil?

Best,

Sam

Twitter is a truly amazing platform.  I’m impressed with how some can literally Twitter all day and not get tired.  There is definitely an addictive element to Twitter which makes the program so alluring.  There are a ton of announcements of self greatness which I am very fond of reading for some reason.

Twitter Love Examples:

* “I rock because I created an awesome commercial about my product!”

* “My stock picks are up huge and outperforming the markets!”

* “Check out my net worth, killing it up 10%!”

* “Take a look at my new Gravatar picture!  What do you think?  Ain’t I cute?”

* “Happy birthday to me!  Come celebrate with me over on my site!”

* “Thanks!” -> What?  “Sweet!” -> What? “Cool!” -> What?

Let’s be honest, we love talking about ourselves.  We love consuming things until we barf.  If this wasn’t the case, Twitter wouldn’t be the hit it is today.  I wonder though, what would happen if we created a Twitter War where everything we wrote was disparaging and angry?

Twitter War Examples:

* “Shut the hell up already!  Nobody cares about your stupid book!  We got the last 32 tweets!”

* “If you are such a social media guru, why are you begging for money online?”

* “Instead of talking about how rich you are, why don’t you go choke on it instead?”

* “You look 10 years older and a little heavier.  I almost didn’t even recognize you in your new gravatar picture!”

* “Listen dork, just ask her out already!  It’s so obvious you have a crush on her since you insta-response every time she writes!”

* “No, I don’t want to follow you on the new Digg or Tip your damn post!”

* “Didn’t know there are full time jobs that pay you to tweet all day  Oh wait, there aren’t.  Get back to work!”

Do you think a Twitter War would generate a lot of followers and new ideas?  I wonder what would happen.  Hmmmm.  Just do me a favor.  Please tell @Financialsamura to SHUT THE HELL UP if I’m being too obnoxious on Twitter!  That way, our War can begin!

Cheers,

Sam

“Every battle is won before it is ever fought.”

This was the infamous line said by Gordon Gekko in the popular 1987 film Wall Street. Derived from Sun Tzu’s Art of War, a 2400-year-old Chinese text on military strategy, the teachings of this tactical mastermind have proven useful in various aspects of present-day life besides warfare.

Although Sun Tzu’s Art of War is studied most religiously by military commanders, political leaders, and corporate executives, the concepts are scalable to conflicts as minuscule as your struggle with debt. Like in war, where the objective is to overcome the enemy resistance, it is everyone’s goal to conquer their personal debt.

Debt is the bad guy. We are the good guys. The road to financial independence is a righteous path where we’ll have multiple encounters with debt – a merciless obstacle that seeks to consume us. Luckily, an old man from many many years ago jotted down some powerful advice that may serve the purpose of securing a victory against debt.

Universal Debt Teachings

Debt is, without a doubt, a dangerous adversary. A vast majority of the American population acknowledges the risks of carrying debt, yet we peacefully welcome it into our lives. The failure to understand the depth of the matter is a major reason that so many of us become victims of debt.

We must remain cognizant of the responsibilities of debt:

It is a matter of life and death, a road either to safety or to ruin. Hence it is subject of inquiry which can on no account be neglected. [Laying Plans: #2]

Thus it may be known that the leader of armies is the arbiter of the people’s fate, the man on whom it depends whether the nation shall be in peace or in peril. [Waging War: #20]

• Personal debt is influential in more than just our financial lives – it can alter lifestyles, sway career decisions, destroy relationships, and disrupt any sense of stability and comfort. Take it seriously because it truly could be a matter of life or death to not only yourself but also everyone around you.

The consummate leader cultivates the moral law, and strictly adheres to method and discipline; thus it is in his power to control success. [Tactical Dispositions: #16]

• In any attempt to maintain a firm grasp on our goals, consistency and persistence nurtures the attitude to make them realities. Financial independence asks of the same – a relentless drive when faced with an enemy such as debt.

Declaration of War

So, you’ve resolved that debt should no longer be a part of your life. It has presented you with a hostile environment that warrants forceful attention. Waging war against debt requires an aggressive demeanor and steadfast composure.

If you are preparing for battle against debt, heed Sun Tzu’s advice:

There is no instance of a country having benefited from prolonged warfare. [Waging War: #6]

In war, then, let your great object be victory, not lengthy campaigns. [Waging War: #19]

• Time is a friend of the enemy. Debt’s stranglehold will only get stronger the longer you take to deal with it. Consequently, interest accumulates – the power of compounding begins working against you. So, the cutthroat approach is ideal.

Now in order to kill the enemy, our men must be roused to anger; that there may be advantage from defeating the enemy, they must have their rewards. [Waging War: #16]

• You know the benefits of being debt-free: fewer worries, less stress, and restful nights. To obtain these rewards, get angry at the very existence of debt. If you are keeping debt around, you don’t hate it enough.

Security against defeat implies defensive tactics; ability to defeat the enemy means taking the offensive. [Tactical Dispositions: #5]

Standing on the defensive indicates insufficient strength; attacking, a superabundance of strength. [Tactical Dispositions: #6]

• Progress is essential to the removal of debt. Minimum payments can only keep you afloat for so long. A defensive stance merely keeps debt from overwhelming you, which it will eventually do. Instead, tread forward. With every extra payment you make, you are taking back another inch of your life.

Holding Your Ground

Cheers to you if you’ve managed to defeat debt – but you are not in the clear just yet. We all know how easy it is to go on a reckless spending spree. The next thing you want is to have to repeat your hard-fought endeavors due to preventable mistakes.

On future engagements with debt:

The art of war teaches us to rely not on the likelihood of the enemy’s not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable. [Variation in Tactics: #11]

• Keep your guard up because debt remains a lingering opportunistic foe. You’ll never know when an emergency brings debt back into your life. For most of us, it is inevitable that debt will crawl in and out of our lives. But in the end, with the right preparations, it will always leave.

We are not fit to lead an army on the march unless we are familiar with the face of the country – its mountains and forests, its pitfalls and precipices, its marshes and swamps. [Maneuvering: #13]

… If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle. [Attack By Stratagem: #18]

Thus it is that in war the victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterwards looks for victory. [Tactical Dispositions: #15]

• Know what you are getting yourself into. Know your financial habits. Know how evil debt can be. Take on consumer debt knowing that you have absolute confidence in your ability to kill it.

Multipurpose Advice

If you are thoroughly amazed at how a military text can be of such insightful relevance to your battle with debt, then you’d probably be interested in the entire text. The versatility of Sun Tzu’s Art of War can be extended to the other areas of our personal finances and the daily undertakings of our eventful lives.

A free download (PDF) of Sun Tzu’s Art of War is available >here.

With an open mind and some creative thinking, you’ll find even more precious wisdom that will be advantageous in your war with debt – including more lessons applicable to many other situations.

Sun Tzu wishes you triumph and glory on the battlefield!

The following is a guest post by Simon Zhen from >The Realm of Prosperity.

(photo credit: Pedronet)

I don’t talk much about my finances, but I will tell you that I’m in the process of refinancing a couple mortgage loans down by 1% each.  The interest savings is tremendous, making me very positive about consumption trends going forward as 10 other people I know are also refinancing.  It behooves you to at least call your local bank and check their latest rates.

It does make me wonder with the strength of the stock markets lately, how the bond market can still be so frothy to provide such record low interest rates.  Do remember that the higher treasury bond prices go, the more yields fall.  Could there really be deflation on the way?  I highly, highly doubt it but the bond market is telling us otherwise.

To humor our minds, lets say there is deflation on the horizon.  What would you do with your spending habits?  You’d probably stop consuming due to the assumption that whatever it is you want to buy will be cheaper in the future.  As a result, you’d hoard cash and de-leverage.  Bingo, that is exactly what plenty of folks are doing, including myself.  This self perpetuating mentality is very damaging to economic progress.  In addition to delaying consumption, you will probably seek ever higher yields.  With the 30 year treasury yielding 4% right now, it sure looks like a buy compared to only 2.85% on the 10 year.

When talking about deflation, keep in mind that money is simply a medium of exchange.  The more money currency you have, the better as the strength of your currency improves vis a vis the goods and services which it can buy.  Frugality really is en vogue again, and I just can’t wait until Samurai September when I spend the whole month buying nothing!

POSTS THAT CAUGHT MY EYE:

In “A Teacher’s Reply To Criticism”, Budgeting In The Fun Stuff responds to E-dog’s scathing post against teachers.  A very thoughtful response given BFS’s husband is a teacher.  I for one believe teachers are highly underpaid.  A merit based system that rewards great teachers is a great idea as well.  Great teachers have meant the world to me, and I am forever grateful for their tutelage.

In “How To Simplify Your Life”, Forest provides some great tips on simplifying your home, finances, and wardrobe.  I absolutely hate clutter and try and donate several bags worth of stuff to good will every month or two.  I try and by quality clothing that lasts for a while, and all my retirement finances are automated so I appreciate what Forest is sharing.

Darwin highlights “The 10 Dumbest Uses For Your Tax Dollars In The Stimulus Bill” in his anti-government rant.  I just want to say one thing, “Don’t touch my Ant Talk sessions!”

Everyday Tips and Thoughts asks, “How Realistic Is It To Retire By The Age Of 40?”  At 42, Kris provides a very cynical answers to the possibility i.e. “better start saving at birth!”  Good stuff.  I fully plan to try to retire by 40, but it doesn’t necessarily mean that I will.  Saving money, making money, it’s all just a game frankly because really, how much do we really need to survive.  Not much!

In “Destination Wedding Or Traditional Wedding: Which One Is Cheaper“  Young and Thrifty brings up a fun topic that sometimes costs and arm and a leg for hosts and the attendees.  I’m down with both since weddings are so fun!

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our E-mail or RSS feed.

May retail sales drop 1.2% or the most in 8 months as more and more people turn to personal finance bloggers for frugality advice!  I’m pretty certain nobody has ever come up with this statement, but think about it for a little bit.  Why is it that the public should take personal finance advice from BusinessWeek, for example?  The articles are written by relatively well-paid writers who are on a mission to report the news.  They do a fine job at that, but perhaps not as fine a job making things visceral like the personal finance community.  What’s more personal than a real person like Jeff delivering pizzas to get out of debt?  Not much!

It’s very hard for the mass media to compete against a team of personal finance bloggers such as the Yakezie.  We’re real life people responding to comments and putting ourselves out there.  There’s a two-way street with us.  If I were Editor in Chief of any mass media publication, I’d go out and hire an bunch of influential personal finance bloggers and put them on my payroll.  $75,000 a year will do or perhaps $150,000 a year if you want us to write an article a month exclusively for you.  By doing so, the Editor will inject new life, new readers, and therefore a wealth of new advertising dollars to the publication.

As evidenced by May’s retail sales figures, we are creating the news with our frugal ways instead of just reporting the news.  There’s a movement underway, can you feel it?  Maybe we’ll band together and talk about how we should never buy new cars again, causing June’s new car sales to dip.  Or maybe we’ll discover how amazing one person’s unsung journey is to fight poverty in Uganda and direct millions of dollars their way.  That counts for something.  Let’s make a palatable difference with the words we write.  Someone is out there listening.

Have a great weekend everyone!

Regards,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

There’s a fun hypothesis saying that you are the average of the closest five people around you.  I believe this to be true, do you?  What’s interesting about the blogosphere community is that anybody with enough intention can start a website.  Some are interesting, some are not, but regardless we can all compete with the ProBloggers and the Huffington Posts of the web in our own niche way!

Alexa is a dynamic website ranking and information company owned by Amazon, which has over 40 million users world wide.  The tool bar is free, and easy to download.  The Yakezie Alexa Ranking Challenge is straight forward.  If you’re outside of the top 200,000, get in the top 200,000 within 6 months.  I can’t even name 100 sites, let alone 199,999 sites.  Can you?  If you’re already in the top 200,000, get in the top 100,000.  And if you’re already in the top 100,000, get in the top 50,000.

There are some who poo poo the Alexa ranking system, and I recognize their two main arguments:  1) The system only tracks visitors who have the Alexa Toolbar installed, and 2) There are cases where some websites with bazillions of users have a worse ranking than sites with less users.  We don’t know why, because we don’t fully know what goes into the calculations.  It may be because readers don’t visit and just read off their RSS.  That said, the Alexa ranking system continues to grow, and is the best system we got.  At least 40 million webmasters around the world think so, and there has to be something to it if Google, Facebook, Yahoo and YouTube are ranked #1, #2, #3, and #4, respectively.

Since starting this site, I’ve been rejected as a guest poster, didn’t even get responded to, let alone make it as one of the 7 finalists for one site’s staff writer tryouts, denied admission to a personal finance blog network, and even got my first carnival submission rejected.  But through all the rejections, I took comfort in my friend, Alexa, who is always by my side motivating me to keep going.  I’m sure many of you have been rejected as well.  Here’s your chance to create our own network of powerful friends by joining in on the challenge!

BENEFITS OF BEING IN THE TOP 200,000

* You’ll get to compete for a spot on the top personal finance blogs list (Yakezie Network) and be on the first page Wise Bread’s Top 100 Personal Finance Blogs ranking. I’ve heard some publishers in the Top 100 don’t even bother to associate with others outside page 1.  Oh, the snobbery!  But seriously, if you’re on page one, opportunities start coming to you, because this list has become the default ranking in the community, and the default ranking in the community uses Alexa.  Remember the 80/20 rule.  There are 440+ on the list now and I’m sure it’ll just continue to grow.  The bigger the list grows, the harder it will be to reach the Top 100.

* Motivation.  Unless you’ve got an established blog already, writing gets very lonely and discouraging sometimes when not many people come to visit.  You might say you are writing for yourself and don’t care, but if that’s the case, why make your writing public?  Witnessing progress is fun!

* If you love books, you’ll get approached by authors and publicists looking to send you tons of free books to review and giveaway.  You may even get a catalog of a publisher’s entire library of books from which you can choose from.  In fact, you will have opportunities to sample many free products if you so choose.  You know how movie stars get all those goodie bags of stuff to sample at the Oscars even though they’re already rich and don’t need more free stuff?  It’s kinda like that, a virtuous cycle of people who provide mutual benefits.  If you someday wish to write a book, you now have direct access to the very people who reject hundreds of authors everyday!

* Advertisers will flock to you, and ask you to pimp things you’ve never heard of.  Some of them, could be gems, but many will be junk traps.  The Top 100,000 ranked sites on Alexa (top 0.25%) earn 72% of all revenue, hence you can potentially earn a good amount of lunch money from your site over time.  I have been very disinterested in advertising over the past the past six months, but I’ve recently had an “a-ha” moment.  Part of the money generated from this site will be donated to charity to help others more in need.

* Other big sites who never bother responding to you, suddenly take notice and give you the time of day.  Those comments you leave asking for feedback or help actually get addressed.   Cut them some slack though, because I’m sure they get inundated.  You can also join plenty of “exclusive” networks if you wish.

* If you want to earn a partial living as a staff writer, you have a much higher chance of getting accepted.  Furthermore guest posting and having others guest post on your site will be easier.

* You cultivate a competitive edge, get inspired and appreciate those who are way up the rankings.  I used to think watching golf on TV was extremely boring.  After I began hacking it up on my own, I now find watching golf extremely fascinating!  Same thing with a website.  You truly start to appreciate the marketing geniuses of some bloggers out there, and therefore strive to better yourself.

* Girls or guys, depending on your sex and preference, will love you when you say you have a “top” website at the bars.  For a brief moment, you can escape your mundane day job and pretend you are someone really important.  You could try saying, “Hi there good looking, I am the the CEO & Editor of X, America’s #1 personal finance site” for example, and you’ll immediately be whisked away into la la land.

TIPS ON BREACHING ALEXA TOP 200,000(Please share more if you have any!)

* Badge & Toolbar. Download and install the Alexa toolbar and put the badge on your site.   The Alexa toolbar is fascinating because it shows you so much detail about other sites you visit.  The badge will naturally peak interest as well.  The ranking is dynamic, and motivating.

* Content. Nothing else really matters, and that includes doing all that SEO stuff.  I had no idea what a site-map was, or what SEO (Search Engine Optimization) even stood for the first 4 months.  If you write something you feel strongly about, you’ll do great.  Try and write with a thesis.  Whether you are right or wrong is besides the point.  What’s more important is to get readers thinking about the topic at hand.  Write what you know, too, because if you try to fake it, people can tell.

* Content Length. Did you know that the average person spends just 7 seconds on a resume?  The point is that people have short attention spans, and if you write in huge paragraphs, with no breaks in the post for categories, you’ll likely lose readers.  After the 1,300th word, people’s eyes start glazing over, unless it’s superbly written.  This post violates this rule with 1,650 words, so I need to practice!

* Personality. Realize that you can’t please everybody all the time.  If you write with no thesis, no conclusion, no personal spin, then what’s really the point?  The great thing about the internet is that the market place is so huge, if our friends in America aren’t stopping by, maybe our friends from Australia will!

* Frequency. If you can post 2-4 times a week, that’s good enough!  You can try posting everyday, but you increase your chances of burn out, and you’re not getting maximum exposure for the articles you’ve written.   Notice how comments fade from your post after a new one comes, even though the older article is only a day or two old.  Instead, use the days off to visit other sites, comment, build relationships and let your articles percolate.

* Branding. Get an image that one can easily recognize as you.  Go to Gravatar.com, and use that image in many things you do.   There are a lot of Davids, Johns, and Jims in the community.  Instead, sign off as a variation of your site, or your site itself because nobody has a monopoly on your common name, and you may confuse others.

* Read & Comment. Actually read an entire post and get the concept.  If the post is too boring, skip it, but if it’s interesting enough, share your thoughts.  Comments inspire writers, because it shows that someone is listening.  There will be reciprocity.

* Twitter. Twitter is probably the best micro-blogging tool out there, which I don’t do enough because it’s off during the day.  I’m amazed how some have thousands of followers, and can also follow hundreds of people as well.  Make sure you have a widget that will allow others to retweet your content easily.

* Guest Post. I’ve only done only one guest post, and that was with Wise Bread six months ago.  I would have done another, but my second guest post got rejected because it was deemed too controversial.  Surprise!  Since then, I haven’t guest post for another site and have diverted all my attention here.  The rejected article hasn’t been published here just in case you’re wondering, but it will.  If you can write quality content on bigger blogs, while producing quality content on your own site, that’s probably the best way to go. 

Update: The rejected article is now up: “How To Get Your Super Motivated Boyfriend (SMB) To Marry You”

* Promote Others. If you’re scraping the bottom of the barrel in the rankings,  be selfless and promote others relentlessly.  Even if you are doing OK for yourself, promote others freely.  That includes re-tweeting and highlighting other articles on your own site.  The higher ranked sites will be appreciative and eventually return the favor.

* Don’t Think About Making Money. Because it will likely take a year or so if you’re lucky to earn over $1,000/month from your blog, the money you receive may demotivate you.  As soon as you start writing for money, you start losing your soul and it’s not as fun.  Write what you want to write, and the money will come.

CONCLUSION

If you just focus on two things, focus on content and promoting others. We’ve taken the initiative to start something on our own, so we might as well give it our best shot.  Like all ventures, it’s not easy maintaining the intensity and team effort goes a long way.  If we’re all in the top 200,000 by summer, we’ll be quite an influential bunch!  Just think about all the things we can do.

Once you break your particular Alexa benchmark, you can officially call yourself a Yakezie (pronounced yah-KAY-zee, and not to be confused with Yakuza).  Fail to achieve your goal in six months and you don’t have to chop off your pinky!  Who’s in?

TO JOIN THE YAKEZIE ALEXA RANKING CHALLENGE

1) Install the Alexa toolbar if not already and comment what your current Alexa ranking is, so we can keep track.

2) Write consistently 2-4 times a week on your own site and consider guest posting around the community including on Yakezie.com to raise your profile.

3) Install the Yakezie Challenger Badge.

4) Announce on your blog that you have joined the Yakezie Challenge.

5) Selflessly promote others and build relationships.

6) Stay committed and consistent over the next 6 months!  Whether you are a huge blog or a start-up, everybody most go through a 6 month Challenge period to ensure that we build the best relationships possible.

7) Come introduce yourself on the Yakezie Challengers Forum and get to know your fellow Challengers and Members.

8) Once the 6-month challenge is over, let us know how far you’ve come in the forums, on your blog, and via an e-mail.  If you’ve developed good relationships, broken 200,000 in Alexa, and are ready for the next step, we will invite you to submit a form and write your Yakezie Member Post and become an official member.

Keiju,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS feed.