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I’ve never been big on donating money to charities, but I’ve never really given it much thought. It was more the annoyance of having someone knock on my door and then make demands about how I donate money to their charity.

For example, one night around 9pm a man knocked on my door and asked if I wanted to donate to a charity that preserves rain forests and so on. I’m a bit of a greenie, so I was ready to give him some money but he refused the cash. “We are looking for a donation that we take monthly – as a regular thing”. I explained to him that I was travelling next year and had no idea what my financial situation would be like, but I would be happy to donate as a once-off thing. He refused again and gave me same story about the “monthly commitment”. It was pretty obvious that he was getting a cut of the monthly commitment, and as a result wasn’t interested in my genuine donation. He left empty handed and I walked back inside frustrated with the world.

Ever since a friend asked me to donate to a charity quite some time ago, I’ve given it some thought, and to be honest I ask myself “what is the point”.

For instance, charities supporting cancer research are just misguided, and wasting money on research for a wonder drug, when clearly the solution is a good diet and a healthy lifestyle. Doctors receive essentially no training on nutrition, despite it being the most important thing in our lives, and good nutrition being the most plausible way to “beat” cancer.

I plan to pick some well thought out charities that I believe strongly in, and donate to them only. I think it’s a better way of going about making donations.

Steve Keen is professional economist. Steve predicted the Global Financial Crisis in December 2005, and predicted falls in house prices of up to 40%. Some believe he is a “doomsayer” while to many of us he is merely a realist.

Steve has recently written his latest edition of “Debtwatch”. Debtwatch No 41, December 2009: 4 Years of Calling the GFC looks at where Steve started his journey and began to realise the global and Australian economic situation.

“…debt had been growing faster than GDP–4.2% per annum faster in Australia’s case for over 40 years, and 2.7% faster for longer in the USA’s. An unsustainable trend in debt had been going on for almost half a century.

Staring at those graphs, I realised that these debt bubbles had to burst (and probably very soon), that a global financial crisis would erupt when they did, that someone had to raise the alarm, and that given my knowledge, that someone was me.

Less than 2 years later, the Global Financial Crisis erupted, and economists who didn’t see it coming, and who for decades had argued that government spending could only cause inflation, suddenly called for–and got–the biggest government stimulus packages in world history to prevent an economic Armageddon.”

Australia's Private Debt to GDP Ratio, 1945-2006

He covers topics such as debt servicing, deflation and depressions, bad theories, and his opinions on where we are headed.

“With such ignorance about the dynamics of debt, academic economists and Central Banks around the world are hoping that the crisis is behind them, even though the cause of it–excessive levels of private debt–has not been addressed. They are recommending winding back the government stimulus packages in the belief that the economy can now return to normal after the disturbance of the GFC.

In fact “normal” for the last half century has been an unsustainable growth in debt, which has finally reached an apogee from which it will fall. As it falls–by an unwillingness to lend by bankers and to borrow by businesses and households, by deliberate debt reductions, by default and bankruptcy–aggregate demand will be reduced well below aggregate supply. The economy will therefore falter–and only regular government stimuli will revive it.”

Steve’s predictions for the future?

“…I do not share the belief that the GFC is behind us: while the level of private debt remains as gargantuan as it is today, the global economy remains financially fragile, and a return to “growth as usual” is highly unlikely, since that growth will no longer be propelled by rising levels of private debt.”

If you have the time, this really is a worthwhile read. Steve Keen’s blog is at www.debtdeflation.com.

I’ve been reading “The 4-Hour Work Week: Escape 9-5, Live Anywhere, and Join the New Rich” by Tim Ferriss lately. It’s the first time that I have read a book that always says “you’re not going to believe this” or “you’re going to think I’m crazy for saying this”, and never actually thinking it. It’s as though my views and goals in life fall in line with everything that he is preaching. Ok so maybe not all of it – I do still have my own opinions and don’t agree with some here and there, but essentially I have the same goals:

• Don’t get tied to a physical location
• Work as little as you can
• Actually do what you want to do in life

This is all good and well, but you really need to financially support the lifestyle that you want. If you have read any of my other posts on this site, it’s probably obvious by now that I’m not a very materialistic person. I’m no Amish, but I’m not very driven to have a lot of “stuff” either.

By not having the need to own a lot of posessions, I personally have a huge advantage – I can get away with earning less in order to have the lifestyle that I want. Of course if you do have a lot of needs by way of posessions, it’s all possible, you just need to raise more income.

How do I plan on doing this? There are plenty of ways, but essentially I am working on projects that require little to no work from myself after the initial setup. I’m not quite at the “outsource everything” stage, so I’m doing a lot of work myself (since I actually enjoy it), but maybe one day.

For instance, I run a website called “Eco Update“. The idea of the site is to aggregate content – basically it pulls the relevant content from other sites and then displays it on mine. The aim is to collect content on a few related topics, making it a “hub” of eco friendly/green living news and information. From the income generating point of view, the site also features Google Adsense advertising, and generates a minor income stream for me which requires little to no effort after the initial setup.

It goes to show that while you can make smart investments to generate passive income, there are also other little projects that can do the same for next to no cost. Some people like me create websites and use affiliate programs and advertising banners to generate income while others will start a dropshipping business. There are plenty of options and you are only limited by your imagination.

Think about it, then do some planning, and make it happen. Start small if need be and aim for the stars.

I’m lucky enough to have been sent to Queensland this week for work. I am here to attend a training/conference/expo of sorts called Microsoft Tech.ed.

Upon arrival to the conference I was given a HP netbook – a HP Mini 2140 to be precise. I’m a massive geek and I love this thing (I’m typing this blog entry on it right now).

I just can’t believe how image driven Queensland is. I know everyone, everywhere is somewhat driven by image, but never before have I seen people so driven by image that their lives evolve around it. Talking to Queenslanders, watching them walk around on the streets, seeing the numerous mini trucks, heavily modified v8′s and turbo cars everywhere, not to mention people riding choppers, etc, etc – it’s just a state driven by looking good – at any cost! They are all trying to keep up with eachother, even though only few of them can afford to.

Obviously this sort of thing happens everywhere – certainly in Adelaide where I live, but just not on this scale.

While I’ve been here I’ve also had some time to catch up with my sister who lives in Queensland too. It’s been great to catch up with her, and finally meet my niece – who is just awesome.

Spending time with my sister and her family has once again reinforced my opinion that “things” and ”stuff” is just so unnecessary. I completely understand that people need their hobbies, they need their few luxuries, but at what cost?

This isn’t a dig at the state at all – it’s beautiful up here… In areas anyway. I’ve considered the idea of moving up here a fair few times now (although never seriously enough to talk with my fiancee about it). I just don’t know if I could keep up with everyone else. I really think that to survive in Queensland you need to be very career drive, have very well of parents, or be happy to live a life of eternal debt.

With the Global Financial Crisis perceived to be behind us, people are out and about in Australia spending up big like it never really happened here. I suppose it didn’t for a lot of people.

I try to keep an eye on news articles, and forum posts on the Aussie dollar and inflation figures. While I’m certainly not an expert, I’m slowly beginning to understand how things work in this world of ours.

Money is important to everyone during these times. It puts food on our table and clothes on our back. It’s most people’s primary concern, and as a result they want more of it.

My mum was talking to me the other day about her superannuation, telling me how she needed more in there so she can retire comfortably. Already in Australia, super funds have taken huge hits in their returns. Over the last few years people have lost more money than they have made in their super fund, yet we are still all told that we should invest all of our money into super for retirement.

Following the Real Estate Bubble in Australia and the opinions of those who know their economics, it’s very plausible that our country will suffer high levels of inflation in the future. All to support a housing bubble.

So we are all banking on being rich. People invest for the future, so they have more money. Shares, property, super and so on. It’s all so we have more money, later.

The question I ask everyone is, “what is the value of a dollar?”

What’s it worth to you? What will it be worth in 20 years time? Are you banking on being rich?

I tell my mum to plan for the future. In my opinion, she should be planning to have everything she needs before she retires (within reason of course). Planning to have the money to do it later is a dangerous idea. If inflation hits, and the car that once cost $25,000 now costs $100,000, she’s stuffed!

I keep telling my friends who are rushing into the idea of buying a house to take their time and get to it when they are ready. No one will listen because of the free money on the table from the government, and the fact that they want to get in “before the next boom”. They aren’t necessarily making money from a boom. They are making “more dollars”, but not actually becoming wealthier in the long run. While their house is “worth” more and if they sell they will have “more dollars”, everything they will want to buy with those extra dollars will be more expensive. Essentially, they are perceived to be richer, yet everything is more expensive. They are back at square one. Essentially, if their money is making 5% interest, and inflation is 5%, they aren’t making anything. The numbers are just changing.

True financial planning, true investing is beating this situation. You need to make more money than inflation is absorbing.

It’s amazing how common sense this is for most people, yet how completely confused some people are by this information. To some, a dollar is worth a dollar, nothing more.