Learning to trade well is essentially building a business that can make you self sufficient.  Especially in Forex, leverage plays a key role in helping you make the most of your money.  Of course that also means that there is more risk, but if we can manage that risk correctly, it should pay off in the long run.

In a similar way, loaning money to entrepreneurs in developing countries allows us to leverage the buying power of our currency to help them become more self sufficient.  Yes, the risk is much higher than lending on something like Lending Club because it is harder to get a feel for the financial viability of a small business in a foreign country.

However, I believe that this is much better than just giving people money.  It also allows us to “recycle” money instead of blowing it in one shot.  Anywho, I made a little money from the advertising on this blog last month, so this is what I did with it…

The Business I Loaned To

For my first loan, I chose Oyungerel Baasanjav from Mongolia and made a $25 loan.  She has a tailoring business and needed the loan to purchase string and wool for her business. She is married with two children and has been in business since 2008.

According to the description, she primarily makes gloves and scarves and business is picking up so she needs the additional materials.  Her total requested loan value is $475 and it was filled pretty quickly. That equals 600,000 MNT (Mongolian Tugriks).  Just for reference…according to Wikipedia, in 2008 public and private sector workers made an average of approximately 108,000 MNT or about $81 USD per month.

Why I Chose Her

Choosing Oyungerel had less to do with her and more to do with the local institution that qualified her for the loan.  Since there wasn’t much information on the borrowers, I decided to base my loan decision primarily on the local institution that was making the loan.  The local institution in this case was XacBank a microfinance bank.  They do full due diligence and have a 5/5 star risk rating (least risky).

What I found out was that XacBank makes these loans and does charge the borrower interest.  Then they back fill the loan with Kiva funding and the Kiva borrowers get repaid from the loan payments.  At first, this may seem like they are getting free money and in a way, they are.

But I’m OK with that for two reasons:

First, because they are taking the initial risk and putting out their own money.  They may not get the loan back filled, so they have to be sure that they can live with the loan themselves.

Secondly, because it does cost money to do the due diligence for the loan and go through the application process. I would rather have them get paid for this so they can do it well.  In addition, XacBank will give up to 9% of the interest paid back to the borrower in the form of a new savings account if they pay on time.

A final consideration, was the way that she dressed in the picture.  I know that this is a little superficial, but if she is a good fashion designer, she should look the part.  On top of that, if she took the time to dress well, she is probably more serious that someone who showed up in a t-shirt, flip-flops and shorts.

My Plan Going Forward

Since these loans are risky, my plan is to lend out each loan twice, then donate the money directly to Kiva’s operating costs.  I figure that this will get good use out of the money, while minimizing the risk of losing the entire principal.

Join Me!

If this is a cause that you would also like to support, I would love for you to join the lending group that I started on Kiva.  It is called the Trading Heroes Lending Team.  I don’t benefit in any way by you joining the Team, it just a way for Forex Traders to come together for a common cause.

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This is what the holidays are all about.

I just got an email today from OU Forex Trader that is pretty amazing.  12 traders/educators got together and are going to give you $7,000 worth of trading tools and educational material if you donate $7 to their holiday charity donation fund.

How’s that for ROI!

<—The charities that they support are listed here.

There are a few forex traders/educators on the list along with stock, ETF and futures traders.

I don’t know how good these courses are and I don’t make a dime by recommending this, but I thought it was a great idea and it goes to a great cause.

From what I was reading on the landing page, there are a few FULL courses and some trading tools like calculators and ebooks.  They say that one of the full courses being offered has been sold for $1,997.

Some of the educational materials are just parts of courses, just teasers so you possibly buy the whole course later.

But whatever, even if the entire package is absolute crap, it won’t break the bank and the donation helps out those organizations.   I’m sure that there is something to be learned from the educational material.

After you donate, they send you a confirmation email and access to the information will be emailed on December 27th.  But if you want to donate, I would do it now because they will probably shut it down before Christmas.

Click here to donate.

Happy Holidays!

For you, that may mean preserving Renaissance Faires, saving a donkey or supporting naked clowns.

Whatever the case may be, the charity should be doing work that you feel is important.  Growing up in Hawaii, I have always had a deep appreciation for the ocean and I would like to see it protected so we can all enjoy it for generations to come.

There are many non-profit groups that focus on saving individual animals or certain coastlines across the country.

Oceana takes a broader approach.  Here is a summary of what they are trying to achieve:

Founded in 2001, Oceana is the largest international group focused solely on ocean conservation. Our offices in North America, South America and Europe, work together on a limited number of strategic, directed campaigns to achieve measurable outcomes that will help return our oceans to former levels of abundance. We believe in the importance of science in identifying problems and solutions. Our scientists lead our team of economists, lawyers, and advocates focused on achieving tangible results for the oceans. Saving the oceans may take decades, but in each of our campaigns we aim to accomplish an important milestone in that effort within two to five years.

So why do I support them?

Here are the 5 reasons, in no particular order:

1. Their projects seek to change areas of the world where they feel they can make the most impact.  We are all in it together, so why only focus on one area of the world?
2. They have a high Charity Navigator Rating.  This may not mean much to some people, but I think it’s important to keep track of how they are spending their money.
3. There are a lot of other charities out there that focus on raising public awareness.  That is great and all, but how many people in the general public have the means or time to do something about it?  In my opinion, a conservation group needs to have professionals on staff who know what to do and can lobby for their causes.
4. What is their track record?  Oceana has a history of results.
5. I like their programs.  It is impossible to solve every problem, but I think they have chosen a good group of core areas to focus on.

Even if you don’t believe in preserving the oceans, I would encourage you to get out there and find a charity that you do believe in and give them whatever you can afford.

If you are not a rockstar trader yet, that’s OK.  Just imagine if everyone in this country gave just $1 per month…that would still be a lot of money!

Remember, charitable donations can be tax deductible (check with your tax professional) and it always makes me feel good knowing that I am supporting something I believe in.

Click here if you are interested in donating to Oceana.

Is this cheesy?  Yes.

Is this shameless self promotion?  Yes.

I used to mess around with t-shirt designs when I was in college and it was never for profit, but I enjoyed it as a creative outlet.  It is fun and that is all that matters.

Here is a design that I created in about 10 minutes.  I wanted to see how Zazzle.com works, so this was my test.  It is a great site for creating custom gifts and promotional items.

The process was soooo easy.  I just put together a simple design and uploaded it.  Seriously, the whole upload process took 5 minutes.

My favorite designable item is the custom postage stamp.  Plaster your face all over it and give them out to your friends!

Anyway, this shirt can be purchased by clicking here.   100% of proceeds will be donated to Oceana, one of the non-profit organizations that I support.  It is a fun shirt for your favorite forex trader.  If I want to keep myself out of bad trades, I might create others.   Or not.  Let me know what you think by leaving a comment below.

Hope your trading is going well!

Hugh

P.S. – What is a Cambist?  Click here for the answer.