When you look around, it’s easy to see how much need there is in our world. But how do you increase your charitable giving when life seems to be getting more expensive every year? For the past 15 years, Bob and Linda Lotich have shared their best money lessons on their award-winning blog, SeedTime and the SeedTime Money podcast. They recently wrote a book titled, Simple Money, Rich Life. Bob and Linda join the show this week to explain what led them to start giving their age, as a percentage of their income towards charity every year. Bob’s now in his 40s. And if that sounds impossible, then you’ll want to check out this episode. 

 

Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. This episode of the Maple Money Show is brought to you by Willful. Did you know 57 percent of Canadian adults don’t have a will? Willful’s made it more affordable, convenient and easy for Canadians to create a legal will and power of attorney documents online from the comfort of home. In less than 20 minutes and for a fraction of the price of visiting a lawyer, you can gain peace of mind knowing you put a plan in place to protect your children, pets and loved ones in the event of an emergency. Get started for free at maplemoney.com/willful and use promo code Maple Money to save 15 percent. Now, let’s chat with Bob and Linda… 

 

Tom: Bob, welcome back to the show. And Linda, thanks for joining the show. 

 

Linda: Yeah, I’m excited to be here. 

 

Bob: Tom, thank you for having us back or having me back anyway. We appreciate it. Can’t wait to chat, man. 

 

Tom: Well, I’m glad to have you guys on because you recently put out a new book I found very interesting. Even though I’ve known you for a while, this is something I didn’t know you were doing so precisely. You have a set program on how you decide to put money aside and give it away. Can you just hop right into it and explain what this is you’ve been doing? 

 

Bob: I’m 41 right now. Ten years ago, at age 31, we began pressing ourselves, stretching ourselves in our giving and our generosity until we decided we were going to start giving our age as a percentage of our income. We had been giving 10 or 12 percent at that point. But then we jumped up to 31 percent and we’ve been incrementally going up one percent every year since. It’s been a wild ride, man. 

 

Tom: Just right off the bat, even 31 percent, seems like a high number. You hear people saying they’re having a hard time saving 10 percent. Or, even if they’ve got that taken care of, trying to give 10 percent away to charities, church or anything like that. I hear the 10 percent number come up a lot. Even before this “growing” every year, how did you get to this point of deciding to—well, obviously you started at 31 percent because it was your age, but it just seems like a big jump. Were you giving as much before? What did it look like before that? 

 

Bob: We have been giving about 10 percent (and a little bit more) for many, many years. And to be honest, it was just one of the things where I was praying about a financial goal. I wanted to pay off our mortgage quicker. And as I was praying about this, I just sensed the Lord kind of speak in my heart—no audible voice, unfortunately, but just speak in my heart of this idea of giving our age as a percentage. To be honest, it was a big jump and it was really scary. I came home and talked to Linda about the idea. I thought she would think I was crazy, and you didn’t. 

 

Linda: I didn’t. I was kind of excited about it because it did seem crazy and I am kind of crazy. I thought, “Let’s go for it.”  

 

Bob: It wasn’t crazy, like some random thing. We actually felt like God was leading us to do this. There’s a level of comfort that comes with that craziness. That was kind of where the whole thing started. It was a big jump and it was really scary. But it was also exciting. 

 

Linda: I think in the beginning you didn’t even know if this is possible. 

 

Bob: Yeah, because mathematically, I didn’t even know initially if we’d be able to pay the bills. It was a paradigm shift, for sure. But Tom, it’s been crazy since we started doing this, some of the unique things that have happened and some of the interesting, unexpected financial breakthrough that’s happened. I’ve heard, many people say that you can’t “outgive” God. That just seems to be the case. As we just continue to give more and more, He’s taking care of us. 

 

Tom: I’ve got a few things I want to bring up here. First, you’re Christian but even starting off at 31 percent and now giving 41 percent, this isn’t all going to church, though, right? This is various giving 

 

Bob: Yeah, it’s all kinds of stuff. Any number of things. So yeah, we give some to our local church. We give to some different charities and organizations we want to support. Some of it goes into what we call a “seed” account, which is basically just a savings account designated with money ready to be given. It’s kind of like a war chest for whatever we see around us that we want to participate in. And that’s really, really fun, just having it sitting there, ready to go when a need arises. We had somebody in our community, a young mom in her mid-30s who instantly lost her husband overnight. They had two little kids. We were able to just quickly say, “Alright, let’s send some money there.” Having that freedom in that flexibility is something I think we both love. And when you are allocating such a high percentage of your income towards giving, you can put more there. It just makes it easier. 

 

Linda: Yeah. And I think this is something that’s on a lot of people’s hearts. The whole thing going on in Ukraine and Russia right now—I want to do something to help. So, when that need arises, it’s really nice to have money that’s just sitting there ready to go. It takes the stress off of our financial burden because the money is allocated for something else. Does that make sense? 

 

Tom: Oh yeah, for sure. 

 

Linda: It makes it easier and more fun. When you see something where your heart is just ripped out of your body and you know you have to do something, it’s really easy to just give. 

 

Bob: And it’s more than just $5. When we first got married, that’s what it was. We wanted to give to something and said, “Well, I think there is $5…” That was it. We were both so frustrated by that and didn’t want to be in that position. 

 

Linda: But it gives you a sense of purpose, too. It can seem like, “Oh man! These people just give all this money away…”

 

Bob: But it’s for our benefit. 

 

Linda: Yeah. It just makes you feel like you’re doing something and contributing to something bigger than yourself. 

 

Tom: I agree with that because I have given, too. Not as much, but it is nice to be able to choose a cause, provide to that and hopefully see some result from it. When you help someone out locally, that’s something you can really feel the benefit of. Sometimes it’s just going to big charities. If it’s cause you care about, that’s great. But you don’t get to see that direct benefit. I like that with you guys this isn’t just some tax write off where you give to charity and benefit later. 

 

Bob: For better or worse, a lot of it isn’t tax deductible because, like I said, it might just be a one-off thing for a local person or something like that. 

 

Tom: So tell me about the seed account. In the past, I’ve told people if it’s things like birthday gifts, Christmas, anything annual, you can save up and spread that annual cost across. Is it similar to that where you’re putting money away every month and building it up to your percentage? 

 

Bob: Yeah, it’s the same thing. It’s a savings fund. We’re just trying to fill it up with as much cash as we can so that whenever the need arises, we’re ready to go. It’s like that for any budgeting you do. When you have it sitting there, it’s so much easier. But with giving, specifically, it’s made it a whole lot more fun because it feels like we’re not even giving our own money away anymore. It’s in a category where it’s no longer ours. Then it’s just a matter of where we give it. It’s like giving someone else’s money away, which makes it more fun and easier. 

 

Tom: I like that because once you’ve put that money aside, just like the whole “pay yourself first” idea, it’s gone, mentally. It’s already hit its purpose. You said when you started doing this, it was still tight. You weren’t sure you were going to be able to pay your bills. So this isn’t a case of, “Oh, we’re doing so well, let’s give our money away.” This was actually a stretch where you weren’t quite sure it was going to work out? 

 

Bob: Yeah, especially at the beginning. Let me rephrase that… When I first had this idea in the beginning—just kind of going through it, I was really trying to do the mental math and figure out, is this going to work? Because at that point, we were trying to pay off our mortgage. 

 

Linda: Yeah, I don’t think it was the tightest position we were in. 

 

Bob: That wasn’t the tightest position. Since then we’ve come into some tighter windows as the percentage goes up. But that’s kind of what’s been so cool about it. If it weren’t for that, I think we might be a little bit too lax and loose on our spending. This has been just the perfect appropriate amount of tension so we can still live a nice, comfortable life. But we’re also not just being silly, wasting money. Otherwise, naturally, expenses rise to meet income, and we’d probably be wasting more and more money if it weren’t for that. So I think it’s been really healthy for us. 

 

Tom: I see that with the whole FIRE movement and everything too. It’s a different reason to be saving it. But if you want to actually save these higher percentages for any reason, you can do it. You skip that lifestyle inflation and everything where all of a sudden the money’s just gone. No matter what your cause is, whether it’s to give or to retire early, it definitely makes sense to just put that away and sort of forget about it. And everything kind of just works out. 

 

Bob: And it’s just crazy. You and I have both been talking about this forever, but it’s just amazing how powerful that is. Not enough people take advantage of that idea of just kind of tricking yourself. You can stretch yourself a lot further than you think, a whole lot easier than you can. Probably some people listening are saying, “That’s insane. There’s no way I could ever give 31 percent of my income.” I would have thought that two years before that—or even probably two weeks before that. But we did it, and we made it. Then we just continued to do it. And increasing one percent has been nothing because you don’t even feel that. So it’s been really easy to go from 31 to 41 percent because it’s been in one percent increments. I think we have the advantage to use that towards any financial goal, this whole one percent thing. That’s one of the things we talk about in the book a little bit. It’s just this idea of one percent, you don’t feel it. And you can achieve almost any financial goal just by doing that. 

 

Tom: Yeah, I think that’s why I’ve been focusing on the 31 percent. That’s the part that shocks me. Going up one percent a year doesn’t sound that bad.  

 

Bob: Yeah, that was like a Band-Aid really getting ripped off. Going from 10, 12 percent or 31 percent, for sure. 

 

Linda: It was a radical move for us, but we were both committed to it so it worked. 

 

Tom: Linda, you mentioned the mortgage. There was still a mortgage at the time when you guys did this? 

 

Linda: Yes. And Bob had a very specific plan in place. 

 

Bob: I wanted the thing paid off, Tom. 

 

Linda: Let’s do this, let’s pay it off. What we thought was going to just totally mess up our plans, was just interesting. I think your plan was what like two or three years… 

 

Bob: It was three to four years. It was going to take that to get our mortgage paid off at that point.

 

Linda: Before we were giving 31 percent. 

 

Bob: Before we were giving that percentage. And that’s the crazy thing, Tom. We ended up paying off the mortgage in 10 months, not 10 years. It was one of those moments where I thought, the math on this just doesn’t make any sense. It’s as if us, being really generous was like God saying, “Hey, I’m going to help you out.” So, yeah, it was really pretty fun to watch how that played out. 

 

Tom: Well, I remember you gave me similar advice privately. It was along the lines where if you just do what feels right, it kind of just works itself out. Not everybody listening to this is going to be religious, but if they want to call it karma, or their secret… I don’t know. When you’re doing good things, it does seem to work out. I don’t know how to explain that. 

 

Bob: Yeah. From my vantage point, I think it’s God. But at the end of the day, I think even outside of Christianity, there are a lot of different places and realms in the world where you’ll see this pattern over and over again. 

 

Tom: Did you expect that at the time? Did you think, not only can we do this mathematically, but something better will come from it? 

 

Bob: Yes and no. I think I hoped that because this was a big sacrifice and I hoped it was worth it. But paying off or mortgage in 10 months after that? Never in a million years. To me, we were laying down the idea of paying off our mortgage in order to give. And I wasn’t expecting that at all. 

 

Linda: I think the same. I thought something interesting would happen, but I didn’t know what. For it to just speed up, and all of a sudden it’s 10 months later—not even a year later… We hadn’t even gotten to raising it to the next percentage up and we were sitting there with a paper that says your house is paid in full. I remember we took a picture with it, thinking, this is just ridiculous. It felt ridiculous to us. I had never lived in a paid-off house before. I didn’t even really know that that was possible, growing up. So, for us to even have those conversations at all… Bob said, “We are going to pay off this house!” and I thought, “Okay, cool,” but I didn’t actually think it would happen. So, for it to happen so quickly was pretty mind-blowing. 

 

Tom: Now, as I think of this percent, 31 to 41, do you have an end goal in mind? Are you going to be 80 giving away 80 percent? And what do your kids think of that? 

 

Bob: No, I don’t think they’re old enough to be offended by that yet. 

 

Tom: Yeah, but at that point, they might start to care. 

 

Bob: Yeah, you might be right. We don’t have an end goal. I mean, maybe I do. Maybe I want to be 90 – 10 if I have to pick an end goal. We’re not going to be a slave to it. We’re going to take care of a family if it comes to that. But I’d love to do this for the rest of my life. I just think it’d be a really, cool way to live. I kind of like the pattern. In terms of our kids, I very much subscribe to Warren Buffett’s philosophy on giving money to his kids which is, to give the kids enough to do whatever they want…

 

Linda: … But not enough that they don’t have to do anything! 

 

Bob: We’ll leave money for our kids but I don’t feel like we have to leave them tens of millions of dollars. I want to give them enough to give them a head start. I’ve seen some people who are given too much money at a young age and it actually really hindered them, preventing them from becoming what they could have been and how they could have impacted the world. And so, obviously, we don’t want to do that. Those are problems are solved down the road, though.

 

Linda: Also, they won’t know any different. We’re just going to tell them, “This is what you get. That’s it! We’re cutting you off!” (Laughs) 

 

Tom: I have the same thoughts too with my kids where I don’t want to pay for their entire education or anything like that. If I can give them a decent head start, great. But there’s something to be said for working for things and earning them so. 

 

Bob: It feels better. It just feels right. 

 

Tom: You’ll be giving them something by not giving them money. So if someone wants to do this, can we break it down in a way they can do it? Maybe someone’s not really giving much right now at all? Where do they start? 

 

Bob: Well, that’s why we wrote the book. The whole point of the book just goes through everything we did to spend smarter, reducing our expenses to kind of free up some capital, but then also to increase earnings—the making money side of the equation. How can we earn more by combining those two forces to be able to give a higher percentage? That’s ultimately the goal of what we’re trying to do with the book. One of the best places to start is just reducing expenses. Be a little smarter about how you’re spending. There are a million knobs to turn here, Tom. But I think that’s one of the best places to start. 

 

Linda: I think breaking it down even more so. If somebody just wants to start giving more, and they’re not ready to go through the whole book—because it’s kind of a lifestyle change, right? Honestly, for us, starting a budget category of “giving” was a huge game-changer because it all of a sudden took this money out of our hands, out of our grocery money, clothing money or, whatever and put it in this separate category where it was no longer ours. It was specifically purposed to give away. That was like a really quick, easy take-away. 

 

Bob: Well, one of the things I would add to that, too, that really helped us a lot is, that we began tracking what we call our “net” given. It’s a play-on of the net worth thing. Our net given is basically a running total of all that we’ve ever given. If it weren’t for that, we wouldn’t even know how much we’ve given away. And that’s been really fun. 

 

Linda: And extremely motivating. 

 

Bob: Just to have a running total, tracking that. So, instead of being obsessed with our net worth number going up which is fine. I have no problem with people growing their net worth. But I figured, why not be focused on this “net” given number since that’s so important to us. That way we can track our progress there in how much we’ve actually given. I think if you combine those two things, it makes giving a whole lot easier, a whole lot more fun and will take anybody to the next level in their generosity if they want to grow in that. 

 

Tom: You’ve mentioned, the local people that you’ve helped and such. Are there any regular charities you have set contributions within? Or is it all just sort of random—where the need is? 

 

Bob: It ebbs and flows. We have somewhere from five to 15, depending on the season of auto contributions to organizations we’re supporting financially. 

 

Linda: So, you think about like sponsoring a child or something like that. It would be stuff like that. 

 

Bob: We have a handful of different auto-contribution ones, stuff like our church, which is just a monthly thing. There are a variety of different things. 

 

Tom: Hopefully, you’ll know this because I can’t think of what it is right now, but there’s a website where people can check charities. Have you used that?

 

Bob: Charity Navigator? 

 

Tom: Is that it?

 

Bob: That’s probably the biggest one. I think there’s a handful. That’s a great one to just kind of see the efficiency of a charity. I’ve used it from time to time. 

 

Tom: I was pretty disappointed when I saw some of them. It’s definitely worth checking and not just giving money just for the sake of feeling good.  

 

Bob: I’ve got to tell you a story because it’s just—I mean, it’s sad. This was right out of college. Or maybe I was in college, I can’t remember. But I was looking for any kind of temp job. I was searching the classifieds and found this marketing position. So I go and end up being this, crazy, off-the-wall, multilevel thing. I get in there and they say, “Alright, you’re going to come with us for the day.” So we go to a store, set up a table, and sit down. They’re selling teddy bears for charity. I’m sitting there all day long working for free (as my job interview) selling these teddy bears for charity. I’m telling everyone that I’m selling them for charity. And at the end of the day, some random customer walks out and says, “What percentage goes to the charity?” And the guy said five percent of the $20 teddy bear goes to charity. They’re sitting there advertising it as a charitable contribution. 

 

Linda: That is awful! 

 

Bob: Anyway, my point is, there are some very inefficient organizations you can be giving to.  

 

Tom: So, this guy basically just had some shady, side hustle going on that happens to give away five percent and called it a charity?

 

Bob: Well, yeah. And I worked the entire day for free for him as my job interview. as 

 

Linda: But that’s because you thought you were doing it for charity. 

 

Bob: And at the end of that day, I thought, “I’m out of here!” This was the biggest waste… And the guy says, “I think we can offer you a position,” but I say, “I’m not coming back, man! This is insane.” 

 

Tom: So you learned earlier on than most, just how worth it is to kind of vet these?  

 

Bob: It’s worth paying attention to, that’s for sure. 

 

Tom: It blows me away because like I’ve seen more legit charities that are just so high in admin fees where I could say the majority isn’t going to the actual purpose. In that case, it’s probably not worth giving to. 

 

Bob: Yeah, it’s a tricky thing because there are certain things that it requires for a large organization to make a dent in whatever the problem it is trying to solve. Whereas, if it was just you giving me $100, I wouldn’t be able to do anything. Maybe it’s because it’s legislative— There are different things beyond the realm of a really small organization and that’s where it gets tricky. I’m not an expert. I don’t know what that is and which ones there are. But my point is, I think there are some charities that might legitimately need have higher admin fees so I don’t think that’s a reason to rule all of them out. But it just needs to be sorted through and thought through, I think.

 

Linda: We watched a documentary called, Poverty Inc, which was really eye-opening.  

 

Bob: Poverty Inc, for me, is a documentary that shows how a lot of the charitable donations people are making, particularly from the West, are not necessarily helpful. It actually might be hurting the local economies. It’s very eye-opening.  

 

Linda: It’s eye-opening because you hear about these different organizations and think, “That’s great, let’s do that. Let’s just give to these people,” and what it ended up showing is, if you’re just sending food to this community, the farmers have no incentive to grow anything because they can’t sell anything because all these people are getting stuff for free. It’s actually tearing down the local economy. It’s just eye-opening to me because there’s such a desire to want to help and to want to solve world hunger. But if we’re going about it the wrong way, then it’s not actually helpful. 

 

Tom: So it’s more than just an expense ratio. It could be seeing what they’re actually doing and how that works out long-term. 

 

Bob: I just heard Elon say this the other day. I’ve heard Bill Gates say this… it’s really, really difficult to give money away efficiently. In our case, at our scale high, it’s probably not that big of a deal. But in the case of somebody like that, in the many billions of dollars that they’re going to be giving away, I’m sure that’s an incredibly difficult task to do, and do in a way that’s actually effective. And not just sustaining and holding up organizations that are not even actually doing anything. 

 

Tom: When you mentioned that some of them might need higher expenses, I thought of things you see advertised a lot like UNICEF and such. Now, I don’t know what their rate is so I’m not calling them out. But, I’m thinking, if you’re putting all this marketing in, do they end up with a worse ratio? Yes. But say, 50 cents, gets to the actual need out of a dollar, that’s probably still better than nothing (if they if they weren’t doing all these television ads and stuff). There is something to be said for things like marketing for your charity. I guess you just want them to be as efficient as possible. But in the end, it’s still better than zero. I guess you’ve got to weigh it all. 

 

Bob: It’s frustrating to me just knowing that some organizations have this cycle of saying, “Alright, we spend all of our money on marketing so we can bring money in so we can spend it on marketing…” It’s just this big loop where you surmise, is that all you’ve come to now? Your entire organization is just about marketing, to throw all these events so you can raise more money for marketing? I want to see more organizations with more feet on the ground doing the actual thing. 

 

Tom: It’s like a really thin margin business that just happens to have something left. They’re not quite near your teddy bear guy. These are legit, it’s just how they’re run. What other advice do you have for someone that’s looking to do this? Obviously, your books got a lot of information. What can they do and how do you see this benefiting them? 

 

Bob: You know, it’s like anything else. I always tell people, there’s never a right time to have a kid. You never feel financially ready to have a kid. And I think it’s the same thing with stretching in generosity. If you’re waiting around until you have a lot of money to be able to give, you’re just never going to get there. That’s my encouragement. If someone is feeling just a little tug or a nudge and wants to stretch a little bit in this, I would say just go for it. Because you’re never going to feel completely ready. It’s never going to feel super easy. And I think that’s okay. That’s part of it. 

 

Linda: Again, it’s that idea of the sense of purpose and the sense of helping either someone or a group of people—just being part of a larger story rather than just ourselves. I just think there’s so much to that and it brings so much joy, satisfaction and fulfillment. 

 

Bob: The reason we continue to do this is more than just the rhythm and routine of it. We actually really enjoy it. Some of the greatest highlights from our life are stories of generosity that we got to be part of. Depending on how you spin it, there’s almost a selfish motivation here for us. We get so much out of it and enjoy it so much that we continue to do it. Does that makes sense? 

 

Tom: For sure. On this podcast, (in past episodes) we’ve talked a lot about FIRE,  emergency funds and the importance of savings so thanks for giving people some motivation to look at another line on their budget and what they can gain from that Can you let people know about the book and where they can find you online? 

 

Bob: The book is called, Simple Money, Rich Life. It should be anywhere you can buy books. I think at simplemoneybook.com you can grab it too, if you’re interested. We’re at seed time seedtime.com and @seedtime on Instagram and all that stuff. We’re doing a podcast, SeedTime Money—all good stuff. So yeah, come hang out and say, hi.

 

Tom: Great. Thanks for being on the show. 

 

Bob: I appreciate it. Take care. 

 

Linda: Thanks, Tom. 

 

Thank you, Bob and Linda, for sharing a fresh perspective on giving and for showing us that anything is possible if you take a leap of faith. You can find the show notes for this episode at maplemoney.com/192. If you have a moment, head over to our YouTube channel and subscribe there as we’ll be getting back to releasing never-before-seen content, soon. Search for Maple Money or go to maplemoney.com/youtube and subscribe today. Thanks, as always, for listening. We’ll see you next week.