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So you have a great idea for a new start-up company or creative project but how do you raise the initial capital? 

[tweetmeme only_single=false days more and more people are turning to their communities for grants, loans and investment. It’s called crowd funding – basically going online to ask your community for start-up capital.

The most obvious advantage of crowd funding is a cheap source of capital to kick-start a new enterprise, but there are also many softer benefits. Crowd funding helps you build a community of avid supporters who are invested in your project both financially and emotionally. As this community wants your project to succeed, they will continue to support and champion it throughout its life.

Crowd funding is fast becoming a funding solution of choice for many entrepreneurs, musicians, filmmakers, designers, social innovators and small business owners.

Here are some of the crowd funding sites operating today:

Profounder helps businesses raise money from their friends, family, communities and the general public. Each entrepreneur creates a fundraising profile, and sets-out their own investment terms based on sharing a portion of their revenues. Businesses can choose between a private offering to friends and family, or a public offering to the general public. The public offerings also have a social slant as once investors make back their original investment, any remaining revenues are donated to a nonprofit chosen by the business.

Kickstarter is a funding platform for creative projects around the world. Unlike profounder supporters do not make an investment, but rather make pledges in return for tangible rewards such as products, benefits or experiences.  It’s based on an all or nothing funding model – meaning if a project’s funding goal is not reached in the set timeframe, no money changes hands.

Indiegogo is a funding raising platform for any project or idea whether creative, cause or entrepreneurial. It allows projects to raise money, offer perks or tax deductions and even pre-sell their work. Project creators keep the money whether or not the goal is reached.

Fundbreak is an all or nothing platform for funding creative projects in return for rewards. It’s similar to Kickstarter but based in Australia.

Be sure to read the terms and conditions carefully before commiting any money.

[tweetmeme only_single=false you’re feeling the pinch of rising interest rates, looking for a way to cut-back on spending this Christmas, or just have a soft-spot for a bargain, you may be interested in the newest online phenomenon – social buying.

Harnessing the force of group buying power online, social buying sites offer steep discounts, usually between 50 and 90%, on anything from dining to hotel rooms, spa treatments, gym memberships and recreational activities.

 how does it work?

Most social buying sites work on subscriptions. This means you sign-up online by entering your email address and city, and daily deals are sent to your inbox each day.

You have 24 hours to sign-up for the offer and if enough others sign-up too, the deal is yours.  In this case, you will be emailed a voucher and your credit card will be automatically charged. However, if the minimum numbers of people do not sign-up for the deal, it doesn’t go ahead and you will not be charged.

sharing deals with friends

Social buying sites also encourage you to share deals with your friends via email, facebook and twitter. As well as helping the deal go ahead, referring friends is incentivised with sites offering further discounts, or even free deals if enough others sign-up.

 Buying gift vouchers for friends is also welcome and encouraged. So if you’re looking for discounted Christmas presents, social buying sites could be a good place to start.

social buying sites

There are new social buying sites cropping up each day. Here are a few with deals across Australia to check-out:

  • ouffer offers daily deals on a range of activities including dining, spas, concerts, sports, shows and classes. Locations include Sydney, Newcastle, Melbourne, Adelaide, Perth, Canberra, Brisbane, Sunshine Coast, Gold Coast, Wollongong, Ettalong and Auckland. If a friend you refer buys something within 72 hours your account is credited with $5.
  • Jump On It has daily deals including hair and beauty, spa treatments, dining, short breaks and experiences like horse riding, dance classes and movie tickets. Locations include Sydney, Melbourne, Brisbane, Gold Coast, Adelaide, Perth, Hobart, Canberra, Darwin, Wollongong, Newcastle, Geelong and Auckland. Jump On It gives you $10 if a friend you refers buys something within the first 72 hours.
  • OurDeal has specials on everything from restaurants, day spas and hair to concerts, sports matches, fitness sessions and adventures like scuba diving, cooking classes and wine tours. It operates across Australia in Sydney, Wollongong, Newcastle, Melbourne, Geelong, Adelaide, Canberra, Brisbane, Gold Coast and Hobart. OurDeal gives you $10 in credit for referring a friend once they make their first purchase.

If you knew you could loan someone less than $100 and it would dramatically improve their life forever, would you do it?

[tweetmeme only_single=false is what micro-credit is all about – extending small loans to the poor to allow them to engage in commercial activity in their local communities. While many poor people work hard and have great business ideas to provide for themselves and their families, they often lack collateral, and unlike you or I cannot access it from traditional lenders.

In the past this left them either with no capital or at the mercy of middlemen who charged extortionate interest rates on loans. This meant they were basically unable to lift themselves out of the poverty into which they were born. But with micro-credit, where interest is charged at a rate that allows them to turn a profit, they are empowered them to innovate and change their own lives.

Microcredit began in the 1970s when Muhammed Yunnis founded Grameen Bank in Bangladesh, providing small loans to the country’s poorest people. Grameen Bank has now loaned more than $8 billion to the poor people in Bangladesh and touched more than 40 million members and their families.

Since then thousands of micro-credit programs have sprung up around the world, inspired by the Grameen model. Many of these programs, including Grameen, favour lending to women as research has found they are more likely to use the money to benefit the whole family.

Today lending money to poor families is easier than ever before, with online micro-credit organisations such a Kiva linking lenders and borrowers from all over the world. For more information, to take a look at some of the families seeking loans, or to start lending, visit their website here.

[tweetmeme only_single=false]We all know happiness comes at a price right? Well, according to Arun Abey and Andrew Ford, not necessarily.

In their book, How Much Is Enough, Abey and Ford propose the idea of hedonic arbitrage – basically the notion of increasing your happiness without increasing your spending or wealth. This is an idea the authors have been exploring in conjunction with behavioural finance authority Shlomo Benartzi.

The basic underlining principle is that we are best off spending our limited resources on the things that are going to make the biggest contribution to our happiness. Sounds pretty simple doesn’t it?

The only problem is, when it comes to knowing what is going to make us truly happy – not just fleetingly, but over the long term – us humans tend to come up short.

This point is well illustrated by the fact that although our wealth has risen exponentially over the past 50 years, happiness levels have barely changed. Obviously, we aren’t using our increasing wealth to improve our happiness.

The good news is there are things we can do to get in touch with what makes us happier, and spend less money while we’re at it.

focus on gratifications, over pleasures

In the pursuit of happiness, leading positive psychologist Martin Seligman emphasises the difference between pleasures and gratifications. Pleasures come from external stimuli bringing immediate delight to the senses and tend to be momentary – for example, enjoying a glass of wine, listening to your favourite song or taking a warm bath on a cold day. Gratifications on the other hand involve us getting lost in activities that challenge and engage us. This could include rock-climbing, dancing, painting or playing chess.

As gratifications have a longer lasting impact on our happiness, hedonic arbitrage dictates channelling more money to these things and less to the momentary pleasures. The good news, gratifications also tend to be cheaper! For more information on gratifications, check-out our earlier post finding flow

take the eating out test

Happy, fulfilled people know what experiences they value and invest their time and money on those things. Here is a short activity to help you get in touch with what experiences you value and why.

First ask yourself which experience you would prefer and why:

  • Dining out at an expensive restaurant
  • A cheap and cheerful night out with a group of colleagues
  • Cooking at home with a handful of friends

Now try each of these experiences and take note of which you most enjoyed and why. Did your expectations match the outcome? Did your preferences have more to do with dollar outlay, ambience or the people involved?

the $50 test

Similar to the eating out test, this involves you getting in touch with the experiences and things you value most. Over the next few weeks plan three activities spending less than $50 each. This could include a anything from dinner with your partner, taking children to the movies, buying art supplies, doing a cooking class or planting a small vegetable garden. For each activity rate how happy you think it will make you, how happy it makes you immediately after and how happy it makes you a month later. What did you discover? Did your expectations match the outcome? Which activity gave you the most happiness over the long-term?

keep a happiness diary

This is similar to a keeping an expense diary but with an extra column for how happy each item makes you. Over the next week or two record everything you buy and do, how much it costs and how happy it makes you both immediately after and a month later. Now look at what you’re spending most of your money on. Does it match up with what makes you most happy? If not, why not?

Finding out what makes you happy takes time and effort, but in a world of prioritisation what could be more important?

For more information on hedonic arbitrage, or to order Abey and Ford’s book, check-out

[tweetmeme only_single=false the 48,000 Australians* who go through it each year, divorce can be devastating both emotionally and financially. But the right planning can help.

This article in The Sydney Morning Herald demonstrates how good financial planning can help you navigate your way through separation, settlement and beyond.

*Australian Bureau Statistics, 2007

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