A Knight With Kiplinger

To my delight, the Cornell Club of Washington ("CCW") hosted their Annual Dinner with alumnus Knight Kiplinger as the guest speaker. This was a treat because I have been an avid reader & subscriber to Kiplingers Personal Finance magazine for years! I also had the great surprise that the couple (Kim & Kevin) I mentioned on my Sunday blog happened to be at this event. Moreover, the woman happens to be outgoing CCW president! (see their photos below)What a small world.

The Annual Dinner of CCW inclusion of a guest speaker was an ingenious idea. In a club of 830 members, they managed to have more than 100 people at this annual dinner. It was a great way for membership to learn about the details of the club they may not otherwise learn about and publicly give thanks to the volunteers who give so much of their time. And through this dinner, I learned about a Cornell DC Public School Task Force that has partnered with Darmouth alums and DC area schools to offer tutoring, internships, and other programs. I was amazed by the great work that was done by this group. The club also shared an impressive statistic about moving to online membership payment system: within the first year of moving to paypal, 50% of CCW members had renewed online. My only disappointment is that I will be missing the annual Father's Day event held at the Kiplinger Farm. **sigh** It sounded like loads of fun! Ultimately, I hope that I will be able to share some of these lessons with the Cornell Club back in Los Angeles.

While Kim, Kevin and I swapped stories about the "aftermath" of the tweaker and the drummer with the crazy eyes from Sunday, Knight Kiplinger came over to introduce himself. **Kewl!** We shared stories about current projects and I mentioned my volunteer role at the Grameen Foundation. In turn, Knight mentioned his journalist interest in microfinance and writing in "a magazine" for which he's the editor.

"Kiplinger's Personal Finance Magazine, of course I have heard of it, I'm a subscriber even," I say to him. He chuckles and notes that he doesn't want to assume. I'm happy he's not one to ass-u-me... you know what that word means. Knight goes on to share that personally he is involved with Opportunity International because of its religious bent and that he truly believes this is one of the most powerful models for bringing people out of poverty. I agree. We speak about the some of the big banks who have looked at microfinance, saw the margins, and whose eyes bulged at the "potential margins" realized in this space. We agree that these commercial enterprises are failling to recognize the additional business support, literacy programs, empowerment, and most importantly the social networks that are required to make the repayment rate remain so high. Before he left, I drop two other points: (1) he should take a look at whether institutions are attempting to quantitatively measure the social impact of the programs through measurements like the progress out of poverty index and (2) encourage him to write more about microfinance including ways that people can invest in microfinance and not simply donate to microfinance. I love that I was able to drop a couple of ideas on him!

From his talk, I walked away with a few solid points that I whole-heartedly agree with:

1. Though this "Great Recession" may be the worse since the Great Depression, this does not mean that this recession is as bad as the Great Depression. For instance, our unemployment rate is not at 25% & we have the benefit of social safety net programs.
2. It's unfortunate that our society has no patience for the natural "working out" of a recession and that our politicians have felt the pressure to write whatever large checks they think is necessary to shorten this recession.
3. If our deficit requires 14% of GDP for interest payments, once we're on the other side, how will we be able to fund some of the social programs promised: education, health care, and social security? His answer: inflation and higher taxes for everyone will be a likely response.
4. Lastly, as a "forecast journalist," he sees investment grade corporate bonds are currently a good buy, high yield bonds are very good investments for total return, and real estate / LT equities are good for a long-term (meaning > 5 years) buy.

He concluded with the reminder that though the de-leveraging of the US economy could feel like a long hangover after our spending on cheap credit like drunken sailors; we have no idea what innovations will cause the next spike in our economy and we, therefore, should not short change the possibilities of human ingenuity. We will get out of this recession, eventually.

p.s. did you get the play on words in the title?