8 Steps to a Life of Abundance
It’s often said that you when you give, you always seem to get more in return than you originally gave. The implication is that there’s a positive return on giving (ROG). How is this possible? I’ll explain the mechanics behind this as well as the methods to maximize your ROG so you can increase the value you receive from giving to others. My goal in sharing this information is simply to help you succeed in business and in life. This is my gift to you.
Giving and receiving can take many forms. You can give money, time, effort, information, etc., and you can receive these and more in return. Each act of giving and getting is translated from the original form into cost and value. The cost is simply the value used by the giver in order to deliver the gift. The value is the perceived value that the person receiving the gift places on the gift. For our purposes, we’ll use the term gift to mean any exchange of the many forms of value.
To maximize your ROG, you’ll need to create a value surplus using the principle of relative value and the leverage effect. Next you’ll maximize the value you receive by understanding and utilizing the giver’s take, the principle of reciprocity and by practicing gratitude. Lastly, we’ll discuss how to deal with pure takers so they don’t destroy the surplus of value that you create through your giving efforts.
Relative value is a very important concept in the science of giving. The implication is that the giver and receiver of a gift will almost always place a different value on the gift. This is true in almost every exchange. Let’s say one person gives $20 to another person. The value has to be $20 for both people, right? Wrong. Let’s say I give $20 to my 5 year old daughter. To me, $20 is an insignificant amount of money, since I have far more than that in my bank account. However, my daughter places a much higher value on the $20 since it’s a resource that is very scarce for her. She doesn’t have a job or any income, so $20 is not easy to come by.
The opposite is true as well. If my daughter were to give me $20, I would place a lower value on the gift than she did because she’s giving a scarce resource to someone who has far more abundance of the particular resource. This is how the principle of relative value works. The value of any gift is relative to the giver and receiver. To use this principle to maximize your ROG, you want to focus on giving gifts that are relatively abundant for you to someone who has a relative scarcity of that particular commodity.
The value of any gift is relative to the giver and receiver.
For example, let’s assume that you’re a popular person with lots of friends. If you were to give friendship to someone who doesn’t have many friends, they would likely value that gift much higher than your cost to give it. This creates a value surplus in the system because the value created was greater than the cost. You can practice relative value by sharing this article online. It takes almost no time or effort on your part, one simple mouse click, but it’s highly valuable to me since it spreads the reach of my message.
The Leverage Effect
To expand on the principle of relative value, we can use the leverage effect to multiply the value surplus in the system. There are instances where you’ll have an opportunity to give a gift that benefits more than one person without changing the cost of giving to the giver. With the leverage effect, the value of the gift is multiplied by each person who receives it.
For example, my oldest daughter plays in a percussion band that practices every weekend. Practice is held about 30 minutes from our home. This morning, I picked up 5 additional kids on my way to take my daughter to practice. It cost me little time to take the extra kids, since I had to take my daughter to practice either way. However, the parents of each of the 4 kids saved an hour of drive time to and from practice. With each additional kid in my car, I’m increasing the leverage effect of my carpooling gift.
With the leverage effect, the value of the gift is multiplied by each person who receives it.
Another great example of the leverage effect is this blog post. There’s a certain amount of time and energy that goes into writing something like this post. Once I have an idea for a post, I usually will do some research on the topic to ensure that I’m adding value to the conversation. Repeating something that’s been said or done many times over offers little value for the reader, so I try to have a unique approach to my topics whenever possible. Then of course, there’s the time to write, rewrite and edit the work. Finally, I have to publish the post and do what I can to market it to readers, which is the most challenging part.
No matter how long it takes to write, it costs no more to me if 1 person or 1 million people read it. Obviously the value received goes up dramatically if more people read the post and get value from it. With that in mind, I’ll ask you to share this article in return for the value you’re receiving from it. By sharing this article, you can create your own leverage effect, creating value for multiple people throughout your network. You’ll also gain value in return in the form of the giver’s take and reciprocity, which are the next two principles.
The Giver’s Take
The giver’s take is the benefit that we normally associate from giving. It’s the psychological benefit that the giver of the gift feels when they give something of value to another person. This is where the old saying that it’s better to give than to receive comes in. Often times, you can derive more value from giving than the cost of the gift. This gives you a positive ROG without receiving anything in return from the receiver. The intrinsic value of giving is real and it’s powerful, but there’s a way to magnify the effects even more.
Let’s take the simple act of holding a door for someone while going to the store. It’s a small, simple act that has almost no cost to the giver. The receiver on the other hand gets to feel valued, important and connected, which are great. Usually, they’ll respond by expressing some form of appreciation.
To increase the giver’s take and your ROG, researchers have shown that having a specific goal can increase the value that the giver gets from giving. So as I hold the door for the next shopper to enter, I’m going to say to myself that I’m going to get this person to smile as a result of this small gift I’m giving them. I would choose this goal over a more general goal like trying to make the person happy. So I hold the door and smile at the person and they in turn smile back and say thank you. Mission accomplished! I’ve just increased my giver’s take.
We’re psychologically wired to try and repay a giver, in kind for the value of the gift we received from them. This concept is covered in Robert Cialdini’s book Influence: The Psychology of Persuasion. Most of us have had the experience where someone does something nice for us or gives us a gift and we instinctively feel compelled to return the favor. Often times this feeling will nag at me until I’m able to reciprocate and offer something in return.
Reciprocity can be very powerful indeed, especially if you combine it with the principle of relative value. Let’s assume I give a gift to someone that they value far more than my cost to give. When they reciprocate, they’ll do so based on their perceived value of my gift since they aren’t aware of my cost. When I receive their gift, I’ll view it based on the value it brings me relative to the cost of my original gift. Theoretically, this could create a perceived imbalance on my part and compel me to offer another gift to balance the scales. This creates a virtuous cycle of giving and receiving, which both parties benefit from, thanks to the relative value principle and reciprocity.
Going back to my carpool example, I’ll show you how these principles can interact to create a value surplus. Each weekend there are three practices with a trip to drop off and a trip to pick up for each practice. That’s six trips and six hours of driving to be done. Each of the other five parents, who benefitted from my initial carpooling gift, reciprocated by driving one time to or from practice. This meant that I only drove one time instead of having to drive all six times. With almost no incremental effort on my first trip, I received five hours of time savings in return…and so did each of the other parents. Each of us is getting far more than we gave in this exchange.
A word of caution on the principle of reciprocity. If the intent of the giver is to create an obligation on the part of the receiver, the receiver will not value the gift and will not feel compelled to reciprocate. To truly create a virtuous cycle of giving with someone, neither party can concern themselves with what they receive from the other. As soon as one party starts doing the mental accounting of give and take, the value of the gifts between them will evaporate. So be willing to give without expectation of reciprocity and trust the other party to balance the scales.
One highly effective method to increase the value of gifts you receive as well as the giver’s take your gift giver gets is to be very thankful and appreciative when you receive a gift. By consciously focusing on the fact that someone thought of you, went out of their way and gave you something of value, it increases the perceived value of the gift in your own mind. You can make any gift you receive more valuable simply by appreciating it.
Adding to the benefit of gratitude, when you express deep gratitude to your giver, it increases the giver’s take that they get from giving. This increases the impact of gratitude, giving it the ability to expand the value of a gift for both the giver and the receiver. This increases the likelihood that the giver and receiver will engage in a virtuous cycle of giving with each other. Conversely, a lack of gratitude reduces the value felt by both givers and receivers and can stifle the future exchange of gifts between them.
You can make any gift you receive more valuable simply by appreciating it.
When you show appreciation, both you and the giver get more value from the gift. At the same time, we’ve all had the experience of giving to someone who didn’t demonstrate gratitude for a gift. Following that exchange, were you looking for more opportunities to give to that person or did you refocus your efforts on someone who was more appreciative? Gratitude is impactful in many areas of our lives, and especially in the system of giving and receiving.
There are plenty of people out there who see the world from a scarcity point of view and do their best to take without giving. They believe that what they give away is lost and what they get is to be hoarded. When they do give, they’re usually doing so with a specific purpose in mind. They’re expecting reciprocity in some way and become very disappointed if they don’t receive it.
The taker’s own behavior reinforces his/her misguided perspective, creating true scarcity. When we encounter someone, and we all have, whose primary approach is to be a taker, we tend to feel resentment and stop giving to the person. Additionally, when we sense an obligation or expectation tied to a gift, the value is reduced and the receiver may choose not to reciprocate. The taker uses this evidence as proof that it’s a win/lose world and that their Machiavellian approach is justified and appropriate.
When you run into a taker, it’s crucial to manage your risk when it comes to giving and taking. Someone who’s predisposed to giving can be a juicy target for a taker. Don’t chum the waters with generosity for these sharks to come take a bite out of you! Givers need to protect themselves and cut off takers or they’ll risk becoming takers themselves. Being a taker is contagious and so is the scarcity mentality that they embody. The lack of gratitude and reciprocity of takers can erode the generosity of givers and lead them to reduce and even eliminate giving. The better option is to quickly identify the takers in your life and refuse to engage in the exchange of give and take with them.
Steps to maximize your ROG:
1. Give to those who will value your gift the most
2. Use leverage by giving to groups of people when possible
3. Give without expecting reciprocity to prevent value erosion in the exchange
4. Reciprocate and give back when you receive a gift, to continue the virtuous cycle
5. Increase your giver’s take by having specific goals when you give
6. Be truly appreciative when receiving to increase the value for both parties
7. Avoid takers to prevent the spread of the scarcity mentality
8. Give often to keep the virtuous cycles intact and to increase the value surplus for everyone
Using these principles generates more overall value for everyone involved in your network. I’ve shown you how both parties involved in a healthy give & take relationship can receive more than they gave. This proves that you really do get more than you give…assuming you’re not approaching the exchange with a taker’s mentality.
It’s not hard to systematically get more than you give. In fact, I’d argue that the system is designed to do exactly that. It’s not selfish or malicious in any way since the goal is to increase the value surplus for everyone involved. Part of the process of maximizing your ROG is to give as much as you can without any expectation of what you get in return.
No one has ever become poor from giving. — Anne Frank
If you’ve been engaged in the self-fulfilling prophecy of the scarcity mindset, I hope you’ll try to embrace the act of giving and the abundance mindset it offers. This takes a leap of faith that I hope you’re willing to make. Just follow the steps to maximize your ROG and see how a commitment to giving can make a profound impact in your life. Tell your network that you’re a giver by sharing this article with them today!
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