Earning to Save (Give 1%, Save 10%)

Claim: A com­mon, de­fault ac­tion peo­ple should be en­couraged to take, upon get­ting in­volved with effec­tive al­tru­ism, is “Earn­ing to Save.” Speci­fi­cally mean­ing:

  • Give around 1% of your dis­pos­able in­come (af­ter rent and ma­jor nec­es­sary ex­penses)

  • Aim to save at least 10% of your net in­come.

[Up­date: 80k es­sen­tially already recom­mends this for peo­ple un­til they have 6-12 months of run­way. So I think my claims here are es­sen­tially that: a) this mes­sag­ing should be more up­front, and b) I think 6-12 months is not ac­tu­ally enough, 12-36 months is bet­ter, and that it should be com­fortable run­way, not “liv­ing in your par­ent’s base­ment” run­way, for rea­sons listed in this com­ment)]

Longterm, if you’re not oth­er­wise plan­ning to shift your ca­reer tra­jec­tory, earn­ing-to-give 10% is still a good as­pira­tion.

But this should be af­ter you’ve made sure you’re on the route to fi­nan­cial se­cu­rity with sub­stan­tial run­way, and af­ter you’ve con­sid­ered op­tions that would re­quire you to take a lot of time off to learn a new skill, or found a new pro­ject/​or­ga­ni­za­tion.

Rea­sons I think this:

  • De­fault op­tions are good – EA is a con­fus­ing, in­tense field to get in­volved in. There’s a huge amount to learn, the best prac­tices are con­stantly shift­ing over time. It’s psy­cholog­i­cally helpful to have a sim­ple, de­fault op­tion you can take which fairly clearly com­mu­ni­cates (to your­self, and oth­ers), that you’re tak­ing EA se­ri­ously. (And then in the longterm, as you learn more you can take more com­pli­cated ac­tions)

  • “Donate 10%” is im­prac­ti­cal as a de­fault op­tion – There are too many peo­ple who aren’t ac­tu­ally in a good enough fi­nan­cial state where I think it makes sense to take on the GWWC pledge. And for many stu­dents, the pledge of­ten doesn’t make sense be­cause you haven’t yet thought through your longterm ca­reer op­tions. It’s too big a com­mit­ment, at a time when peo­ple have too lit­tle in­for­ma­tion.

  • Hav­ing fi­nan­cial slack is im­por­tant, both in­di­vi­d­u­ally and as a community

    • When peo­ple don’t have re­sources to spare, it makes it harder to take ad­van­tage of sud­den op­por­tu­ni­ties (such as tak­ing a new job, quit­ting a ter­rible job to look for a new one, mov­ing to a new city, or tak­ing a year off to study a new im­por­tant skill)

    • Hav­ing a lot of peo­ple who don’t have spare re­sources can cre­ate re­sources crunches that af­fect a com­mu­nity. Some in-per­son EA com­mu­ni­ties provide a valuable in­for­mal role of helping out mem­bers who are un­der­go­ing hard times (job lay­off, men­tal health crisis, etc). Some­times through di­rect loans, some­time through just hav­ing a spare bed­room or couch. How­ever, there’s a limit to how much peo­ple can take care of each other.

    • If you don’t have a com­fortable sav­ings cush­ion, then

      • As soon as you hit a crisis, you may need to draw upon re­sources from peo­ple around you, and if too many peo­ple need this at once the com­mu­nity can’t sup­port them with­out caus­ing down­stream stress and burnout.

      • If other EAs or peo­ple around you hit a crisis, you won’t be able to help them.

  • Many valuable EA paths re­quire tak­ing time off to think, or learn, or found a pro­ject.

    • Ex­ist­ing EA orgs are bot­tle­necked on spe­cific skil­lsets. Gain­ing those skills may re­quire tak­ing time off to learn/​train, or pay for school­ing, or switch­ing ca­reers so you can learn on-the-job (which re­quires tak­ing time to job-hunt).

    • I re­call a story [cita­tion needed?] where some­one was at a hedge fund mak­ing a lot of money. They heard about EA, got ex­cited, and donated all of it. Then de­cided they wanted to quit their soul-crush­ing hedge fund job and do some di­rect work, and started up a new pro­ject re­lat­ing to global poverty. They turned around and asked the EA com­mu­nity to donate to al­low them to do so. And… this was just the wrong way to go about it. If you have a mil­lion dol­lars, one of the whole points of be­ing able to donate that much is you can di­rect it to seed fund early stage pro­jects. If you are an early stage pro­ject, you can just fund your­self.

    • In “Critch on Tak­ing AI se­ri­ously”, I go into the pos­si­bil­ity of just tak­ing time off to think, to im­merse your­self in all the most im­por­tant prob­lems and land­scapes. Give your­self enough time to think deeply about them and de­velop a plan.

  • There op­por­tu­ni­ties to con­vert money into time or other re­sources.

    • It’s not a good place to be in, to need to penny-pinch when it comes to im­por­tant things that can mul­ti­ply your pro­duc­tivity or give you more time. Copied from “Critch on Tak­ing AI Se­ri­ously”, some ways you might want to turn money into re­sources in­clude:

      • Buy­ing a larger mon­i­tor, iPad or even large pen-and-pa­per note­book so you have more “exo-brain” to think on. A hu­man can only re­ally keep seven things in their head at once, but hav­ing things writ­ten down ex­ter­nally makes it eas­ier to keep track of more.

      • Pay­ing for cabs that gives you space to think and write dur­ing travel time.

      • Pay­ing for food de­liv­ery rather than mak­ing it or go­ing out.

      • Pay­ing for per­sonal as­sis­tants who can do ran­dom odd-jobs for you. (Get­ting value out of this took a lot of prac­tice – some things turned out to be hard to out­source, and man­ag­ing peo­ple is a nu­anced skill. But if you can put in the time ex­per­i­ment­ing, learn­ing, and find­ing the right as­sis­tant, it’s very worth­while)

      • Pay­ing for a per­sonal trainer to help you get bet­ter at ex­er­cise be­cause it turns out ex­er­cise is pretty im­por­tant over­all.

  • You might just want, you know, to have sav­ings for re­tire­ment.

  • Donat­ing 1% and Sav­ing 10% still gets you on the path to­wards donat­ing more, and putting aside money for some kind of thought­ful, se­ri­ous use.

For all these rea­sons, I think the in­tro-to-EA re­sources should em­pha­size a bit more be­ing fi­nan­cially se­cure.