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

[Raemon]

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.

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.

[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)]

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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.

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

[Aaron Gertler 🔸]

One thing I didn’t see mentioned in the post: How an “earn-to-save” default might change the public image of EA.

It seems pretty important to the identity of EA, at least in the sense of how EA is seen by newcomers/​the public, that most of us actually donate a reasonable sum of money. The average American gives roughly 2% of their income. If a sizable percentage of people within EA are doing 1%, that seems like it could have undesirable effects on the way we’re viewed by the outside world.

High donations shouldn’t be the only strategy, and it’s plausible that they shouldn’t even be the most popular strategy, but a ton of people who joined EA did so because they were inspired by people who were living pretty frugally and giving 10% or more, even if those 10% donors might not have been behaving optimally themselves. That’s worth keeping in mind.

(Having a “save now, give later” framing would help, but would also invite questions about how much we can really be trusted to follow through on the “give later” part.)

[Kirsten]

I understand that donating 10% is difficult if you’re not used to it. However, as someone who grew up around plenty of working- and middle-class families that donated 10% or more, I strongly disagree with the claim that it’s not possible.

However, I agree that if you have high-interest debts you should pay them first, and that some people starting their careers in expensive cities will struggle. I struggled when I was making £20k in London. But then, I budgeted for giving, lived in a smaller place* than I would have, saved like 5% and gave like 8%? It wasn’t perfect, but it wasn’t impossible to give. And now that I make more, I give more and save more. I’m not sure an alternative goal would have been helpful—I guess I just would have lived less frugally.

*Edit: Room. I lived in a tiny room in Zone 4.

Edit 2: Actually, now that I think about it, I saved more than 10%, but that was because I was a temporary worker who didn’t get paid on holidays—so on balance I only really saved enough to buy a ticket back home.

[Raemon]

I do want to note that I very specifically didn’t say giving 10% was impossible – I said it was impractical as a default option for all new EAs. This is both because for some people it can hard, but more importantly because for many people I think it’s inadvisable. I think it’s much more important for new EAs to adopt plans with option value, that start building them runway.

[sdspikes]

I like the idea of encouraging people to save, haven’t given much thought to specific numbers. I think good financial planning in general is a skill that a lot of EAs seem to lack.

For myself, I went from “no disposable income” to “way more disposable income than I know what to do with” after graduating and starting my first job (Google). I had the privilege of just *not thinking about money* for several years. Mostly I saved because I didn’t actually need/​want that much, but I also did things like buying a 46″ TV without much thought—I had gotten used to a big TV at a group house, so when I moved out to a different house that didn’t have one, it seemed natural to just buy one. I didn’t budget, I didn’t look at my bank balance, I just bought it. That was fine at the time, but now that I no longer have a 6 figure salary (because I started an EA-related non-profit), I find that my default response to “it would be nice to have X” should NOT be “just buy X” anymore, and it’s been tricky to train myself out of it—though to some extent that mindset might’ve been crucial in me actually starting REACH, since I somewhat impulsively just rented out the space myself for the first few months because I saw the opportunity and thought it would be a good thing for the community. Shrug.

[Benjamin_Todd]

Just adding that we made a similar suggestion: that people should cut back their donations to ~1% until they’ve built up at least enough savings for 6-12 months of runway.

We also suggest here that people also prioritise saving 15% of their income for retirement ahead of substantial donations. If people want to donate beyond this level that’s commendable, but I don’t think that’s where we should set a norm.

[Raemon]

Yeah. My impression was that “prioritize savings and runway” had gotten a fair amount of traction the EAsphere, but it hadn’t quite hit the point where it was the obvious advice newcomers were getting.

I would note, responding to the article, that I think it’s important to have enough runway that you can live without doing things like manage an airBnB, because part of my motivation here is to make sure people can spend their runway devoting their full cognitive attention to solving important problems.

When I was broke and airBnBing to survive, the airBnB took a lot of overhead. It was worth it, but only as a backup-backup plan, not as something I’d want to be part of my found-a-startup plan.

Similarly, living with my parents for a bit was stressful, and meant that I didn’t have immediate access to my usual network for either social support, or cross pollination of ideas, or easy exposure to opportunities.

In “Taking AI Risk Seriously”, one of the important points (but buried a bit) is advocating for people to have comfortable runway, not “you can technically live off of Ramen in your parent’s basement runway.”

[Robert_Wiblin]

I largely agree with this though 12-36 months is perhaps a bit high. When I’ve told newcomers to save more and donate less, I’ve usually gotten the response that they really want to donate now because it makes them feel happier and more fulfilled. That’s because they want to do good, but don’t see an opportunity to contribute through ‘direct work’ yet, so giving is their main way to feel useful.

Inasmuch as the goal of giving now is to make someone feel good about themselves and motivated to continue, my objection is weaker. Though perhaps they should try to get that sense of accomplishment some other way while they save.

[Raemon]

*nods*

I think the way I’d phrase advice to someone who’s already excited to get started donating, is some combination of:

a) try to save at least as much as you donate. (As deluks mentioned elsethread, it is totally possible to both donate and save signficantly, so someone who’s already chomping at the bit to donate significantly can probably find the budget for both 10% donations and savings)

b) re total runway time, I think a reasonable plan of action is “get at least 6 months [comfortable] runway, and meanwhile be thinking about your potential longterm plans. A lot of people start out focused on donating but eventually find themselves wishing they had the freedom to start a project, or a join a lower paying job, so at least consider preparing for that sort of possibility.”

[laurapomarius]

On the feeling good about yourself: One way that helped me is to separate the donation money out while saving up for my runway—so I ‘donated’ 10% to a budget in my personal finance spreadsheet, whilst saving about the same percentage in my savings budget—basically committing the money to donations whilst keeping it as a backup for rainy days on my bank account. Once both budgets add up to a 6 month runway (or however long someone thinks they need), you can start donating from the donation budget (+the extra 10% each month). Personally this helped me a lot with the psychological “but I said I would donate 10%” and stopped me from spending the money on other things—whilst being able to take the donation money for runway if I would have needed to do so. The percentages might be too high for some people, but overall I’ve found this way of framing my savings quite useful psychologically.

[sapphire]

I feel like these numbers are way too low for general advice aimed at EAs/​rationalists. You don’t give any threshold at which you should shift to loftier goals. If things are going reasonably well economically you should be able to save 10% and donate 10% of your gross income. Let me give an example that demonstrates approxmiately how much you need to make in NYC to hit 10%/​10% of gross income.

A 55K salary in NYC translates to about 2970 take home after taxes and bare bones healthcare (you should also expect to get a tax rebate). This 3K salary take home is based on an actual person not theory. If you want to save/​donate 20% you can do a monthly budget of:

Rent/​Util - $1130

Donate + Save - $920

Unlimited Metro Card - $120

Living Expenses /​ Leisure - $800

800 is 200 dollars per week. It does not pay for fancy vacations but its a fine amount to buy food, clothes and go to a bar with friends. I personally spend less than 200/​week on misc expenses. I understand not everyone can get a 55K+ job. And not everyone can afford to skimp on healthcare. But this assumes you live in NYC and making 55K in NYC is fairly reasonable for many rationalists. If you live in a chepaer area your income may be less but so is the percent you spend on rent. One should not feel bad if they legitmately cannot hit ¹⁰⁄₁₀. But it is acheiveable for many people with relatively normal rationalist salaries.

Caveats:

This logic may not apply if you have dependents.

Of course choosing to donate less than 10% is different from being unable to do so. I can certainly understand prioritizing savings over donations if you are not especially financially secure.

[Raemon]

I have a few classes of response:

• My personal experience was that living on $46k was fairly difficult. You can chalk this up to “I was bad at budgeting”, but...

• I think it’s actually somewhat bad to emphasize frugality as the way new EAs approach financial problems. It incentives an approach to finance that amounts to penny-pinching over amounts that don’t matter, and not investing in things that give you additional time or multiply your power. (This is less a point against “try to save 20%” and more a point against immediately jumping to “donate 10%”). Cognitive bandwidth that you spend on “how to I make sure to meet this budget” is probably better spent on “how do I boost my income by 20k?” (or “how do I solve this problem at the high-impact org that I work at now”)

• Meanwhile, the point here is not to find something “reasonably achievable”, but something that basically anyone can do as soon as they get involved with EA. Some people are making $26k instead of $50k. Some people have a lot of student debt. Some people should be taking some time off to think, or recover from burnout, or have a lot of health care costs. Some people have housemates that randomly move out without warning and their rent suddenly doubles.

I still think the GWWC pledge is a good thing for many EAs to adopt, and I think “saving 10%, donate 10%” is also a pretty good default for anyone for whom it’s practical (this is basically what I did when I got a higher paying job). I just don’t think it works as a default.

[sapphire]

55K is, rather surprisingly, more than the median household income in NYC. 46K is 9K less than 55K. And the hypothetical person making 55K was only donating + saving 11K a year. Though I still think if you are making 46K you could afford to donate and save substantially more than 10% /​ 1% of discretionary.

The bigger crux is I want to pushback on the idea that the average individual making more than the local median household, and living in one of the richest societies on the planet, cannot afford to be generous.

[mingyuan]

I want to pushback on the idea that the average individual making more than the local median household, and living in one of the richest societies on the planet, cannot afford to be generous.

I don’t think that’s a good or charitable reading of what Ray’s saying. I think the core idea is that EAs have often prioritized giving 10% and living frugally *too* heavily, to the point where it interferes with their long-term potential. This seems like a case where the law of equal and opposite advice is coming into play—while it’s true that most people in wealthy countries could easily afford to donate more, enthusiastic new EAs (probably especially younger ones) are more likely to try to be more generous than they can actually afford, so it’s probably good to tell them to tone it down.

For example, I’ve heard from some of the early Australian EAs that when EA was just starting out they all lived illegally in a hallway and ate out of the garbage. That was probably not good for their productivity or their physical or mental health. Similarly, when I first started doing direct work I was hesitant to even spend money on food, which made me worse off in a lot of ways. Living with a constant scarcity mindset is stressful, which leaves people with less brain space to think critically, be good at their job, and figure out what needs to be done.

Bottom line, obviously Ray’s advice does not apply equally to everyone, but if you’re living in an expensive city and making $10k (like I was last year), it seems quite bad to also feel pressured to donate 10% (which I did).

[sapphire]

I feel like you are generalizing from a small sample of very dedicated EAs. In my opinion the data does not support ‘EAs have often prioritized giving 10% and living frugally *too* heavily’. See data here: https://​​forum.effectivealtruism.org/​​posts/​​S2ypk8fsHFrQopvyo/​​ea-survey-2017-series-donation-data.

The median donation percentage among EAs who reported 10K+ income was only 4.28%. The following example you give is not typical ‘For example, I’ve heard from some of the early Australian EAs that when EA was just starting out they all lived illegally in a hallway and ate out of the garbage. That was probably not good for their productivity or their physical or mental health.’.

My posts invovled a specific salary number for NYC. And the claim you quote gives a specific condition ‘make at least as much as median local household income’. Conversely Ray’s post has no numbers in it at all. You will also notice in the concrete budget I posted I included 200 dollars/​week in consumption. My stated advice does not support living off garbage.

I can support more nuanced advice that tells young or very dedicated EAs not to harm themselves in order to donate 10%. But I think most EAs should actually donate more. So I am pretty skeptical of advice that suggests donating less unless it comes with appropriate concrete caveats. And I really do think the caveats need to be concrete. Its very easy to implicitly treat luxuries as nescessary. Several people I talked to seemed skeptical it was possible to find rent in NYC for 1K (I was able to quickly point out places).

[Raemon]

Hmm. This feels like it’s reading more or different things into the post than I intended to convey.

[sapphire]

I feel like your post would be harder to misunderstand if it included some hard numbers. In particular hard numbers on income.

[Raemon]

I do think the post would be much improved if it went into details with more numbers and cases (I definitely did a low effort version of the post).

But my core point was actually subtly different from mingyuan’s, and I think the numbers that would support my point are a different sort than “how much money can people afford to donate?” (not sure which type of numbers you meant to imply)

Mingyuan’s case is one of the things I was trying to solve for. But the more important underlying claim was “it’s more important to have at least a year of runway in the bank than it is to get started donating heavily.”

(This is essentially what 80k is already recommending as Ben Todd notes elsewhere in thread. Their current post argues to donate 1% until you have 6-12 months of runway, and runway includes moving in with parents. I’d argue for a stronger claim that recommends 12-36 months and living with parents doesn’t count, but the basic principle is the same)

This obviously only makes sense as EA advice if there’s a part 2, where you actually do something with the money (be it donate, or actually use the runway to switch jobs or move cities or retrain skills).

My suggested numbers of Earning to Save weren’t an attempt to rigorously determine the optimal financial advice, they were mostly starting from the point of “we currently encourage people to donate 10%. and instead I basically think the upfront advice should switch that 10% to focus on savings until they have enough runway.”

The numbers that’d support this don’t have much to do with how much you can easily live on, and instead have more to do with “how strong are the benefits to switching careers, how likely are people to run into financial hardship, how long does it typically take to get a new job, how valuable is it to try and launch a major project or contribute to EA with direct work.”

I admittedly don’t have a clear set of numbers backing that up, but it is my pretty strong impression both from:

• Personal experience and anecdotes from friends (when I quit my job with about 6 months runway it turned out I needed 18 months and I ended up homeless for awhile, and meanwhile the rationalist houses in NYC that made good community centers only worked because someone had 50k in the bank that could absorbed roommates randomly leaving, paying upfront costs for deposits etc)

• 80k and other EA orgs changing their direction a bit. I realize we’re currently a bit in a pendulum swing back away from the talent-constraint language, but I think a core concept is still pretty important – that much of the good you can do has to do with things other than donating, and this requires more flexible messaging.

• Experience in the nonprofit landscape. My time at Agora for Good, where I was much more exposed to the broader nonprofit landscape, radically changed what I thought was important about philanthropy. AMF is basically the leftovers of the malaria landscape – the stuff that Gates Foundation doesn’t get around to. (See this comment for specifics). This has led me to think that most of the value in EA is in discovering or creating new giving opportunities that the major funders don’t believe in yet. (this is a somewhat different take on why I think EA is more talent constrained than funding constrained, and that much of the value an EA can generate has more to do with gaining skills and switching careers rather than donating)

[sapphire]

I feel like this post illustrates large inferential gaps. In my experience trying to work in EA works for a rather small number of people. I certainly don’t recommend it. Let me quote something I posted on the 80K hours thread:

80K Hour’s advice seems aimed, perhaps implicitly, at extremely talented people. I >would roughly describe the level of success/​talent as ‘top half of Oxford’. If you do >not have that level of ability, then the recommend career paths are going to be long >shots at best. Most people are not realistically capable of getting a job at Jane Street > (I am certainly not). It is also very hard to get a job at a well regarded EA organization.

Unless someone has a very good track record of success I would advise them not to > follow 80K style advice. Trying to get a ‘high impact job’ has lead to failure for every > rationalist I know who was not ‘top half of Oxford’ talented. In some cases they made > it to ‘work sample’ got an internship, but they still failed to land a job. Many of these > rationalists are well regarded and considered quite intelligent. These people are fairly > talented and in many cases make low six figures.

80K is very depressing to read. Making ‘only’ 200K and donating 60K a year is implicitly treated like a failure. We at least need advise for people who are ‘only’ Google-programmer levels of talented. And ideally we need advice for EAs of all skill levels. But the fact that our standard advice is not even applicable to ‘normal Google programmer’ levels of talent is extremely depressing.

Maybe there are talent constraints but they don’t seem to me like talent constraints that are satisfied by pushing more EAs into trying to work in EA. I think that mostly works if you are unusually talented or extremely dedicated and ‘agenty’. I do think you can probably find a way to work on an EA cause if you are willing to accept low wages and hustle.

EA is really not set up to handle an influx of people trying to work in the field. Maybe this is a crux?

[Raemon]

For completeness sake, responding more in depth to your 80k comment. (It’s plausible this should go in the other 80k post-thread but it seemed just as much part of this conversation. shrug)

Disclaimer Re: 80k

I haven’t read 80k very thoroughly and am not sure whether I endorse their advice or if my picture of their overall advice is accurate. But what advice I’ve seen does seem like it’s aiming to fill a fairly narrow set of top-vacancies. And that it does seem pretty alienating if you’re not part of their demographic.

This doesn’t necessarily mean 80k should change focus – the top career paths are still highly important to fill and they have limited time. But I do think it probably means 80k style advice shouldn’t be the only/​primary place we direct newcomer’s attention.

My own take on what kind of direct work is advisable is still a probably a bit depressing – I don’t think there are easy answers on how to help, and it’d be hard to scale across 10,000s of people.

[It’s possible 80k actually shares these views, or even that they’re listed on the website, I haven’t checked]

My take:

[edit: updated because I didn’t quite address deluks917′s points as worded]

I think the issues getting into EA Direct Work has less do with how skilled you need to be, and more to do with limitations in network bandwidth.

There is some agentiness needed to get involved, but a) I think agency is a learnable skill, b) the amount required is less than you might think.

If you can successfully get yourself into the EA network, then you can be aware of early stage projects forming. Early stage projects need a variety of skills, and just being median-competent is often enough to get them off the ground. Basically every project needs a website and an ops person (or, better – a programmer who uses their power to automate ops). They often need board members and people to sit in boring meetings, handle taxes and bureaucracy.

I think this is quite achievable for the median EA.

Early stage orgs often have neither money, or time for an extensive hiring project – people just start working together with people they know. The bottleneck is more on people knowing each other than particular skills.

But, new projects and orgs also increase the surface area of EA, adding more places for newcomers to plug into. So if you can help a budding project grow into an institution, you’re not just doing direct work, you’re helping the overall community scale.

These jobs are lower pay, sure. But that’s precisely why I think Earn-to-Save is important.

This is still a bit rate limited, and couldn’t handle an influx of 10,000s of thousands. But I think it can handle more than it currently does. And it’s definitely not because people aren’t top-half-of-oxford talented.

Meanwhile, although “being agenty enough to found a project yourself” is fairly hard, it’s learnable. The path to learning it is a bit circuitous and doesn’t necessarily fit directly into EA. But I think most EAs would benefit from taking on a complex project that forces them to grow, learning “hustle” and “networking”, etc. This works best when it’s a project you already are excited about (doesn’t matter much if it’s EA related), so it doesn’t feel like you’re making a sacrifice so much as just exploring something new and cool.

I don’t think people know if they can be agenty until they try, and I currently think it’s a better default-path for aspiring EAs to go something like:

• Start donating a bit as a credible signal

• Build up runway

• Do some projects in your spare time, practice thinking seriously about EA, and try a few things to see if some of the direct work stuff is a good fit for you.

• Depending on how the previous bit goes, do one of:

  • try a low-medium risk plan that could move you into a higher impact path, but fails gracefully (i.e. move to an EA hub for a regular job you’ll enjoy, but then explore the network there and see if you can transition)

  • try a high risk plan if you’re feeling ambitious

  • or, just try to move into the most lucrative version of whatever your default career was going to be anyway, if the above 2 options don’t make sense for you.

All three of which benefit from having enough runway to quit your current job.

[sapphire]

Great Comment. Thanks for the detailed explanation. This was especially useful for me to understand your model:

Early stage projects need a variety of skills, and just being median-competent is often enough to get them off the ground. Basically every project needs a website and an ops person (or, better – a programmer who uses their power to automate ops). They often need board members and people to sit in boring meetings, handle taxes and bureaucracy.

I think this is quite achievable for the median EA.

[Raemon]

(initial version of the above comment wasn’t quite replying to what deluks was saying – I accidentally started writing and then got tunnel vision and forgot the points about agentiness. Reworded a bit to address that)

[Raemon]

So I have a mixture of agreements and disagreements with your quoted comment (minor meta point: I recommend formatting it such that it’s a blockquote to make it easier to see which section is which)

I’ll summarize my own version of that comment in a bit (the tldr of which is “it’s not as bad as you describe it, but yeah, it’s still pretty bad”).

But I don’t think the applicability hinges on the specifics of your comment. Instead, I’d argue:

Earn-to-save is relevant to a much broader swath of people. Even if you’re just trying to Earn-to-Give ultimately, it’s still much more important to seek out higher paying jobs than to donate when you’re at at a low-to-mid-paying job. This is relevant even if you’re “just” moving from $50k to $80k.

My biggest crux here is that having 2 years of runway is important even for switching jobs at that level, and I think this should dominate even within your framework (at least by my understanding of your position).

Meanwhile, I’d make a more speculative claim which is that while yes, most people probably won’t end up getting a Direct Impact career, the people that do still have enough expected value that that early EAs should at least be seriously considering that possibility. (I very much don’t think you need to be top-half of oxford to for direct work to be better than earning to give)

[DPiepgrass]

Making ‘only’ 200K and donating 60K a year is implicitly treated like a failure.

Odd, I never felt that way while reading 80,000 hours, even though it always felt like they (and EA in general) are seeking out people who are as smart as possible and positioned to earn a lot. But if I could make 200K and donate 60K, I’d consider it a huge success!

[Raemon]

That all said, to be clear, I do also find the survey data you linked in the other comment pretty disappointing. I do think it’s often quite possible to be donating 10% and saving 10% (or more). I think this should be encouraged for people who have gotten financially situated and have a rough idea of their longterm plans.

[Raemon]

One last bit, that I realized I didn’t emphasize very hard in the OP: I’m also imagining this being pushed harder than Earning to Give is currently pushed.

The status quo is that if you ask “what do you need to do to be an Effective Altruist?” you get a murky answer, where “donate 10%” is one thing a bunch of people agree qualify, but so does working at an EA org, and maybe taking time off to learn does, and if you’re a student or poor it’s a bit ambiguous.

I would definitely oppose putting uniform pressure on everyone at an EA meetup group to donate 10% – there’s too many situations where the blunt instrument of social pressure would do the wrong thing. But I would be pretty comfortable putting uniform pressure on any EA with income to Earn to Save.

[Raemon]

(Updated the title of the post, after realizing that people who thought they agreed with me only read the headline and missed the very first point that it’s still valuable to donate at least a token amount)

[John_Maxwell]

I’m inclined to agree with this post, but...

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.

Steelmanning the opposite case:

• If you set up a charity, donations to that charity are tax-deductible. If you’re the only person donating to it, the government might consider that a suspicious tax dodge. (I Am Not An Accountant)

• Getting funding usually means that senior EAs/​domain experts are willing to sign off on your project. People who self-fund projects may not have checked whether this is the case.

[Avi Norowitz]

It’s common and fully legal in the US for wealthy people to create their own 501(c)(3) private foundations. I don’t think this is an issue.

Even for a 501(c)(3) public charity, a wealthy person should be able to donate enough to support ²⁄₃ of its budget without any legal problems, as long as the remaining ¹⁄₃ fits the IRS criteria of “public support.” And even if that doesn’t work out, it just means the 501(c)(3) may have to turn into a private foundation.

I don’t know what the laws are in other countries.

[Raemon]

Fair. I do think the underlying point of “don’t donate all your money to charity right before asking for a bunch of money for your new charity” is still pretty important. If nothing else, it should still mean that you don’t need to pay yourself.

[Aaron Gertler 🔸]

I agree halfway with Raemon, in that I think being able to pay oneself to work on a project is valuable. But I also think it’s important to get strong feedback from others that a project is a good idea before taking it too far, and grant funding is one form of highly reliable feedback. Someone trying to run a project may not know much about the landscape of other independent projects, or how promising their work is by comparison.

It does seem a bit backward to give away money hoping you’ll get others to give it back (and this process has a lot of overhead). A happy medium could be something like “I’ll pay my own living expenses, and I’ll also match every two dollars in grant funding with one dollar of my own”. This lets people be a bit biased toward their own ideas while still getting information from the rest of the EA funding landscape.

[Raemon]

Yeah, I think something similar to this is probably best.

I do think it’s often necessary, to get support from others, to initially do some self-funded /​ volunteer work to demonstrate proof of concept. But it’s probably best to get outside feedback as soon as possible.

[GeorgeBridgwater]

Thought this blog and the surrounding community would be a useful resource for EA’s. I have already shared it with a few people.

https://​​www.mrmoneymustache.com/​​2012/​​01/​​13/​​the-shockingly-simple-math-behind-early-retirement/​​

I definitely agree with Raemon that having your own resources allows you greater flexibility but I would go one step further in the aim to amass enough money that I do not need paid work. This allows you complete flexibility with your time over your remaining lifespan and can, therefore, work on any project that seems valuable, or turn down a salary for jobs at EA orgs. I am aware that EA orgs are time sensitive in terms of donations. I think, the estimated preference for immediate donations instead of 1 year on was somewhere between 10-12%. Dependent on length of time to attain ‘early retirement’ (ER) this could mean there is a higher expected value on donations over savings leading to flexibility. I think overall taking the possibility of ER into consideration is important it frames any decisions you make in the present. You can spend money now to free up time but if you save that money It will help to free up all your time eventually.

[Raemon]

Note: this is phrased as a “rally people around an idea” kind of post.

Ideally I’d have had time to break this into two posts, one of which more dispassionately discusses the benefits of prioritizing savings (which would have fit the frontpage criteria), and one of which made the more specific claim of the “give 1% save 10%”, which was a bit more arbitrary.

I think there’s some cost to jumping straight to the “rally people to your idea” stage (if everyone’s doing it it erodes the epistemic commons). I ended up doing it anyway because I didn’t have much time and found this one easier to write, but in the interest of setting a good example on the new forum wanted to at least acknowledge that.

[evanprice]

Reading this post it dawned on me that this was exactly how my experience had transpired, albeit I was completely unaware that it was happening—I saved up and left my regular developed world existence to ride a bicycle across a fair amount of the world. My experiences on the bike and the time available to think deeply (as you suggest) led me to learning about and becoming very aligned with EA. While I’m still travelling, I’m now in the phase of figuring out how best to prepare myself for future work in an EA related field, and the financial and time freedom is giving me the means to do so.

All of which is to say that from personal experience this point has proved to be incredibly influential in allowing me to transform my thinking and future plans to be aligned with EA.

[Raemon]

I definitely still stand by the overall thrust of this post, which I’d summarize as:

”The default Recommended EA Action should include saving up runway. It’s more important to be able to easily switch jobs, or pivot into a new career, or absorb shocks while you try risky endeavors, than to donate 10%, especially early in your career. This seems true to me regardless of whether you’re primarily earning to give, or hoping to do direct work, or aren’t sure.”

I’m not particularly attached to my numbers here. I think people need more runway than they think, and I think 6 months of runway isn’t enough for most people. But I’m not sure if it’s more like 12 months or 36.

...

The world is shaped a bit differently than in 2018 though. There’s more cryptorich people around. This has some impact on the strategically landscape but I’m not sure exactly how it shakes out.

I think it mostly points towards earning to save being more important. We are bottlenecked more on agency, and good ideas, than we are on money. There’s even more money now, so the main value of your money is in giving you flexibility to pursue really high value career paths.

(This might depend somewhat on how longtermist you are. Longtermism is sort of defined as ‘you think the the most important things are the things with the worst feedback loops’, and are most bottlenecked on knowledge.

...

One question is whether, if you got to pick one article to summarize this argument, you should go with my article here, or 80k’s similar article. It looks lik they’ve updated their post to say “save enough for 6 − 24 months of runway.” (The comments on this post suggest Ben Todd originally wrote “6 − 12″. I think 6-12 is clearly too little, but 6-24 seems plausible.”)

I haven’t read the 80k article in detail, but suspect it is more thorough than my post here. I do also suspect it could use a better headline/​catchphrase to distill the advice down.

I couldn’t easily find that post on the EA Forum and am not sure how to crosspost it for the Decade Review, but it seems worth considering.

[Martin_Lundberg]

Great post. I’ve been thinking and reading a bit about saving vs donating over the last couple of months and more or less came to the same conclusion. If you don’t have any substantial savings; it is most likely best to save first and donate later, for the reasons you listed.

Personally I live relatively frugally which enables me to both save 10 % and donate 10 % of my income, and while I believe the overwhelming majority of people in “rich” countries are also able to do this, people are just too used to unnecessarily expensive standards that it is not a viable pitch to have. Having donate 1 % and save 10 % as an introductory pitch makes sense to me.

I also recommend MrMoneyMoustache’s blog, which GeorgeBridgwater already linked to in a previous comment.

[aaronhamlin]

I sympathize with a lot in this article. In addition to emergency funds, there’s also retirement. I took a crack at this topic last year. Feel free to take a gander. https://​​medium.com/​​@aaronhamlin/​​practical-philanthropic-giving-using-effective-altruism-cd9636a6b014

[Aaron Gertler 🔸]

I left a full-time job and did freelance work for 2017 and most of 2018 (at about a 50% pay cut, once you account for lower tax rates vs. the loss of benefits).

I had been donating 10% at the job, but noticed after I left that my savings were a bit lower than would have been really comfortable, which led to my doing more freelance work than would have been optimal (I had to pick up a few jobs at suboptimal rates, or do work that had a pretty high energy/​distraction cost). Being able to reliably “pay myself to think” for a couple of months would have been nice; I technically had enough money to do so, but it would have cut my savings by a lot and worried my family members (especially since I hadn’t been saving money with a framing of “this is money I intend to use to buy thinking time”).

Being able to “pay myself” in this way would also have helped with akrasia; for me, there’s a big difference between “I’m living off my savings and need to be productive” and “I’m getting by on freelance work, and doing what I’m supposed to do to support myself; I guess I can take the day off of unpaid labor”.

[Gordon Seidoh Worley]

Since I’m doing direct work part-time, I view saving as a kind of donating since saving directly translates into increased flexibility for me to devote more time to direct work, and specifically on the work I think has the highest differential impact based on my own assessment of the information (to abuse terms, we might call this my “alpha”). For example, if I save enough I could stop working a full-time job while I look for funding, and in the mean time it means I can spend more effort on AI risk work without worrying too much that the impact on my day job will result in something I can’t weather. I’m not sure if I would make the same assessment if I weren’t doing direct work, though, so I’ve not thought as much about advising saving as a general strategy, although I generally prefer for myself having more runway so it seems reasonable to suggest others might also like having it.