I am an over-60 EA, and one of the things that I wish that I had done when I was your age, was to have started saving up for a retirement fund that I could then use for donations in my retirement. This is because savings that is invested in growth fund can compound at 8% to 12% per year on average over the long term.
If at 19, I started saving $200/month, then by 30, I would have had over $30,000 saved away (with interest). Compounding this in a growth fund at 10%/year starting at age 30, would have increased that $30K to $30K x [1.10^35] = $843K by the time I am 65 years old. With that I could donate it and be saving $843K/($5000/life) = 168 lives.
If I knew at the age of 19, that I could have saved 168 lives by the age of 65 just by saving $200/month until I was 30 years old … I definitely would have done that.
So I would recommend that you combine earn-to-give with learning how to save a little and put it in a high-growth retirement fund. The rapid, compounded growth of the right investment fund can also grow your impact over time in ways that are similar to you developing your earning skills.
Thank you very much for that. Very insightful and something I had never thought about.
Out of curiosity, considering there is substantial evidence that the world is fundamentally getting better (I can provide sources if required, however the EA founders themselves acknowledge this), I may be able to do more potential good in the future if I save, but there also may be less people who need the help. It also provides a form of temptation, where I may be willing to take some of that money in the future. In some sense, it’s using money less efficiently to spend now, but there is also more need for it, and it’s more likely to actually do something good. Considering this, how much should I put in my savings, and how much should I give directly to charity?
If the problems of poverty and health inequality start being solved, then this should be reflected in the cost per life-saved going up over time. Because as the problem gets solved at a global scale, there are diminishing returns for new investments in solving the problem.
So the strategy would be to save while keeping an eye on the cost trends in saving a life. If it looks like the cost per life saved is increasing faster than the value of savings is increasing, then you shift the savings to donations. But as long as the rate of increase of the cost of saving a life is substantially less than your return on investment in your savings account, you will save more lives by keeping the money in the savings account and paying for the lives-saved later.
This also demonstrates that if you have low-yield in your retirement savings, then it is better to donate now to save a life rather than wait later because if the yield is lower than inflation, you don’t wind up saving any more lives. And given a choice between saving one life now and one life ten years from now, it is at least a little better to save it now.
I am an over-60 EA, and one of the things that I wish that I had done when I was your age, was to have started saving up for a retirement fund that I could then use for donations in my retirement. This is because savings that is invested in growth fund can compound at 8% to 12% per year on average over the long term.
If at 19, I started saving $200/month, then by 30, I would have had over $30,000 saved away (with interest). Compounding this in a growth fund at 10%/year starting at age 30, would have increased that $30K to $30K x [1.10^35] = $843K by the time I am 65 years old. With that I could donate it and be saving $843K/($5000/life) = 168 lives.
If I knew at the age of 19, that I could have saved 168 lives by the age of 65 just by saving $200/month until I was 30 years old … I definitely would have done that.
So I would recommend that you combine earn-to-give with learning how to save a little and put it in a high-growth retirement fund. The rapid, compounded growth of the right investment fund can also grow your impact over time in ways that are similar to you developing your earning skills.
Hello
Thank you very much for that. Very insightful and something I had never thought about.
Out of curiosity, considering there is substantial evidence that the world is fundamentally getting better (I can provide sources if required, however the EA founders themselves acknowledge this), I may be able to do more potential good in the future if I save, but there also may be less people who need the help. It also provides a form of temptation, where I may be willing to take some of that money in the future. In some sense, it’s using money less efficiently to spend now, but there is also more need for it, and it’s more likely to actually do something good. Considering this, how much should I put in my savings, and how much should I give directly to charity?
Thank you
Jack
If the problems of poverty and health inequality start being solved, then this should be reflected in the cost per life-saved going up over time. Because as the problem gets solved at a global scale, there are diminishing returns for new investments in solving the problem.
So the strategy would be to save while keeping an eye on the cost trends in saving a life. If it looks like the cost per life saved is increasing faster than the value of savings is increasing, then you shift the savings to donations. But as long as the rate of increase of the cost of saving a life is substantially less than your return on investment in your savings account, you will save more lives by keeping the money in the savings account and paying for the lives-saved later.
This also demonstrates that if you have low-yield in your retirement savings, then it is better to donate now to save a life rather than wait later because if the yield is lower than inflation, you don’t wind up saving any more lives. And given a choice between saving one life now and one life ten years from now, it is at least a little better to save it now.
Awesome. Cheers