Consider Financial Independence First
Over the course of your working life, you will earn some amount of money, spend some amount of money on yourself (and those close to you), and spend some amount of money and time on strangers. EA is about figuring out how to deploy the time and money we spend on strangers effectively. And as a movement of mostly young people, there is a tendency to start devoting time and money to strangers early in our careers. I want to suggest that this is often a mistake – that many of us should front load the money we spend on ourselves, by achieving financial independence first, by which I mean having enough savings that you could live off of it indefinitely, and then earning to give or doing direct work in an EA cause area.
This is the strategy I am pursuing. I got interested in EA a couple of years ago during the pandemic, about the same time I was moving towards a new career in software engineering. I’ve been a software engineer making low six figures for about a year, and I’ve been putting about half my income towards my current expenses, and half towards financial independence1. After I reach financial independence, in something like five years, depending how the markets go, I expect to either earn to give (which I will be well set up for), or find direct work mitigating existential risks. Either way, learning about the various existential risks and mitigation strategies, and the people and organizations working on them, will prepare me to do that when the time comes.
Some of my reasons for pursing financial independence first are selfish. I’m starting my third career in my mid thirties – I want a feeling of material security, and I’m not going to get it from an employer. I want the lower level of stress and anxiety that I expect I will have when I can pay for my rent and groceries on my own, regardless of my employment. I want the freedom to pick a low paying job, or even an unpaid job, over a higher paying but less meaningful job, without worrying about the impact on my lifestyle. I want the freedom to leave a job if the boss I love gets replaced by a boss I hate, without having to ask whether I can afford it. And it’s ok for an EA to make decisions for selfish reasons like this. EA doesn’t have anything to say about how much money anyone should donate or how much time anyone should spend altruistically. EA only tries to answer the question, after time or money has been committed to strangers, how to deploy it effectively.2
Other reasons for pursing financial independence first are altruistic. If your altruism is of the earning to give variety, then achieving financial independence first allows you to donate the entirety of your post-financial-independence salary. Over the course of your life, that means donating more total dollars. If you believe that lives saved in ten or twenty years are as valuable as lives saved today, and that dollars donated in ten or twenty years will not be too much less effective than dollars donated today, then this means doing more good.
If you hope to work directly in an EA cause area, the accounting is much less obvious, but the conclusion may be the same. The early part of your career, particularly the first few years, is when you have the least skills and the most to learn. I spent quite a bit of time in training at my current job, where I was gaining skills but at a net cost to my employer. So the altruistic cost of working outside EA is at its lowest at the beginning of your career. And the altruistic benefit from building skills faster working outside EA may be worthwhile. Often it is easier and faster to build skills in a large, established organization, compared to a newer smaller startup-like organization. EA organizations are universally of the smaller startup-like variety. None of them are on boarding tens of software engineers each month and providing a systematic training process, as my company does. None of them, to my knowledge, can provide extensive mentorship from people with decades of experience, as I am receiving. If you spend the first two years of your career working outside EA in a place where you can build skills faster and better, you will be more effective in your third year.
Perhaps more importantly, if you are working in an EA cause area, and your employer loses a grant or something, and can’t pay you anymore, what then? If you depend on that paycheck to pay for your rent and groceries, then you have to stop doing the EA work and go get another job to pay those bills. If you have financial independence, you may be able to keep doing the EA work.
In either case, financial independence first also has an advantage in having the flexibility to have an impact when circumstances, yours or EAs, change. For example, if you’d asked me two months ago, I would have told you I wasn’t going to donate any of my own money this year. I was going to do some volunteer work, and get my employer to match that with a donation to CEA3, and that would be most of my impact this year. Then two things happened. Firstly, my circumstances changed—I failed to actually do enough volunteer hours. Secondly, EA’s circumstances changed – FTX collapsed, and with it much of the money that EA expected. So I ended up donating to two different EA aligned organizations, in the hopes of dampening the funding shock from FTX and getting my employer to match my donation dollars with a donation to CEA. If I’d been doing something else, full on earning to give or EA work, I would not have had the flexibility to help dampen the funding shock when it came. And funding shocks are bad, even beyond the actual number of dollars lost.
Finally, some caveats. Even if pursuing financial independence first, it is probably worth donating a nominal amount each year, just to have the experience. I didn’t do this, and so I was unprepared, on both a theoretical and practical level, when I decided to donate a couple of weeks ago. On a theoretical level, my choice of who to donate to this year was driven largely by what organizations were already on my radar screen. I think I ended up with some good ones, but if I had been thinking about this all year, I might have come up with something better. On a practical level, I got the timing wrong, in the sense that I did not have the letters documenting my tax-deductible donations in time to submit them to my employer for the matching donation4. If I had had the experience of donating before, I might have gotten the mechanics of it right.
An additional caveat, obviously none of this applies if your timelines are short. If you think that an existential risk of some kind is likely to get us in the next five or ten years, then go work on that. While I do worry about existential risks, I think most of the risk is ten or more years out, so I think there is time to get to financial independence and then have an impact.
1I include in financial independence things like paying down debt and tax consequences of certain financial moves.
2“Effective altruism, defined in this way, doesn’t say anything about how much someone should give. What matters is that they use the time and money they want to give as effectively as possible.” https://www.effectivealtruism.org/articles/introduction-to-effective-altruism
3I chose CEA simply because when my employer makes a matching donation, it must be to an organization on their pre-approved list, and CEA is the only centrally EA organization on that list.
4I ended up submitting the matching donation request to my employer without the proper documentation, and it got approved without issue, but that was luck.
Another reason to first secure financial independence is to mitigate conflict of interest risks.
If one’s ability to provide food, shelter, and healthcare—to themselves / loved ones—depends on whether they’re doing/publishing impressive things about anthropogenic x-risks, they can easily end up doing impactful, net-negative things (due to being biased / self-deception).
Even without conflicts of interest, complex cluelessness is a common phenomenon in the domains of anthropogenic x-risks and meta-EA (due to an abundance of crucial considerations). It is often very hard to judge whether a given intervention is net-positive or net-negative. Conflicts of interest can thus easily influence decisions catastrophically.
On the other hand, advocating for many people to secure financial independence and then go work independently in anthropogenic x-risks domains can exacerbate the unilateralist’s curse problem and make coordination harder. (Relative to a situation where there are few EA orgs that employ those people.)
I’m going to disagree, and suggest a modified program that I think is more compatible with norms in effective altruism, for two reasons, on substantive, one social. Of course, people can do what they want, and I’m certainly happy to hear that people plan to give later, rather than not giving at all.
But first, the modified program I’m suggesting is to take a giving what we can pledge, and donate 10% of your income, and then dedicate the rest of your disposable income to FIRE. This will lead to a slower achievement of financial independence, but is fully compatible with EA goals and norms, instead of requiring “special dispensation” to do FIRE. Again, there are two reasons I think this is a better plan.
First, I think that those who want to cultivate a norm of caring need to address the immediacy of global needs. Whether you are interested in mitigating global catastrophic risks, or interested in global human welfare, or reducing animal suffering, all of the problems are urgent. The difference between achieving full financial independence in 15 years versus 20 is far less than the difference you make by donating—that’s the entire point of EA. And if you in fact plan to continue working to donate after you achieve financial independence, and to donate even more than 10% to EA causes, you can do this regardless of whether this takes 15 years or 20 to manage. But if you aren’t saving lives or reducing suffering now, you lose the opportunity to affect things in the meanwhile, and for anyone earning a significant enough income to be able to retire in a couple decades, I don’t think that this is an unreasonable tradeoff.
Second, there is a problem that culturally, it’s hard to stay involved in EA without actually doing the things EA suggests. Value drift is common, and problematic, and involvement in the FIRE community is great, but it certainly isn’t reinforcing any of the EA ideas. The immediacy of the giving pledge and the engagement with the community is a mentally healthier way to engage with the problems you care about. Of course, people can and will do what they want. But “I’ll give once I’m comfortably able to not worry about retirement” is a very easy slippery slope to slide down, and the uncertainties of the future will always provide easy justification for waiting longer.
David, how do you reconcile your implication that there is a norm to get a “special dispensation” from with CEA’s claim that EA “doesn’t say anything about how much someone should give”?
EA as a philosophy doesn’t suggest any specific giving level, but there is a community norm of 10%.
Pursuing financial independence first assumes that the world and financial markets remain stable for long enough for you to achieve it. What basis do you have for that assumption though? Or for your assumption that most x-risks are ten years out? It’s possible that climate change, for example, is accelerating and may lead to civilisational breakdown before then. The possibility of nuclear war has also increased recently. These are only two of a whole host of x-risks we face. A better option, therefore, might be to adopt what Taleb calls a barbell strategy: to devote part of your time to achieving financial independence and the rest to working directly on existential risk mitigation. Putting all your eggs into the one basket of ‘achieving financial independence’ does not seem rational to me in view of our current complex and interconnected risk landscape.
I was FIRE before I become EA. My original plan was to do exactly what you suggested and reach financial independence first before moving into direct work. However, depending on what field you want to move into, it’s also possible to make decent money while doing direct work as well—once I found that out for AI alignment, I decided to go into direct work earlier.
That said, I definitely agree with some of your claims. I donate 10%, and am not currently intending to donate more until I have enough money to be financially independent if I wanted to. I’ve taken a pay cut, but I am still actively saving money towards my goal—just expecting to hit it slower. (Which is fine, since I’m not planning on retiring early any more)
In addition, full financial independence requires ~25 years worth of investments. You may not need that much, but having even 5-10% of that gives you an absolutely enormous runway in case you want to try something new, your grants run out, and so on. There’s a huge difference between no runway and a year or two of runway, so I definitely think that doing this early on is a good idea. Also, you know that way that you can make money outside the EA ecosystem, which is important—EA is still a very young movement. It’s gotten a lot of momentum, but I wouldn’t recommend anyone commit to a course of action where you have no useful skills if EA dies out in 10-20 years.
I believe there is a world in which you can pursue both FIRE and regular donations starting today. Assuming you are financially secure and actively working towards FI, I believe that one can take a pledge today, and still donate their estate upon their old age or death. And that these two acts of giving are not mutually exclusive. Per @Davidmanheim comment “it’s hard to stay involved in EA without actually doing the things EA suggests”. I agree that building this uphill habit up today is important so that it grounds you to give your nest egg tomorrow. I’m deeply interested in this space, and recently created this “Fi-lanthropy Calculator” per this EA Post. It allows people to explore their options of giving today vs. tomorrow in line with their timeline to FI.
Else, on the whole, I agree and think all EAs (and most people) should make FI a priority in order to assure their security and comfort in old age. (I genuinely don’t like the term RE as much because it involves negative connotations).
Strong upvote! Did you see this recent comment thread about FIREA (Financial Independance and Retire EA)?
I’d be excited to see a community of EAs focusing on high saving rates for later donation or direct work. Would you be interested in being around on a Discord for that if I set it up?
At the higher earning level (FANG SDE’s) a consideration to keep in mind is that in the US only 60% of income can be written off as charitable giving each year.
The US and CA Gov takes ~43% percent of your income each year in taxes so it may be a better idea to spread out giving over as many years as possible to bypass that.