Thanks for clarifying, Lizka. Just for clarity on what follows—I absolutely don’t think you’re thinking this through in bad faith, so I don’t want to come across as suggesting that. I do wonder if there might be some blind spots in your reasoning though, so I’m testing out the following to shine a light into those grey areas.
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On your point 1 - what if was just “before my expected natural death/in my will”? I guess my point is: would you accept that it’s reasonable to pledge to give away financial resources that you ultimately didn’t need, after they had provided you with a safety net throughout your life?
More generally: I see your reasoning here but I think my reaction is still as follows. You want financial security to protect you in various scenarios, one of which is to protect against biases. There might be other ways to protect against these biases (your point 3.c is basically my point of view, for example—you definitely could blow the whistle on your employer anyway, even if you’ve donated some portion of your income over time, although I agree that this is harder on the margin if you’re more financially dependent on your employer).
Ultimately, in each of the scenarios you outline, you’re deciding whether to donate based on how you weigh one set of benefits (e.g. avoiding bias if your employer goes rogue) over another one (donating the money effectively).
Some of your scenarios seem completely reasonable to me (e.g. “I could donate but I want to make sure I can provide financial security to my family first.”). Candidly, though, I think there is a strong whiff of motivated reasoning when the argument is something like “I could pledge to donate my money, but what if life expectancy has gone up to 150 in the future and I might need it?”, or “I could pledge to donate my money, but what if my employer turns out to be net negative and I don’t feel able to do anything about it because I didn’t keep my resources to get financial security?”.
It seems to me that if we allow this level of speculation in the justifications for not donating, we have to conclude that no one should ever be expected to donate anything, because clearly we could always construct some plausible scenario where they later regret doing that. (To put it a different way, this line of reasoning seems very vulnerable to reductio ad absurdum.)
In reality, lots of people donate 1-10% of their income, and I have never actually heard of someone who suffered significant hardship and said “if only I had not donated that money, I’d have been fine” (although NB: these people clearly could exist—I’m just sceptical that it’s true in the vast majority of cases).
For one thing, most affluent people in high-income countries spend at least 1-10% of their income on stuff they clearly don’t need. So for these arguments to be convincing, I’d also need to be convinced that you are spending 100% of your income either on essentials or on savings or investments. I have no idea about your financial circumstances, so that could be true. In my own life, it definitely isn’t true. So if I said “well, I could donate 10% of my income, but that would undermine my financial security”, this would be a false choice. I’d be better off not getting Ubers or takeaway food so often, joining a cheaper gym, drinking less wine and putting that money into savings; and donating the final 10% anyway. (Another way of putting this—people tend to theorise about this as if they are making decisions on the margin, but we are almost never, ever, ever actually acting on the margin.)
In summary, I guess every time we decide to keep a unit of resources to ourselves rather than donate it, we tell ourselves some form of justification for that. It’s just that I tend to view justifications that are second- or third-order insurances with suspicion, because they look and sound a lot like “I’m going to keep even the final 1% of my income to myself but it’s not for my own benefit, it’s for impact”.
One potential crux here is: in what percentage of potential universes should my runway be long enough? 100 percent is impossible, and 99.999999 percent is impossible too, with a possible exception for HNW individuals.
One potential diagnostic here (in general, not commenting on anyone’s particular situation): if someone concludes that they need a very high coverage runway, how much of their current income are they devoting to getting there?
If I conclude that I needed 99 percent coverage, the risk of the runway not being complete when I needed it would be significantly higher than the risk of the completed runway proving insufficient. Is the amount I’m contributing to my runway fund consistent with that risk assessment, or am I spending a lot on Ubers and takeout, nice gyms and wines, etc.? If someone who is currently earning is stowing away a large fraction of their current income into runway, that is a costly signal that they really do prioritize the risk of insufficient runway, and are less likely to be engaged in motivated reasoning when they decide not to donate much now due to runway concerns.
Thanks for clarifying, Lizka. Just for clarity on what follows—I absolutely don’t think you’re thinking this through in bad faith, so I don’t want to come across as suggesting that. I do wonder if there might be some blind spots in your reasoning though, so I’m testing out the following to shine a light into those grey areas.
-
On your point 1 - what if was just “before my expected natural death/in my will”? I guess my point is: would you accept that it’s reasonable to pledge to give away financial resources that you ultimately didn’t need, after they had provided you with a safety net throughout your life?
More generally: I see your reasoning here but I think my reaction is still as follows. You want financial security to protect you in various scenarios, one of which is to protect against biases. There might be other ways to protect against these biases (your point 3.c is basically my point of view, for example—you definitely could blow the whistle on your employer anyway, even if you’ve donated some portion of your income over time, although I agree that this is harder on the margin if you’re more financially dependent on your employer).
Ultimately, in each of the scenarios you outline, you’re deciding whether to donate based on how you weigh one set of benefits (e.g. avoiding bias if your employer goes rogue) over another one (donating the money effectively).
Some of your scenarios seem completely reasonable to me (e.g. “I could donate but I want to make sure I can provide financial security to my family first.”). Candidly, though, I think there is a strong whiff of motivated reasoning when the argument is something like “I could pledge to donate my money, but what if life expectancy has gone up to 150 in the future and I might need it?”, or “I could pledge to donate my money, but what if my employer turns out to be net negative and I don’t feel able to do anything about it because I didn’t keep my resources to get financial security?”.
It seems to me that if we allow this level of speculation in the justifications for not donating, we have to conclude that no one should ever be expected to donate anything, because clearly we could always construct some plausible scenario where they later regret doing that. (To put it a different way, this line of reasoning seems very vulnerable to reductio ad absurdum.)
In reality, lots of people donate 1-10% of their income, and I have never actually heard of someone who suffered significant hardship and said “if only I had not donated that money, I’d have been fine” (although NB: these people clearly could exist—I’m just sceptical that it’s true in the vast majority of cases).
For one thing, most affluent people in high-income countries spend at least 1-10% of their income on stuff they clearly don’t need. So for these arguments to be convincing, I’d also need to be convinced that you are spending 100% of your income either on essentials or on savings or investments. I have no idea about your financial circumstances, so that could be true. In my own life, it definitely isn’t true. So if I said “well, I could donate 10% of my income, but that would undermine my financial security”, this would be a false choice. I’d be better off not getting Ubers or takeaway food so often, joining a cheaper gym, drinking less wine and putting that money into savings; and donating the final 10% anyway. (Another way of putting this—people tend to theorise about this as if they are making decisions on the margin, but we are almost never, ever, ever actually acting on the margin.)
In summary, I guess every time we decide to keep a unit of resources to ourselves rather than donate it, we tell ourselves some form of justification for that. It’s just that I tend to view justifications that are second- or third-order insurances with suspicion, because they look and sound a lot like “I’m going to keep even the final 1% of my income to myself but it’s not for my own benefit, it’s for impact”.
One potential crux here is: in what percentage of potential universes should my runway be long enough? 100 percent is impossible, and 99.999999 percent is impossible too, with a possible exception for HNW individuals.
One potential diagnostic here (in general, not commenting on anyone’s particular situation): if someone concludes that they need a very high coverage runway, how much of their current income are they devoting to getting there?
If I conclude that I needed 99 percent coverage, the risk of the runway not being complete when I needed it would be significantly higher than the risk of the completed runway proving insufficient. Is the amount I’m contributing to my runway fund consistent with that risk assessment, or am I spending a lot on Ubers and takeout, nice gyms and wines, etc.? If someone who is currently earning is stowing away a large fraction of their current income into runway, that is a costly signal that they really do prioritize the risk of insufficient runway, and are less likely to be engaged in motivated reasoning when they decide not to donate much now due to runway concerns.