Passionate about effective giving and financial literacy. Early retiree (a la the FIRE movement). Member of Giving What We Can. Board Member for Effective Altruism Salt Lake City. Ex-commercial real estate cities researcher and economist. Outdoor enthusiast. Creator of Yield & Spread. We teach working adults how to manage and invest their money. All profits after operating costs go tot effective charities. Learn more at yieldandspread.org
Rebecca Herbst
Karma: 256
Thank you to all those who RSVP’ed to the second part of our Finance for Good Series. Expect the workshop to be interactive, with some exercises and discussions as a group. We’re providing an optional pre-event exercise called When Can I Retire?. It’s meant to help you get a better understanding of your financial snapshot—both your net worth and your spending, and give you the opportunity to use your real financial data during the workshop. If you aren’t able to get to it, no worries, you can always explore during and after the event. See you all soon!
Excited to see this as an offering!
Wanted to share with readers of this post that Yield & Spread has added a free 1:1 coaching program for do-gooders who want to explore and improve their personal finances. We are calling for applicants in this post. If you found the FI-lanthropy calculator helpful, please consider applying.
There’s been some good activity in the Personal Finance space since this post from @NicoleJaneway ! Wanted to share with readers of this post that we have created a free 1:1 coaching program for do-gooders who want to explore and improve personal finances. We are calling for applicants in this post.
Thanks. I’ve gotten this feedback more than once so will address it!
I found this incredibly helpful. Along these lines, I’ve been searching for existing Earn to Give coaches. I know you can join the GWWC and One For the World communities and attend their events. The Life You Can Save also has a feature where you can reach out to an advisor. But i’m more so curious to know if this is a formal coaching program for making a pledge, similar to what 80,000 hours has with their career coaching program.
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).
There’s been some updated studies completed since the Trinity Study proving that you may actually be able to withdraw even more than 4% safely. And that it really depends mostly on when you retire, what your portfolio valuation is upon retirement, and what happens to that valuation in those first few years not earning active income. Michael Kitces talks about it here and here. So i still feel confident to leave the base number at 4% and if people want to change it they can.
I further clarified DONATION RATE IMPACT TO TOTAL FI NUMBER
Thanks for this. I agree that a tool like this would be extremely helpful, but frankly, extremely challenging to build. There are so many scenarios that would influence deductibility in any given year, let alone over time. And the calculator begins with entering an assumed income after taxes. Even if I were to include a line item that says % of donations that are tax-deductible, having the user accurately calculate or predict that on their own would be extremely challenging. It would also impact their income and expenses. With that said, I am also interested in these types of insights as I think they would be incredibly powerful—but just much harder to “productize” into one tool.
Updated! And yes, I left a comment on the Personal Finance for EA thread. Thank you for highlighting that other one too.
Extremely helpful commentary. I’ve updated the charts with your recommended formula per comment No. 4, and given some extra commentary around No. 2 and 3. I’ll have to give some more thought to your comments about “donating now vs. donating later” and incorporating this level of flexibility. There’s probably a few ways of doing this -- and perhaps this is best done in a separate section or separate calculator even. It also encourages me think a bit more about audience for this tool—if you are new to giving then my gut tells me something more simple will help someone get onto this path more easily...whereas a tool that is more flexible with more options for donation strategy may be better for someone well versed in this space. I think there is space for both. So again, will think on this one more. Would be very happy to chat with another early retiree directly if you are interested, @Alejandro Ruiz
Thank you! I question if the words “until I retire” is a steadfast rule or more of a guideline from the GWWC community simply because it’s easier for people to digest. I imagine it is easier to come up with a donation amount based off of your current and predicted active income, whereas it can be harder to predict that donation rate once you are an “early retiree”...which I know from personal experience as I don’t really have a true income to base my 10% on. So to me this seems more of a messaging point of friction. I guess the question then is, should early retirees continue to donate at the same rate once they retire? Or rather, should any retiree at any age continue to donate at the same rate once they retire? My perspective is this can be harder with unpredictable income, but if you can build it into your financial plan early on, then you are in a much better place to continue donating on a regular basis, even once you lose the active income. So, I’m tempted to not have the option to toggle it off, but there may be value in showing the difference in portfolio value and FI timeline. I welcome more feedback!
This is a thoughtful comment. And what you are requesting is also often missing from many FIRE calculators. Perhaps there is a simple work around to this...like including a formula that says “My salary will increase by X every Y years”. Obviously this is hard to predict, but does offer the user a little more flexibility if they assume their income will go up and want to play around with the numbers. At the same time, we are also assuming the user’s expenses remain the same, which we know is not necessarily true as well. So trying to find that balance between simple and flexible. I will think on this more. Thank you.
Hello! I was glad to see this post. I am also an advocate of financial literacy within the EA movement. I have done a couple of presentations and workshops around Financial Independence + Effective Altruism, Financial Planning Advice for Charitable Giving, and Personal Finance for EAs, and would be eager to do more and collaborate with others. I also believe this is a space that could use more attention. For example, people who very well may be able to donate 10% of their income every year only commit to say 1% because they are unsure of the math behind that decision. 1% may feel doable based on gut, but 10% based on gut is another story. There are so much to cover in this space—budgeting, investing, tax-advantaged donating, and more.
I’m happy to chat anytime and would love to brainstorm (even get a few people in the same room). I’m including some resources below for work that I have done.
Please shoot me a note at yieldandspread@gmail.com
Background on me:
I run a non profit called Yield & Spread, where I teach people the ins and outs of investing and financial management (e.g. largely influenced by the Bogleheads strategy). All profits from our courses go to The Life You Can Save’s 90⁄10 fund. I am in the process of generating more content around Financial Education and planning for those who want to donate more regularly and substantially. I retired early at the age of 32 and employ FIRE principles in my life style. I am also a member of Giving What We Can.
Resources/Presentations:
Personal Finance for Generous People presentation I did with Giving What We Can and One for The World (youtube video)
Presentation I did for the EA Consulting network (google slides, see slide 21 for giving models—bundling, donating assets, DAFs, and more)
Aaron Hamlin also has a great article to tax effective giving.
Per luke, Sebastian in the EU with https://impactivated.com/
Great to read this. Did you evaluate The Life You Can Save org as part of this process? Can you share any feedback if so?