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The Trader Who Donates Half His Pay
51–60 of 193 posts
Re: The Trader Who Donates Half His Pay
#52I think that this is great! Here's an idea, and one that may already be implemented (please tell me if you know that it is and who is doing it): One could set up a charitable nonprofit that uses HFT systems to maximize the growth of donated assets before sending them off to other charitable organizations. Investors would be able to influence where the money is donated at the end of the day. In a sense, use the "easy…
Those HFT traders profit from the clumsier pension funds and other similar funds. e.g. algorithm detecting a broker, on behalf of a fund, is buying some stock with one batch per hour, so front run them. They are profiting from teachers and the elderly. I suppose at the end of the day half of the resources lost to those two groups are given to the even more worse off, albeit giving charity administrators a cut.
Not that this is exactly how the middle class has been decimated, but nice illustration.
Re: The Trader Who Donates Half His Pay
#53This may be an unpopular opinion, but I've always felt it selfish when people of means partake in 'aid trips' over sending money to an appropriate organization. If you care to help, leverage your abilities efficiently; make the money doing what you're best at, and let others administer the aid.
Since he's in the financial business, I'm wondering why he isn't leveraging the effect of "money makes more money" before donating. Isn't it better to invest that money first, before donating it? Take for example Bill Gates. If he had donated all his "surplus" money instead of building a business, he wouldn't have been able to donate the amount that he has; the amount wouldn't even be of the same order.
There's the obvious counter-argument about not being able to guarantee that investments will increase in value, but I think the more compelling one is that it's an especially useful time to be donating. According to the UN:
> in 2011, 17 percent of people in the developing world lived at or below $1.25 a day. That’s down from 43 percent in 1990.
It seems worth pushing to nearly-eradicate this "extreme poverty" now, rather than waiting another 20 years and doing something that would likely have a lesser effect on suffering.
Re: The Trader Who Donates Half His Pay
#54I talked about this on HN a few years ago, but my friends and I planned to be this guy. In college we talked about all the money we'd make and how much we'd be able to donate. We all had a job offers for $32 - 42k/year. That was amazing! We were living on less than $1k/month in college. We had plans to give away 20%, 30%, or 50% of our income. We would barely even notice. Some of us even managed to do it for a few ye…
The muscles you use for giving are the same muscles you use to save or pay down debt.
Know what your expenses are and how much you are spending. Know which of the things you spend money for are really important to you, and what you wouldn't actually miss that much. Know how to keep your spending in check as your income grows, not just increasing spending because the money is there.
People tend to react emotionally to the teachers of these principles, like Dave Ramsey or Mr. Money Mustache. But it's not personal. It's just math. You can choose to cut way back on your spending if you want to retire really early, if that's what's most important to you. Or you can choose to spend more extravagantly and retire later (or not at all).
Or instead or retiring early, maybe you want to live really frugally but keep earning as much as possible, so you can give as much as possible. The underlying principles are the same.
Re: The Trader Who Donates Half His Pay
#55Earlier quoted context omitted.
What I find most amazing is when bright Ivy League graduates go and do manual labour, like building a school, in a poor country with massive unemployment. It's not exactly playing to comparative advantage.
Human beings are not absolutely focused, money-seeking, rational economic actors.
Thank the heavens for that.
Re: The Trader Who Donates Half His Pay
#56From the article:
> First, where do we draw the line? If we’re prepared to donate one-third of our incomes to maximize happiness, then why not two-thirds? Why not live in a tent in a park so as to be able to donate 99 percent and prevent even more cases of blindness?
This is an area where the writings of Scott Alexander (Slate Star Codex) have been really helpful for me. He refers to this as "Infinite Debt" (http://slatestarcodex.com/2014/05/10/infinite-debt/):
"For years, I felt like I was probably ethically obligated to give all my income to charity, minus whatever I needed to survive. And the fact that I obviously wasn’t going to do that made me not give anything at all.
Once someone told me that my obligation wasn’t infinite, but just some finite amount like ten percent per year, every year, I was thrilled to be able to comply.
And of course there are people who make fun of this. “Oh, you really think you can just give an amount you find “convenient”, then feel like your conscience is clear and you can stop caring and be smug and self-satisfied?”
The proper response to this person is to ask whether they give so much as ten percent.
(“What? No, why should I?! I do my part by yelling at you!”)"
Re: The Trader Who Donates Half His Pay
#57I think that this is great! Here's an idea, and one that may already be implemented (please tell me if you know that it is and who is doing it): One could set up a charitable nonprofit that uses HFT systems to maximize the growth of donated assets before sending them off to other charitable organizations. Investors would be able to influence where the money is donated at the end of the day. In a sense, use the "easy…
Those HFT traders profit from the clumsier pension funds and other similar funds. e.g. algorithm detecting a broker, on behalf of a fund, is buying some stock with one batch per hour, so front run them. They are profiting from teachers and the elderly. I suppose at the end of the day half of the resources lost to those two groups are given to the even more worse off, albeit giving charity administrators a cut.
Fund managers also employ dealers who very much do not buy stock one batch an hour so as to allow HFTs to profit from them. They have a fiduciary duty to their clients to aim for best execution, so if they were being disadvantaged they would be crying out to regulators - who like to look after pension funds.
The head of Vanguard is on the record saying that his firm benefits from HFTs actions on the market. Narrower margins are a good thing.
Re: The Trader Who Donates Half His Pay
#58I talked about this on HN a few years ago, but my friends and I planned to be this guy. In college we talked about all the money we'd make and how much we'd be able to donate. We all had a job offers for $32 - 42k/year. That was amazing! We were living on less than $1k/month in college. We had plans to give away 20%, 30%, or 50% of our income. We would barely even notice. Some of us even managed to do it for a few ye…
The Effective Altruism community is working really hard to combat this. It's definitely a real problem. Jeff Kaufman has written a lot about this, and one argument that stood out to me was making very public commitments to charitable giving. You'll feel more compelled to keep donating if a large part of your public identity hinges upon it.
Re: The Trader Who Donates Half His Pay
#59This may be an unpopular opinion, but I've always felt it selfish when people of means partake in 'aid trips' over sending money to an appropriate organization. If you care to help, leverage your abilities efficiently; make the money doing what you're best at, and let others administer the aid.
I had a hiking friend who used to charter jets, collect farm equipment and food, and fly into areas of the world that he thought needed aid. My friend died two years ago in a car accident so I can't ask him, but I think he did that to be more efficient.
Re: The Trader Who Donates Half His Pay
#60Matt is a friend of mine, and someone who got career advice from what ultimately became 80,000 Hours, a startup non-profit I cofounded. I'm really happy to see the positive response on here; we've advised a lot of people to 'earn to give' and some people... let's say they aren't that happy about the idea that working in trading can be an ethical career. Anyone, if anyone feels inspired by the story and thinks they mi…
"... let's say they aren't that happy about the idea that working in trading can be an ethical career."
Well, it's at least worth having a discussion about.
If you are in a career where you honestly think damage is being done by your activities, you need to weigh that against whatever good is being done with the money you earn and give away.
What about the traders involved in the near-collapse of the global economy in 2007-2008? It would take a lot of very effective giving to make up for the damage caused.