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The Trader Who Donates Half His Pay

nytimes.com

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Re: The Trader Who Donates Half His Pay

#101

Post by 33W »

Someone1234 wrote: post #19
vinay427 wrote: post #9

Earlier quoted context omitted.

That's certainly a logical opinion, and I agree that efficiency is key. However, I think it's also important to keep in mind the personal value of traveling on aid trips, which allow for an improved understanding of the need that lies. Perhaps this encourages potential donors to increase the frequency and quantity of their contributions.

I'd liken it to the classic criticism: "charities spend too much money on advertising!" But how do charities get donations without advertising? How do they let people know why they need the money and encourage them to donate? At some point, yes, a charity can spend too much of its donations on advertising, but advertising in general is a necessary evil. Same with this. The charities might take in less overall if they…

It is also similar to the criticism of CEO pay for nonprofits. If the CEO brings in additional donations and furthers the organization's mission, why wouldn't they have pay competitive to a for-profit org? Why should you be paid less to do good than evil?

or non-good, marginal good, regular doings, etc.

Re: The Trader Who Donates Half His Pay

#103

Post by SatvikBeri »

jtbigwoo wrote: post #37

I 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…

One thing that really helps is getting involved with the growing Effective Altruism movement. There are several effective altruists at Jane Street (where Matt works), as well as meetups in NYC (and most major cities in the USA) and being part of a community makes sticking to those ideals a lot easier.

Also, note that 5% of your income donated to effective charities is still huge, and enough to save many lives during your career.

Re: The Trader Who Donates Half His Pay

#104

Post by ceras »

krstck wrote: post #58
jtbigwoo wrote: post #37

I 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.

Do you know how well this actually works for people in practice? My friends, acquaintances, and coworkers know I'm frugal, but I avoid telling them it's because I donate a lot of my money. People can become very defensive and judgmental hearing about people who donate or are otherwise "do-gooders," and I just don't like that kind of attention.

Re: The Trader Who Donates Half His Pay

#105

Post by sopooneo »

mrspeaker wrote: post #23
vinay427 wrote: post #9

Earlier quoted context omitted.

That's certainly a logical opinion, and I agree that efficiency is key. However, I think it's also important to keep in mind the personal value of traveling on aid trips, which allow for an improved understanding of the need that lies. Perhaps this encourages potential donors to increase the frequency and quantity of their contributions.

Also, it maybe efficient in turning dollars to aid, but nobody at the "rich trader bar" wants to hear a story about someone donating money... that's just a way to reduce taxable income. An engaging personal story about travel and experiences is much more likely to have an impact on others.

From a purely financial, self-interested standpoint, how does a donation to charity which reduces taxable income actually help a person? If I reduce my income by $100, it's true I won't have to give the fraction of that to the government that I might have, but now rather than being out a fraction to the government, I'm out the entirety to the charity.

Even in the case where the donation drop the payer to a lower tax bracket, I don't see how it helps. Any insight greatly appreciated.

Re: The Trader Who Donates Half His Pay

#106

Post by kendallpark »

hkmurakami wrote: post #91
willmacaskill wrote: post #40

Earlier quoted context omitted.

I think this is a really important concern. Btw, 5% is still quite a bit more than the average, so good work! We're attempting to overcome this worry through community and behavioural economics hacks. E.g. I take every opportunity that I can (like this one) to say publicly that I'm planning to give away the majority of what I earn, which makes it a helluva lot harder for me to back out. Similarly for Matt - it would…

Not only is 5% of one's income a rather high number, even the average amount that people give in the United States is far higher than the corresponding amount in other countries (ex: Japan). It may be the country's Christian leanings that contribute to this, but to be charitable is seen as a virtue and absolute good in this society. This is not necessarily the case in other societies.

> It may be the country's Christian leanings that contribute to this

Maybe so. I was taught to tithe 10% of everything I earned starting with my grade school allowance. 10% to God (which could go to a church or charity) and 25% to the bank. Everything else got spent on Legos and whatnot.

Fast forward twenty years (I'm 25) and I still siphon away 10% of my income into a separate account that I save for either church donations or charitable causes. At that point the money isn't really "yours" or at least that's what is typically taught in Christian culture. Makes it a lot easier to spend it on others.

Re: The Trader Who Donates Half His Pay

#107

Post by jarrettc »

techtivist wrote: post #87

I am not sure if this is really "effective altruism". When I decided to leave a high paying job to start an education startup in order to pursue my passion to make a change through education, I got similar advice. I was told it would be more "effective" to keep my job and donate the money to education related charities instead. But I realized that as an software engineer, my skills could prove much more impactful, an…

The relative impact of your money vs your time depends in part on your income, you skill-set, and the causes you would choose.

A person with a high income but few relevant skills would probably have the greatest impact by donating money. For example, a trader interested in preventing disease might not have any skills in developing or delivering vaccines. But that trader might have a substantial amount of money to donate to organizations that do have those skills.

On the other hand, a software engineer with a modest income might find a very effective nonprofit that could do much more if only it had access to software development talent. For that engineer, donating time might achieve much more than donating money.

Re: The Trader Who Donates Half His Pay

#108

Post by ernestipark »

xur17 wrote: post #86
ernestipark wrote: post #79

For those interested, one way to build this charitable muscle and lifestyle is to start a charitable trust (at least in the US). It's not just for the ultra wealthy. You can start any old investment account and commit to funding it regularly say $20/month or 1% of your salary to start. Then when you hit $5k or more you can transfer those funds to a trust you create with say Fidelity or Vanguard ($25k minimum). You ca…

I'm interested in this approach - is there any charge to create the trust? Also, I wish the minimum for Vanguard was lower - I already have an investment account with them, and this seems like a great way to get started.

Shouldn't be - I think it's just the same as most investment accounts in that there is a small management fee that takes a percentage cut. In this way Vanguard is the best as it has the lowest rates I know of for the casual investor, but the minimum is certainly high.

Re: The Trader Who Donates Half His Pay

#109

Post by ceras »

techtivist wrote: post #87

I am not sure if this is really "effective altruism". When I decided to leave a high paying job to start an education startup in order to pursue my passion to make a change through education, I got similar advice. I was told it would be more "effective" to keep my job and donate the money to education related charities instead. But I realized that as an software engineer, my skills could prove much more impactful, an…

I think both you and the article are in-line with effective altruism (the movement). The crux of EA is objectively and dispassionately deciding what causes do the most good with your scarce resources (time & money) and deciding how to best support them. Reasonable people will disagree on whether working in the industry or donating profits from a higher-paying industry will work better for you. Education isn't a popular EA cause but whether it is or isn't optimal depends on the change you think your start-up will have contrasted against what impact you could have elsewhere.

Check out https://80000hours.org for a way more in-depth exploration of the different career-related EA strategies.

Re: The Trader Who Donates Half His Pay

#110

Post by nocman »

rry wrote: post #90
bshimmin wrote: post #66

"Mr. Wage" is a lovely example of an aptronym: http://en.wikipedia.org/wiki/Aptronym

Not to be a downer, but it's pronounced "wah-GEE", with a hard G. source: used to work a few desks down from Matt.

Wow, now there's a guy guaranteed to have his name mispronounced 99% of the time (well, at least by people who have never heard it spoken). [ edited for typo ]
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