Comment author: cassidynelson 03 May 2018 01:42:34PM 9 points [-]

I think something to consider when deciding on the time point of giving is not only the investment in your own financial future, but the investment in the cause your donation is contributing towards. A donation today/this decade may have a smaller overall absolute value compared with a delayed plan for donating, but the effect of that donation today compounds over time as well.

For example, giving $1000 to a high impact charity working in extreme poverty cause areas may mean that in 10 years from now a community that benefited has a marked alteration in trajectory. Less malaria disease burden today in their younger members may have substantial further reductions in suffering in a decade, more than a larger donation at that time point might be able to achieve.

Another example is giving money towards high impact research today which may have positive benefits in a decade from now from helping enable a field. The value of starting research earlier, giving it time to produce value, may be much greater than investing a larger amount at a later point in time.

Comment author: jamie_cassidy 05 May 2018 03:03:07PM 1 point [-]

Definitely, I think that the discount rate each of us applies to future donations is an extremely important factor to consider. In fact, I would be in the camp that this discount rate is likely very high - mostly in agreement with the points you have made.

Now that I have reached a point where I can start giving without affecting my life choices, I'm planning on giving away a majority of the balance as soon as I get my hands on it, rather than investing to increase future donations.

Comment author: Khorton 04 May 2018 09:22:18AM 3 points [-]

Several of your assumptions - for example, about taxes - are country-specific. Property tax for owners, closing costs, and tax breaks for homeowners vary from country to country. You also didn't include time or money costs from maintenance, which I expect to be substantial. Your core argument - young EAs should build up savings - could be right, but has already been discussed at length. For example, see

Comment author: jamie_cassidy 05 May 2018 02:54:20PM *  0 points [-]

Thanks for the link, I hadn't come across it before and agree it is a very useful analysis of investing vs giving depending on one's opinions about opportunities for investment and the discount rate applied to future donations. I think this point is related to mine and very useful in it's own right, but the point I am trying to make also involves personal utility.

I'm worried about the sustainability of giving which requires sacrifice on the part of the donor - which I believe is the path of least resistance for those interested in EA at college and who end up taking the GWWC pledge at that time. I'm trying to communicate that it is possibly, and perhaps even likely, to be more productive to reach a level of wealth at which you can sustain your desired lifestyle and then give large amounts in excess of that level, rather than giving a significant % from the moment you join the workforce.

I agree that tax treatment of property varies from country to country along with several other relevant variables. I only offered an imaginary numerical example for illustrative purposes. My goal is certainly not to convince people to buy property without knowing anything about their circumstances, only to have them consider the possibility that it might be beneficial, and that running the numbers specific to their case is an exercise worth doing.

In response to comment by [deleted] on Giving Later in Life: Giving More
Comment author: Denise_Melchin 03 May 2018 08:11:09PM 4 points [-]

I think this claim is often true if someone wants to stay in the same location - however, that is very expensive for someone’s career.

Considering EA’s focus on ‘having a good career’ for which the willingness to move is important, buying a property seems much less likely to be a good call compared to the average person. Unless being willing to move whenever a better opportunity arises is not something you’re willing to do anyway, of course.

Comment author: jamie_cassidy 04 May 2018 05:52:11AM 0 points [-]

Agreed, though most people naturally settle down at around 30-35, at which point people tend to move much less frequently. Even if you move once every 5 years from this point, I would still say that most of the time it is worth buying vs renting. This in mind I think people younger than this should consider saving to the point where they at least have the option to do this when they reach this point in their lives/careers.

Comment author: [deleted] 03 May 2018 07:51:06PM *  3 points [-]

Thanks for the post :)

If we make any kind of reasonable assumptions about renting, house price increases and mortgage repayments, it makes a lot of sense for people to save to purchase their own home as soon as possible.

Could you provide a source for this claim? If this were true, we would expect that it's possible to make a lot of money by buying property and renting it out. This would imply that the market for housing is hugely inefficient.

In response to comment by [deleted] on Giving Later in Life: Giving More
Comment author: jamie_cassidy 04 May 2018 05:46:25AM *  1 point [-]

Hey Thomas, I have a spreadsheet to highlight the disparity rather than a source, I can send it to you'd if you like? As an illustrative example though let's imagine we have a 30 year old person with $50k saved up. They can either donate this to charity and continue to rent, or use it as a deposit (down-payment) to buy the same house, which let's say is valued at 500k. The numbers will depend by city, but let's assume mortgage interest rate of 4.5%, rental yield of 3% and an average house price increase of 3% per year.

If you have a 450k mortgage on a 30 year schedule, you will pay a total of $773k in mortgage repayments (450k in capital repayments and 323k in interest) and at the end of the 30 years you will own a house worth $1.21 million. If you choose to rent, you will pay $713k in rental payments over the 30 years and obviously at the end you will not own anything. The most difficult part of this calculation is the amortization schedule for mortgages, but there are websites that will do this work for you such as this one;

Does this mean that housing is mispriced? I don't think so. Firstly there is a huge tax advantage to owning your own house vs renting. This is because you don't pay any tax on the rent you avoid paying. However, if you buy an investment property under the same terms and rent it out, you will have to pay income tax on the rent received. Second, in my example investors make 6% a year (pre-tax) owning housing in the long run. This compares with 8-10% by owning stocks in the long run. In general property is considered a safer asset than stocks, so a lower return makes sense, but given government bonds usually return 3-4% and they are much safer than property, a return of 6% or even higher seems reasonable.

Do people make a lot of money by investing in housing? This is a separate question to that of inefficiency and the answer is generally yes they do! One of the huge drivers of wealth inequality (Piketty) is that wealthy people have their money invested in long term assets like property and stocks, where the return is 6-10%. Meanwhile most working and middle class people have a substantial amount of their capital sitting in current (checking) and savings accounts earning 0-2%.


Giving Later in Life: Giving More

I have recently made my first major donation to an EA cause. I have been very convinced by the EA argument for several years, but up until this point I have only made small donations, averaging maybe .5% of my income. This is despite me being older and wealthier than... Read More
Comment author: jamie_cassidy 01 May 2018 07:08:26AM 2 points [-]

Good work, it's great to have any numbers on this at all. Given these are acquaintances I wonder could you follow up to try to get some reasons from the drifters. I would like to be able to classiy the reasons for changes in behaviour in one of the following two buckets; 1) I am lazier, more self-centred than in the past 2) I was young and naive, I know better now

In combating future potential value drift, we are considering tactics to essentially coerce our future selves. If we are confident this is because 1) then I think this coercion is merited, but if it's 2) then maybe we are compounding an error?

Comment author: jamie_cassidy 02 December 2017 02:01:41PM 1 point [-]

Very interesting and I like the central point that cash transfers aren't an automatic win and are therefore worth studying, which I hadn't considered to the same extent before. On the education stuff, it seems like a lot of these problems could be solved if jobs were allocated based on the results of a standardized exam rather than years of schooling or some similar metric. I'm not talking about one run by schools, because it's likely the process wouldn't be trustworthy, I'm talking about when you advertise a job that requires reading, writing, or filing skills, you test for these skills with a written exam. Encouraging governments and other large employers to act in this way would surely encourage students (and parents) to actually learn rather than simply attend school as a box-ticking exercise.

Comment author: jserv 01 December 2017 05:44:42PM *  1 point [-]

Thanks for sharing this. As a previous volunteer I understand where you're coming from completely. Unfortunately the scene you described in the woman's house is one that occurs even in the United Kingdom. The conversation you had with the site visitor is quite moving, if you remember anything more specific about her answers I'd be interested to read them.

I have been doing some research on volunteer programmes, especially those that take volunteers abroad and the 'voluntourism' industry. Like Liam, I'm wondering if there is scope for EA to compile a list of the more effective volunteer organisations.

From what I can tell, the key difference seems to be in whether the charity is searching specifically for volunteers with skills that are not locally available.

I am considering taking a voluntary placement with VSO in 2018, one that I have selected for its emphasis on skills and anti-poverty goals. Any other recommendations or comments would be very welcome.

Comment author: jamie_cassidy 01 December 2017 11:04:45PM 1 point [-]

I want to be careful not to put words in her mouth here, as it's been a while now, but I can share more detail on what I took out of the conversation. Basically, to have any large impact you need to change the whole chain of events rather than focus on one particular area. Taking an extreme example, consider a mining town in Britain in the 19th century, where after primary school, working class children go to work in the mines and remain there for the rest of their lives. Improving the standard of primary education they achieve will have very little direct impact on their lives, if they still end up with the same probability of ending up in the mines. This is an extreme example, and I imagine that some (more) of the kids in the schools we contributed will progress further in education and employment. Even for those that don't, it's likely better reading and writing skills will stand to them over the course of their lives. Still, there is a reality here that needs to be faced, there were 3 young girls who spoke at the 'closing ceremony', thanking us deeply for helping them in their dream of becoming doctors, which all 3 of them were determined to do and confident they would achieve. However, from speaking to this lady it seems very unlikely that any of these three most promising students from the school will actually make it all the way through university and medical school.

Comment author: Liam_Donovan 25 November 2017 03:08:57PM 0 points [-]

Are there, in fact, any such trips organized by EA charities?

Comment author: jamie_cassidy 01 December 2017 10:50:45PM 1 point [-]

Not that I'm aware, although I do remember reading that Philipp Gruissem went to Uganda, and the Givewell guys have been on site visits. I imagine that if you are a frequent or large donor one of them would facilitate, but it would be interesting to explore an organised EA trip.

Comment author: Kieranhammmond20 24 November 2017 10:46:30AM *  4 points [-]

Thanks for this, I found it interesting. Many of your experiences resonate with mine, in charge of a charitable organisation dealing with many volunteers whose motivations seemed unclear or dubious. I found it difficult to convert people to effective donating or to get them excited about effective altruism, even though those I was working with were highly intelligent, rational and mostly vibrant people.

There is certainly something to be said for trying to influence charities towards more effective interventions, rather than focusing on cause prioritisation. Often charities don't focus on this simply because they lack the tools to measure the effectiveness of interventions, not because they lack resources, have a narrow mission statement or don't think that impact is important. At the moment, I am working on a project to automate randomised control trials to make them more affordable for charities wanting to evaluate their impact in a more rigorous way.

Overall I think the realist perspective you have outlined here quite refreshing. Charities do, and will continue to, work in areas that are not typically regarded as the most impactful by EA organisations. People are, and will continue to be, motivated strongly by their emotions. What can we do within those parameters to make things more effective?

Comment author: jamie_cassidy 01 December 2017 10:46:05PM 0 points [-]

As you say, people are and will be driven by emotion for the forseeable future. Therefore there will always be demand to give to charities which cater to this need, so their will always be charities that target relatively ineffective solutions. Within that though, I think charities understand that they have some scope for discretion as to how exactly to spend their budget. I'd be hopeful by nudging the right people at the right time, and by making EA a thing that people have heard about, we can have a positive impact on effectiveness.

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