Writing Up Old Ideas IX: Money
Money, like death, is a topic I feel uncomfortable writing or speaking about. Part of it is for social reasons; I’ve been taught not to share my salary or give the game away about my personal finances much like everyone else (obviously it goes without saying that not sharing one’s salary benefits primarily one’s employers, and if you ask me privately, I am more than happy to share what I earn). There’s more to it than that though, in that I am acutely aware of my staggering good fortune when it comes to money. I’ve never had to worry about it for a single moment in my entire life, and I know that that makes me exceptionally privileged. So when I do talk about money, I know that I need to keep myself in check, and constantly remind myself for many, not having enough cash can be a source of constant anxiety, let alone lack of access to it can also mean lack of access to food, water, and basic healthcare.
In talking about money then, the only really thing I have to discuss is what I do with the privilege; am I obliged to give some of it away, and if so, how much? The answer to the first question is that I definitely think so, yes. Even from a purely selfish perspective, hoarding wealth past a certain point doesn’t seem good for one’s wellbeing, and having a fixation on accruing more capital seems to be a one way ticket to sprouting a tail and becoming Smaug. The research into the relationship between wealth and happiness shows that at some point, earning more money provides diminishing returns on happiness and wellbeing, as nicely articulated by this article from 80000 Hours. I am in fact a big fan of 80000 Hours in general and am wholly persuaded by most of what they say, to the extent it informs most of my thoughts about both wealth and my career. I’d recommend reading their key-ideas, largely as whoever wrote them is infinitely smarter than I am.
The graph under the “OK, but are richer people happier?” heading in the above linked article, taken from this study (authored by superstar economists and Nobel prize winners Daniel Kahneman and Angus Deaton) was illuminating for me. Past $75k household income per annum, three of the key metrics flatten off completely, although general “life satisfaction” does continue to increase. 80000 Hours make the point that past a certain threshold, the most effective use of your income in order to make you feel happiest and most fulfilled, is to donate it to charity. Charity is a complicated topic that is definitely worthy of its own post in the future, once I have something more concrete than vague musings on it, but for now, we can just assume that there is A Perfect Charity that we’re going to make the entirety of our donations to.
It is very easy to make a blanket statement like “you should donate any of your income above x amount to charity” and much harder to actually do it. What about a rainy day fund? Can an emergency pot of money ever be too big? What about my kids, even if they don’t exist yet, I want to give them the best possible quality of life, don’t I need as much money as possible for that? If I keep the money for myself and invest it now, couldn’t I give more money to charity in the future, thereby doing more good overall? Will earning more money really not make me happier, given how much I love travelling, being able to live somewhere nice, and enjoying delicious food and beautiful clothes? Why should I give any of my money to charity when Jeff Bezos doesn’t give any of his away, isn’t that how he got so rich? Why should I give any of my money to charity when Bill Gates is giving so much of his away, anything I could give would be a drop in the ocean in comparison (this is not an endorsement of philanthropy redeeming billionaires of avarice and selfishness that has made the world a worse place for everyone else; Bill Gates still sucks, and not just because Windows does)? Or, the one currently on my mind; I am moving to an expensive new city soon, aren’t I going to need as much money as I can get as my cost of living is going to increase by a significant, but not entirely well defined, amount?
These are all real, valid, difficult questions, none of which I have the answer to. But these are all questions few ask out loud, and I suspect most people shy away from asking in their own heads too. As a society we’re taught to be secretive about money, and I can’t help but wonder whether that allows us a certain amount of greed in private. I think it would do a lot of people a lot of good if we could find a way to start having these conversations and asking these questions in public. In that spirit, to put my money where my mouth is a little and to show that I am currently not doing a good job of practicing what I might preach, I currently give ~1% of my monthly income to a carbon offsetting charity, and that is the only regular charitable donation I make. I would love to say that that’s going to increase immediately or at least in the near future, but that would be not only preachy virtue signalling, but also probably not true.