Apparently you aren’t signed up for cryonics. You should be; flying your near-corpse in ice to the US (or maybe Russia) is strictly better than letting it rot. Not sure how life insurance interacts with a cancer diagnosis.
Give to whichever charity you estimate is best. Your donations are always too small to affect which helps most at the margin.
I give 5% of my income, which will go to 10% once I reach financial security (defined as holding a job for six months and lack of terrifying immediate prospects). That’s “all money going in”, not just taxable income. If I acquire money illegitimately (finding it with no obvious owner, borrowing it and the lender not wanting it back), it all goes to charity. I try to be frugal, save for investments (nice shoes help get raises), but fail miserably. I donate once a year, for practical reasons.
I give 5% of my income, which will go to 10% once I reach financial security (defined as holding a job for six months and lack of terrifying immediate prospects). That’s “all money going in”, not just taxable income. If I acquire money illegitimately (finding it with no obvious owner, borrowing it and the lender not wanting it back), it all goes to charity. I try to be frugal, save for investments (nice shoes help get raises), but fail miserably. I donate once a year, for practical reasons.
Same here. I donate 10%, save 10% for emergencies. I donate immediately each month so I don’t even get the temptation to use the money otherwise. I’m a starving undergrad as well, so those numbers might go up later.
I chose 10% for charity because the average donation seems to be about 3-4% of income (quick google confirmation) and I won’t let those bastards be more charitable than me.
Selfish motives are fine, but that’s probably a typical psyche fallacy.
To be fair, a significant amount of these 3-4% (American figure) are religious donations, but the difference between US and Europe is still notable.
To be fair, a significant amount of these religious donations (money and time given through religious organizations) are used in ways that non-religious people would find praiseworthy (like feeding people or providing them with health care).
And to be fair to the Europeans, they have greater state involvement in providing those things, which is one of the reasons European society is more secularised. If you know the state will pay for your hospital visit, you don’t need to rely on the Church to subsidise it.
That’s often quoted as the reason for this, but I believe that a bigger factor is that Americans have a long tradition of “tithing”, because many of their churches used to be insular and self-sustained by the local communities. With the secularisation of the 20th century, the same attitude has transferred over to all charities, even the non-religious ones.
By contrast, the vast majority of European churches are or used to be established, and financed themselves primarily through state support, their own income (land ownership and such), or both. You weren’t expected to have to feed your village priest; in most Western European languages, “tithe” is a purely historical term.
So, while charity in Europe is something many people do, usually it happens irregularly as a form of impulse spending, or by giving to a specific cause or organisation that you have been helped by in the past. You’re certainly not expected to donate regularly unless you’re really ultra-rich (and even then, I doubt many would be seriously offended), and vice-versa, to talk openly about whom or what you donated money to would probably come off really, really awkward, like you’re bragging about your generosity.
That makes sense too, but I was looking at it from the other side—people know they need to rely on the churches for support in the US, so they stay with them so they have that support network in case of illness or disability. On the other hand in Europe people have felt free to leave churches because their taxes pay for that support.
In the UK, at least, there’s even quite an anti-charity stance by a number of people, who consider it the State’s role to, for example, provide foreign aid or fund cancer research, and condider donating directly to those causes to be encouraging the State to abrogate its responsibility.
Cryonics aren’t available in Israel. And I’m pretty sure they won’t be, because our government enforces religious observances at time of death.
The most practical course for me might be to figure out myself that I was dying soon and fly to the US while I was alive, and get cryopreserved there. I don’t know if this is legally possible for a non-US resident, or if it is economically feasible for someone already sick and uninsured. I’ll have to find out. I don’t have much hope of finding a way, though.
I give 5% of my income, which will go to 10% once I reach financial security
These are very round numbers and so, on the outside view, I suspect they are completely arbitrary. How did you choose them?
These are very round numbers and so, on the outside view, I suspect they are completely arbitrary. How did you choose them?
Oh, quite. From “Suggested tithe is 10% of income” I got “most people think a 10% income reduction doesn’t terribly affect their finances”, I divided by two because I’m a starving student and it’s better if I adjust up more often than down.
Not sure how life insurance interacts with a cancer diagnosis.
Poorly. If you presently have cancer, I’m sure you can’t get individual life insurance.
If you had cancer a long time ago and it hasn’t been a problem for years, I don’t know whether life insurance is impossible or you’ll just have to pay a higher rate.
If you’re employed have cancer and might get life insurance through your employer, I don’t know.
financial security (defined as holding a job for six months and lack of terrifying immediate prospects).
I suggest a different definition. Having your finances in order, and having a net worth of at least n years worth of income.
I read n=0,5 a lot, but feel more comfortable with n >3 or more depending on your distance to retirement.
No, it serves as a metric. Many people treat their income (or their income minus what they’ve decided to save) as a budget where they must fit expenses. (Except some rare expenses which are allowed to eat savings.) So “six months of income” is immediately grasped, whereas “six months of typical spending” requires computing your average expenses and hoping nothing unusual happens.
Presumably because the point of having n years’ worth of income is that if you need to, you can live off it for n years; whereas if much of that is tied up in your home then some of those n years are only available if you sell your home, which is a pretty drastic step to have to take. And because if your surviving-for-n-years plan involves selling the place where you live and using all that money, your measure of “income” needs to include any extra rent you’d be having to pay.
No. With decent assent management you can oversee the time delay to access each of the items you own. Cash is good, but not all the reserve needs to be in cash. In a country with a good capital market you can borrow against your house. In severe case where you are unable to acquire income for month that is a decent thing to do. I find it strange to just ignore the biggest asset one owns completely.
Of course this only makes sense if the house/appartment is actually paid for. If you still have a mortgage on it then the house is worth about (house—mortgage—transaction costs) for your reserve.
Yes, since you can borrow with your house as collateral its emergency value (so to speak) isn’t zero, but it also doesn’t equal its sale value. So the right thing would be something between “net worth” and “net worth not counting primary residence”. (Other illiquid assets also need treating specially, for the same reasons.)
Yes, that. The omission was glaring to me because I’m in a situation where net worth is pretty comfortable overall, but discounting my apartment and looking only at my liquid assets and income, well, it’s a different picture.
I wonder what other blind spots exist in standard financial advice. I’m unlikely to happen to fall in the one and only category that reveals a blind spot.
It is not a blind spot. The problem with financial advice is how to tailor it to the receiver. The idea of treating the house as special is good for everyone that otherwise would start to spend on it. For someone who one might call a real rational acting financial sound person it is possible to analyze his situation wholy.
I used to find it weird when people start cutting up their credit cards. It makes sense if you other wise use them, but if you do not, then you can just store them in a nice place and decide to not use them.
You can also use ‘expenses x time’. I just wanted to point out that a job in itself is not a security guarantee. Way to many people have high paying jobs, and no savings—which I consider stupid.
When you just start out, than having the job is a better situation than being unemployed. Having some savings later is even better than that.
‘in order’ means that you have a general overview about your finances, reasonable bookkeeping, keeping up with outside demands like taxes. It also means you are able to keep up with your bills. Keyword: liquidity management.
There is a wide area on how to do it. And then there is the state of being completely lost.
To put it more general: everything strategic that needs to be taken care of is actually taken care off. Savings, special offerings for retirement, if you have dependents that also includes a live insurance.
Consider dealing with financial issues as applied rationality. One could probably estimate how one is saved by a reasonable dealing with the issue, and then donate that to SIAI.
Your advice seems optimized for… well, adults. Sure, if you can use your income as a metric, or your expenses, or some other way of measuring your financial situation—great.
Donating a fixed percentage of your income, then doing as you normally would if you had only gotten this reduced income in the first place, can apply to almost everyone. (People like you who don’t have an income have other problems.)
Saving is a very good idea—actually, my idea of “financial security” is “being able to save money”. It’s just not compatible with the “starving undergrad” model. I’m not a responsible adult, I’m a crazy kid. I don’t do responsibility. Sure, when I get a job (and it’ll likely be high-paying) I’ll start saving (also a fixed percentage, at least until I get the hang of things).
Prioritizing saving and vaguely defined necessary expenses… that’s what I’m afraid of. If I say “I’ll wait until I have enough savings to live on for six months”, I’ll just spend a little more every month, notice I haven’t saved enough yet, and wait a little more. If I say “I’ll wait until I can reliably pay the bills and track spending and get necessities like insurance”, I’ll just keep moving the goalposts—I’ll start thinking I need a car, and I might get sick so I need to save more, and I’ll have a big crash and drop accounting for six months.
Apparently you aren’t signed up for cryonics. You should be; flying your near-corpse in ice to the US (or maybe Russia) is strictly better than letting it rot. Not sure how life insurance interacts with a cancer diagnosis.
Give to whichever charity you estimate is best. Your donations are always too small to affect which helps most at the margin.
I give 5% of my income, which will go to 10% once I reach financial security (defined as holding a job for six months and lack of terrifying immediate prospects). That’s “all money going in”, not just taxable income. If I acquire money illegitimately (finding it with no obvious owner, borrowing it and the lender not wanting it back), it all goes to charity. I try to be frugal, save for investments (nice shoes help get raises), but fail miserably. I donate once a year, for practical reasons.
Selfish motives are fine, but that’s probably a typical psyche fallacy. A whole lot of people defend causes at great personal cost.
Same here. I donate 10%, save 10% for emergencies. I donate immediately each month so I don’t even get the temptation to use the money otherwise. I’m a starving undergrad as well, so those numbers might go up later.
I chose 10% for charity because the average donation seems to be about 3-4% of income (quick google confirmation) and I won’t let those bastards be more charitable than me.
Don’t ignore warm fuzzies.
Whoa. It’s only 0.6% in France.
I just use my reluctance to steal to avoid using money I plan to donate.
To be fair, a significant amount of these 3-4% (American figure) are religious donations, but the difference between US and Europe is still notable.
To be fair, a significant amount of these religious donations (money and time given through religious organizations) are used in ways that non-religious people would find praiseworthy (like feeding people or providing them with health care).
And to be fair to the Europeans, they have greater state involvement in providing those things, which is one of the reasons European society is more secularised. If you know the state will pay for your hospital visit, you don’t need to rely on the Church to subsidise it.
What an extremely fair group of people we are.
That’s often quoted as the reason for this, but I believe that a bigger factor is that Americans have a long tradition of “tithing”, because many of their churches used to be insular and self-sustained by the local communities. With the secularisation of the 20th century, the same attitude has transferred over to all charities, even the non-religious ones.
By contrast, the vast majority of European churches are or used to be established, and financed themselves primarily through state support, their own income (land ownership and such), or both. You weren’t expected to have to feed your village priest; in most Western European languages, “tithe” is a purely historical term.
So, while charity in Europe is something many people do, usually it happens irregularly as a form of impulse spending, or by giving to a specific cause or organisation that you have been helped by in the past. You’re certainly not expected to donate regularly unless you’re really ultra-rich (and even then, I doubt many would be seriously offended), and vice-versa, to talk openly about whom or what you donated money to would probably come off really, really awkward, like you’re bragging about your generosity.
That makes sense too, but I was looking at it from the other side—people know they need to rely on the churches for support in the US, so they stay with them so they have that support network in case of illness or disability. On the other hand in Europe people have felt free to leave churches because their taxes pay for that support.
In the UK, at least, there’s even quite an anti-charity stance by a number of people, who consider it the State’s role to, for example, provide foreign aid or fund cancer research, and condider donating directly to those causes to be encouraging the State to abrogate its responsibility.
Now I understand a lot of things American conservatives say!
Cryonics aren’t available in Israel. And I’m pretty sure they won’t be, because our government enforces religious observances at time of death.
The most practical course for me might be to figure out myself that I was dying soon and fly to the US while I was alive, and get cryopreserved there. I don’t know if this is legally possible for a non-US resident, or if it is economically feasible for someone already sick and uninsured. I’ll have to find out. I don’t have much hope of finding a way, though.
These are very round numbers and so, on the outside view, I suspect they are completely arbitrary. How did you choose them?
Yes, to live it’s OK, but to die there?!
A 1996 law allows alternative civilian burials, and a judge authorized cremation in 2007, so maybe it’d be possible to get around that?
Oh, quite. From “Suggested tithe is 10% of income” I got “most people think a 10% income reduction doesn’t terribly affect their finances”, I divided by two because I’m a starving student and it’s better if I adjust up more often than down.
Poorly. If you presently have cancer, I’m sure you can’t get individual life insurance.
If you had cancer a long time ago and it hasn’t been a problem for years, I don’t know whether life insurance is impossible or you’ll just have to pay a higher rate.
If you’re employed have cancer and might get life insurance through your employer, I don’t know.
I suggest a different definition. Having your finances in order, and having a net worth of at least n years worth of income. I read n=0,5 a lot, but feel more comfortable with n >3 or more depending on your distance to retirement.
Income is irrelevant, you measure this in typical level of spending.
No, it serves as a metric. Many people treat their income (or their income minus what they’ve decided to save) as a budget where they must fit expenses. (Except some rare expenses which are allowed to eat savings.) So “six months of income” is immediately grasped, whereas “six months of typical spending” requires computing your average expenses and hoping nothing unusual happens.
I think either number is fine. Ballparked. The better your financial tracking the more complicated the number can be.
Make that “net worth not counting primary residence”.
Why?
Presumably because the point of having n years’ worth of income is that if you need to, you can live off it for n years; whereas if much of that is tied up in your home then some of those n years are only available if you sell your home, which is a pretty drastic step to have to take. And because if your surviving-for-n-years plan involves selling the place where you live and using all that money, your measure of “income” needs to include any extra rent you’d be having to pay.
No. With decent assent management you can oversee the time delay to access each of the items you own. Cash is good, but not all the reserve needs to be in cash. In a country with a good capital market you can borrow against your house. In severe case where you are unable to acquire income for month that is a decent thing to do. I find it strange to just ignore the biggest asset one owns completely.
Of course this only makes sense if the house/appartment is actually paid for. If you still have a mortgage on it then the house is worth about (house—mortgage—transaction costs) for your reserve.
Yes, since you can borrow with your house as collateral its emergency value (so to speak) isn’t zero, but it also doesn’t equal its sale value. So the right thing would be something between “net worth” and “net worth not counting primary residence”. (Other illiquid assets also need treating specially, for the same reasons.)
Yes, that. The omission was glaring to me because I’m in a situation where net worth is pretty comfortable overall, but discounting my apartment and looking only at my liquid assets and income, well, it’s a different picture.
I wonder what other blind spots exist in standard financial advice. I’m unlikely to happen to fall in the one and only category that reveals a blind spot.
It is not a blind spot. The problem with financial advice is how to tailor it to the receiver. The idea of treating the house as special is good for everyone that otherwise would start to spend on it. For someone who one might call a real rational acting financial sound person it is possible to analyze his situation wholy.
I used to find it weird when people start cutting up their credit cards. It makes sense if you other wise use them, but if you do not, then you can just store them in a nice place and decide to not use them.
″ worth of income” only works if your income is stable. I don’t have a job yet.
I’m also afraid of vague criteria like “in order”, because it gives me excuses to put it off. Do you have a precise criterion in mind?
You can also use ‘expenses x time’. I just wanted to point out that a job in itself is not a security guarantee. Way to many people have high paying jobs, and no savings—which I consider stupid.
When you just start out, than having the job is a better situation than being unemployed. Having some savings later is even better than that.
‘in order’ means that you have a general overview about your finances, reasonable bookkeeping, keeping up with outside demands like taxes. It also means you are able to keep up with your bills. Keyword: liquidity management. There is a wide area on how to do it. And then there is the state of being completely lost.
To put it more general: everything strategic that needs to be taken care of is actually taken care off. Savings, special offerings for retirement, if you have dependents that also includes a live insurance.
Consider dealing with financial issues as applied rationality. One could probably estimate how one is saved by a reasonable dealing with the issue, and then donate that to SIAI.
Your advice seems optimized for… well, adults. Sure, if you can use your income as a metric, or your expenses, or some other way of measuring your financial situation—great.
Donating a fixed percentage of your income, then doing as you normally would if you had only gotten this reduced income in the first place, can apply to almost everyone. (People like you who don’t have an income have other problems.)
Saving is a very good idea—actually, my idea of “financial security” is “being able to save money”. It’s just not compatible with the “starving undergrad” model. I’m not a responsible adult, I’m a crazy kid. I don’t do responsibility. Sure, when I get a job (and it’ll likely be high-paying) I’ll start saving (also a fixed percentage, at least until I get the hang of things).
Prioritizing saving and vaguely defined necessary expenses… that’s what I’m afraid of. If I say “I’ll wait until I have enough savings to live on for six months”, I’ll just spend a little more every month, notice I haven’t saved enough yet, and wait a little more. If I say “I’ll wait until I can reliably pay the bills and track spending and get necessities like insurance”, I’ll just keep moving the goalposts—I’ll start thinking I need a car, and I might get sick so I need to save more, and I’ll have a big crash and drop accounting for six months.