Earning to give has been a classic EA suggestion due to the value money can bring elsewhere in the world. Although lately e2g has fallen out of favor somewhat, for those already established in high-earning careers, or anyone who may have some extra cash available to donate, the question remains of how best to use money for optimal impact.
Previous research claimed diminishing marginal returns of money on happiness, and concluded excess money should be donated to effective charities. However, new research has shown that money can buy happiness after all, as anyone who has a lot of money and knows how to spend it could’ve told you all along. Thus, in this post we advocate for a new strategy of spending substantially more of one’s money on oneself, which we dub earning to live.
Earning to Live
The basic idea of earning to live is that the best use of one’s money is spending it directly on oneself. This includes not only survival needs such as food and shelter, but also “luxuries” (though we prefer to avoid the term due to negative connotations) such as travel and entertainment. Further examples are discussed later in this post. Compared to earning to give, earning to live has numerous advantages:
- Reduced operational overhead: while any charity requires some administrative overhead, money you spend on yourself can go 100% to your desired target.
- Better quantifiability: a central challenge of effective giving is determining which charities yield the greatest impact per dollar, often relying on diligence and estimates by third-party evaluators. It’s much easier to get a feel for how you can spend money to bring yourself personal utility and then do more of that.
- High neglectedness: while other causes may have thousands of donors contributing millions or even billions in funding, the number of people spending money on you is likely fewer than 10.
- Improved productivity: it’s well established that a miserly existence can hamper your productivity and therefore your impact. By spending to make your own life more comfortable, you can build a virtuous cycle of higher output and thus higher income, which you can continue spending on yourself.
- Research value: similarly, all personal spending may be viewed as investigation into what kind of spending brings you utility, so there are dual benefits of direct utility and value as data for deciding how to spend in the future.
- Solipsism: if you happen to be the only real consciousness in the universe, spending money for the benefit of others is irrational.
- Near-termism: if you value the present much more highly than the future, you can spend money on yourself immediately, but donations will take time to transfer and process before having any impact. This may be especially relevant if we all die very soon.
- Long-termism: if you value the future as much as the present, you may instead consider investing your money in order to spend larger amounts later, or pass even greater generational wealth to your heirs.
Suggestions for spending
A tenet of earning to live is that you know best how to spend your money to maximize your utility. However, if you prefer to parrot views of charismatic thought leaders to establish your membership in an in-group, my standard recommendations are:
- Fine dining: a tasting menu prepared by a world-renowned chef tends to taste better than microwaved lentils at home. If you’re vegan for animal welfare reasons, you still have options.
- Travel: with adequate budget, flying can be a pleasant experience. Exploring new parts of the world can expose you to new ways to spend money. Also, since you’re probably American, much of the world is much poorer than you, and seeing that first-hand can build a sense of satisfied superiority.
- Housing: buying or renting better located or more comfortable accommodations for yourself can improve your quality of life substantially.
- Counting your money: simply looking at how much money you have or have spent can give a feeling of accomplishment and satisfaction. Furthermore, doing so requires no marginal spending.
If you still find you can’t spend all the money you have, you can always send money to me, and I’ll put it to good use.
How could my personal indulgences be more important than saving lives?
A useful framework here is the idea of “quality-adjusted life years.” While saving a life for a few thousand dollars may seem appealing, the person whose life was saved will likely never fly first-class or dine at a Michelin-starred restaurant (there are none in Africa). For a similar amount of money you could eat at Masa for a week straight, and the consequent quality of your life would be immense.
Spending What We Can
We hope this post has inspired you to pursue earning to live. If you want to commit to doing yourself good better, consider taking the Spending What We Can pledge to spend at least 10% of your income on non-essential personal expenditures that bring you happiness. You can also take a trial pledge at 1% if you don’t feel ready to commit, or if you’re very wealthy, consider pledging much more than 10%.
In rare cases, personal spending may involve charity administration overhead, but where applicable this pays for itself in tax savings and the satisfaction that writing off your personal indulgences is really cool.