Today I want to tell you why I donate only 7% of my income to charity. This article is extremely uncomfortable to write for me personally. It’s something I’d rather not talk about. That’s because when it comes to donating money, my actions don’t align with my values. But I think it’s good to be honest about this. This article shows how capitalism has me (and us?) trapped. And it maybe also shows that it’s hard to live in line with your values on all fronts. I hope you bear with me.
Values: Effective altruism
I believe in effective altruism. I wrote an article about it not that long ago. The core of effective altruism is to live as frugal as you can yourself in order to be able to donate the biggest share of your income as possible. It’s the most ethical way to spend your money in the world we live in today. So effective altruism is the base of today’s article, it’s part of my core values.
Actions v.s. values
If I lived up to those values of effective altruism, I’d donate about 40% of my income. As that is the part of my income I don’t really need. I use about 60%. But in reality I donate only 7% of my income. So there we have it: my values are not aligned with my actions.
So what do I do with this other 33%? Well, I invest and save. The saving is not the part that makes me uncomfortable here. I mean, I feel like that is okay, as I’m saving for a home. I guess a home is a basic need. You could also rent a house, yes. But for me, I feel like the saving for a house is justifyable. What’s not justifyable for me is the investing. That’s absolutely not neccessary.
Why I invest
I’ve written about this before, but I invest to become Financially Independent and Retire Early (FIRE). The concept of FIRE is that your money works for you, instead of you doing the work yourself. If I do it ‘right’, I can retire about 20/25 years early because then I can live off the interest of my investments.
Why do I want to becomde FIRE? Well, because I want to have unconditional freedom. It’s not that I am too lazy to have a job. I just want to have a choice, always. In fact, I think I will always try to work and contribute to society. So I won’t actually retire when I am FIRE. But I want to work on my own terms. I don’t want to be stuck in a job I hate because of my mortgage. I don’t want to be trapped in capitalism. Unfortunately, I think many of us are trapped in capitalism, because many people say they would quit their job if they’d win the lottery. That’s stunning to me. We only have one live.
Sustainable investing?
Me trying to become FIRE is selfish. I know that. The money I invest should be given to charities. I am acting selfish when it comes to money and there’s no excuse for that. But I do try to do it the most ethical way I can. I only invest in things that are sustainable, like solar panels via Zonnepanelendelen. Or in crowdfunding. The index fund I invest in is the most sustainable I could find. And I have state bonds. None of my money goed to evil companies like Shell.
There you have it. This is why I donate only 7% of my income to charity. I’m hoping to higher it the coming years, to hopefully at least 10%. But the coming decade I won’t donate the 40% that I should.
Yours sincerely,
Romee