A few months ago, a complete stranger gave me $10k (2021)
sarahdrinkwater.medium.com
sarahdrinkwater.medium.com
I coded it up, ran the project and got paid. I put back 30% for taxes and paid the AWS hosting bills (mostly for RDS) of about $500 and gave the rest to someone who was battling cancer. I gave it to them personally, in cash, in all 1's as a joke. It was pretty cool to see over $2,000 in singles packaged up in money transport ziplocks put down in a gift bag. They thought I was giving them a brick as a joke.
I tell you what - it made me feel like I was on top of the world.
I look back on it and I kind of wish I had figured out how to eat the taxes and give all of it except the hosting costs (I didn't have a ton of expendable income at the time).
Reading this story and thinking about them seeing the tax bill reminded me of this. Kudos to them for being able to give all of it on to worthwhile causes. I bet they felt amazing. It is so nice to be able to do something for someone.
That was thousands of dollars from me, but it was great to be able to say, "I believe profiting from housing is unethical and I'm willing to actually do something about that."
Reactions were incredible. Lots of happiness was shared. A couple folks were able to start savings they didn't have before.
I highly encourage the successful folks in this thread to find opportunities for giving like this.
I'm lucky my career has worked out, it's given me opportunities to help others and really sit with the question, "what do I feel is right and moral?"
Edit: I think I had read about someone doing this via hacker news, actually, and asked "what would it cost me to do the same"
While I sat with it, I did become more financially comfortable, but it wasn't the money that changed my mind.
And yes, across all income levels, I do believe making a profit from housing others is immoral. But like, as long as we have major corporate landlords I'm not going to spend much thought on mom and pop landlords. If you are renting a spare room out it's like, "hey, I don't agree with what you are doing, but I understand it."
The trouble of buying a house for a couple of years is more costly and time consuming than just renting. Living in a decent hotel for a couple of years would be crazy expensive and is illegal in many places.
There's a lot of different levers we could pull, none of them solve the problem, all of them introduce other challenges. But we could definitely make a better system than we have today (for renters and individuals. Less so for landlords.)
Looks on people's faces when you say "so we needed to repaint, so your $1,000 deposit has left over ... $3k."
Even better, if the company has increased in value, your deposit should be returned with that increase reflected.
We've had people rent for nothing, rent in exchange for teaching a skill or hobby, pay at cost, or pay more (the money is held to offset people who cannot afford to pay the full cost of room).
In general, our rental timelines are short, 3 to 12 months usually. People often need a stepping stone to get themselves a leg up and move on to something else. We're happy to make that possible.
When I explain how I operate, people tend to understand pretty quickly that it's special. If someone was, say, a Google engineer and trying to pay $0, I'd just not renew or whatever.
In general, poor folks aren't going to cheat. If money's tight, they should pay less, that's not cheating it's just sliding the scale to meet them where they are.
Whether you are cleaning toilets, flipping burgers, staffing a call center, or any other thankless job out there, you still deserve your dignity. We as a society have decided we think the job you do is important enough to pay someone to do it. You should be able to live your life on that pay. Or even if you are unpaid because you are a refugee, stay at home mom, student, or anything else, you are still a member of my community. You are still my neighbor. And therefore it's worth making sure you are surviving with dignity.
I'm no better. I donate to charity, but I still feel best about myself for times I helped people change a flat, etc.
So I guess what I'm saying is... why not both? Donate to charitable organizations, but not exclusively. Also go out of your way to (anonymously or not) do charitable things to individuals.
There's something to be said about helping those around you directly as a way to build a better local community. Especially when you can help 'for free' (e.g. by helping someone with a flat, as I mentioned).
Now, that said, if we are talking about giving out $10'000, and we're sort of encouraging more to do it (by sharing how we donate), at that magnitude and scale I think it would be better if we encouraged people to donate more effectively.
I think this is hard for monetary assistance where there really is a direct tradeoff. It's hard to say well I'll keep this $1000 to help someone I find individually when those $1000 instead donated to a faceless charity would probably save another persons life.
If you don't know an individual who needs the $1000, then sure, donate to charity. But not all charity has to be in the form of large cash gifts and not all charity recipients have to be cancer patients on the verge of death. Sometimes being charitable to individuals is as simple as taking out a coworker or neighbor to lunch and just talking to them. Lots of people suffer from loneliness, depression, and things other than cancer and would benefit enormously from someone going out of their way and showing an act of love to them.
> I think equating dollars to lives is too utilitarian a take to be useful IMHO. The goal of charity could be so much more than "lives saved". It could be "lives improved" which cascades into "societies improved".
Sure, but I guess I think "life saved" is probably the extreme case of life improved.
I think helping people in our proximity personally is the best course of action. That way, we know that our money isn't ending up in some greedy grifter's pocket - and if enough people do it, the effect can be greater than that of any charity.
The impact of a dollar in the developing world is so much more than anyone that you could help who is in close proximity to the typical HN commentator that it would take an absolutely massive amount of graft to equalize the two.
* (where by the way they also end up poisoning fish and people when the malaria nets become fishing nets)
Yes, some of charity money actually goes to those in need. But what part of it does go to the people who use that money to further exploit those very people they're helping? What if the total result is actually net-negative?
I believe that greed is a much more common motivator than altruism.
The kind of charity that is most likely to be fraudulent or completely ineffectual, is a small, local one. The bigger the organisation, the more cost-effective it is to do checks.
> The kind of charity that is most likely to be fraudulent or completely ineffectual, is a small, local one. The bigger the organisation, the more cost-effective it is to do checks.
It's actually the other way around. The bigger the organization, the more room it has to cook its books and bribe the verifiers. Also, the bigger the organization, the bigger the tax cuts, which means bigger motivation for grifters.
It is true that many charities are inefficient. Some are fraudulent. Still, it is overall far more effective in the whole to give to organizations that can impact at scale.
You can't know that. Those organizations might as well be making the problem worse, if nothing else then for the sake of keeping the money flowing.
See cobra effect: https://en.wikipedia.org/wiki/Perverse_incentive#The_origina...
1. Could you quantify "often"? Are you suggesting at least 10%? If so, that's a bold empirical claim that needs justification. If it's under 10%, then giving $100, even when you know $10 goes to "waste" shouldn't be a deterrent.
2. It's not hard to find charities that are not corrupt (and most-importantly are cost-effective) with the money you give, look at this list of very thoroughly-vetted charities: https://www.givewell.org/charities/top-charities
Websites that act as arbiters of charity justice don't help either, for the same reason - who is verifying the verifiers? It seems to me that the most corrupt charities would be most motivated to boost their numbers on various vetting websites, while the legitimate ones would be too busy actually doing something to bother dealing with internet politics.
Have you looked at GiveWell's review process? What doubts do you have that the charities GiveWell recommends are close-to-impeccable? Are you suggesting the documentation of interviews, onsite visits, etc are not based on reality? To insist on principle without looking at how things are seems to be a disingenuous armchair philosophizing, rather than a desire to do any good.
> To insist on principle without looking at how things are seems to be a disingenuous armchair philosophizing, rather than a desire to do any good.
To insist that greed is not a powerful human motivator, much more powerful than altruism, is being naive.
If you rephrase that question without the false dichotomy, and preferably with an explanation what exact difference does it make whether or not I looked, I'll be glad to answer it.
I've known a number of people that have spent a good portion of their lives working in charities. They all have the same story. Living in near poverty themselves to help people in need. The one day they wake up and realize that the charity is not only taking advantage of them, but also exploiting the money they take even though they make it look good on paper.
The problem with free anonymous money is that the temptation to grift it is just too high and eventually someone in power will succumb to the temptation.
I encourage you to go to a charity event. Take note of something while you are there. How many beautiful women are around? I guarantee you it will be significantly higher than any normal place. Ask yourself why this is? There are a number of reasons but a big one is that many charities are simply vanity projects for bored housewives and daughters of rich men. (points at united way) Even if they do some good it is a highly diluted version of what it should be. The purpose is not aligned.
If you really are a good person and not simply patting yourself on the back for the feel goods of dropping a $20 in the charity box. I encourage you to take a much deeper look into what charities really are and how much good they actually do. Maybe you just got lucky and got involved with a serious charity at one point in your life but they are not in the bigger picture as magnanimous on a whole. FYI you are probably not going to find real answers on the internet. Charities are acutely are aware of that public face.
Hmm, should I help a human being or spend all my money writing blog posts on why AI will kill us all? Okay, sure, maybe you want to give to a substack for AI alignment people whose sole output is voluminous reams of content on why AGI is around the corner and a harbinger of doom, but I think this may not be everyone's jam.
However, for those who prefer the utilitarian mindset, a friend built https://cosmicbraintrust.org/ so that you can donate to a more worthy cause - an aleph_1 to AI alignment's aleph_0.
- You have an S-Corp and have a 401k attached to that
Let's say you had a contract of $300,000 and the default tax bill is going to be close to 40% for a California resident (-$120,000, leaving $180,000)
- contribute $60,000 to the 401k, since the S-Corp allows you to do both employee contributions ($20,000) and the separate employer contribution maximum ($40,000, when your employers have various matching schemes there actually is a limit to what they could do, which practically none of them do.) Note, that self-directed 401k's contribution limits are also dictated by your revenue, of which 20% of it can be contributed up to the dollar maximums, hence the simple example of $300,000 as 20% of the revenue is $60,000 - the current total contribution maximum for the year
This reduces the remaining taxable income to $240,000, with the governments only getting $91,000
- Next step is to double dip, borrow against the 401k. You can borrow half up to $50,000. If this was the first year of having a 401k then that would be $30,000. Otherwise borrow the entire $50,000
- Donate that $50,000 to charity. There are two or three types you can control yourself. At these proportions of your remaining taxable income, the deduction is 1:1 and the same. The same money, two deductions.
- This brings your taxable income down to $190,000, with the governments only privy to $69,000, and now you have dry powder in your non-profits to donate compliantly.
As you might notice, you also have less discretionary income, for now. If you really want to go down this rabbit hole, the point is to follow the government's incentive model of pursuing certain kinds of transactions, and your failure to do so results in the remainder being taxed. The government incentivizes spending - the movement of money at a high velocity - and penalizes and cripples saving in multiple ways, velocity is more useful for the economy as well. Said another way, the goal is to not let the government have any of it, but there are really good state-approved rationales for that which have nothing to do with having an opinion on its spending habits or a misguided sense of "duty". The roads and schools you care about are still going to be built from other capital sources the state figures out, or property taxes they already levy.
so $69,000 is still too much to send over.
The S-Corp likely has QBI qualified income, and that's another 20% tax deduction
But lets fast forward, your overhead costs and business expenses are another 1:1 tax deduction, and if you have any lines of credit or external money (savings) that you spend on the overhead costs and business expenses then you can spend more than you have made and the tax can go to $0 and you may have losses.
Your net operating losses carryforward to future tax years. And also your charitable deductions are not applied if you have no income and those carryforward for several years as well. Starting your next tax year already in a privileged position.
Right, but now you have no money for the house, car, vacation and consumptive spending, what's the point? Again, this is for now. What you can do is grow your 401k tax free and invest in nearly anything. You can grow your non-profit nearly or totally tax free and invest in nearly anything as well as donate, just like you could if you were using those same funds as an individual. These two vehicles can vastly exceed the financial firepower in your own name.
For your goal of having money for the house, car, vacation and consumptive spending: hopefully the business continues growing. At your discretion you can absolutely spend on consumptive things you like. But ideally you can sell shares in the future and get the long term capital gains tax rate, which is way lower than income. Or you can convert to a C-Corp and sell shares tax free under the QSBS tax rate, if qualified. (QSBS is distinct from QBI, and also California state tax would not be nullified) and in those years you are still rolling over tax deductions from the other years to reduce any outstanding income you recognized in your consumptive spending. You can even convert balances from your 401k to a Roth 401k those years tax free, because the prior year deductions can push that income tax event down to zero as well.
YMMV talk to a CPA to confirm or learn relevant realities.
F paying 100% of the taxes you owe.
But the github thing slowly produced interest in my CNC work, I got a few gigs related to CAM development (I'm not a machinist) once in a while. Until recently where at last I got a real well-paying gig for some real CAM development work. It's a weird redemption: I went from bumming around with my dad's money to earning more than him because of what I did when I was jobless.
And this freedom is one of the best arguments for universal healthcare as a right and universal basic income. So many people have amazing ideas that they will implement and literally pay it forward in multiples if given the chance. I'm quite convinced it would enormously magnify the productivity, creativity, and happiness of an entire society.
(&yes, I know that there would be many that would only become more idle, but the overall benefit would outweigh this. it would be more wasteful to attempt to bureaucratically examine everything to "prevent waste"...)
Reporting back was done only to TED and tbh I never heard from them again. Only constraint was no saving, no pension - you genuinely could do anything.
One day, someone from my community who I never met gave me $10K worth of crypto because they liked what I was working on. They later made more donations over the following year; the total amounted to about $25K in crypto. It was 100% free money, no strings attached, they didn't get anything in return except a special thanks mention on one of my projects.
These donations have been life-changing. I was able to stake the cryptocurrency tokens to gain a special position on a blockchain project. Over the following 3 years, I was able to earn over $100K (just in 'dividends') from that initial $25K investment. I am still earning decent passive income from that original gift (though now it's not enough to live on after crypto crash). The income allowed me to work on various cryptocurrency and open source projects full time for 3 whole years. I completed several major open source projects during this time.
Now I finally understand the expression "A gift that keeps on giving."
- E17 is an area of east london - I never, ever heard from TED ever again. - I would do this again in a heartbeat.
How many actually used it for what they said and how many just took the $ and never did anything?
> I'm coming out of stealth because - in the kindest way - journalists now have my name & want to write about it. Here's the twenty grants I made and what I've learnt doing this:
- https://twitter.com/sarahdrinkwater/status/14025435969565245...
We have so many people looking to put in the work to make things better, but are just lacking the small amount of funding to make it happen.
There's a huge body of theory about mutual aid out there, but it's always nice to see it done in practice.
I've found that doing Service seldom results in direct monetary or ego benefits, and folks that do it for that, may end up disappointed. I guess, maybe they can do a LinkedIn "humblebrag," but those are pretty much worthless, these days.
Sometimes, the recipients of our largesse are not exactly thrilled with it. Being anonymous could actually be a measure of self-protection.
Also, sometimes, they don't need our "help."
I’m not saying basic income doesn’t work, I’m just saying this isn’t the reason it might work.
Don’t take this as me saying unregulated capitalism works even a little bit, you definitely need someone in charge of operating that tool or you end up in our current mess.
(Some of this was invented by Soviet mathematicians like Leonod Khachiyan, whose children now do useful(?) things like run ironic post-Marxist NYC podcasts.)
(Full disclosure: we live in Europe) and my OH - who earns way more than I do - has been moaning about her taxes and deductions since, well, forever.
However in the last few years - and as an entire family - we have hit the state healthcare system pretty hard, including every single member of the family, for a whole variety of reasons. Trips to the ER, accidents, stays in hospital, operations, you name it.
Got some more somewhat frustrating news this morning from our family doctor meaning yet more appointments at the hospital, this time for two more family members, including - but not limited to - an MRI and a gastroscopy.
I was pretty down on the way home from the doctor, but on the plus side, there's basically no cost to us at all for all this additional medical care, other than from having paid the contributions to the state up-front through the taxation system.
Q: You'd prefer to roll the dice that you'll stay healthy?
Maybe for quotidian expenses. But absolutely not for many long term expenses and risks.
My New Zealand government is pretty good at allocating money for common infrastructure and for people’s long-term costs (retirement, healthcare, benefit of education). Most infrastructure wouldn’t happen if we could avoid paying for it as individuals - fairly provable by comparing between countries that have good and poor infrastructure. We all see how much taxation costs us, but too many people deny/unsee the value of the massive benefits we all accrue.
The other aspect that governments can do is to manage risk and insurance, for rare events, which in my experience most people are extremely poor at planning for. When my city Christchurch was hit in 2010 by a devastating earthquake, everyone has the opportunity to see the value of the infrastructure that they lost (destroyed/damaged), and the opportunity to see the value of belonging to a society that fixes our infrastructure.
Also taxation shares the costs between the financial winners and the losers. We tax those that have benefited financially from belonging to a healthy society (people don’t “make” money, their society provides them with their opportunity and the safety to enjoy their gains), and we pay those that screw up (poorly paid job) or have bad luck (lose the genetic lottery, illness etcetera). This is easy to see: take someone who is well off (made themselves) and move them with nothing to a shitty country and see if they rebound: most people would not do well. Cue foreigners with degrees driving taxis.
not op but I think that in order to have a BI that works you would need to have a functioning single payer health care system like the NHS has. The poor people would still spend the money and the money trickles back up into the wealthy but there is a velocity of the money that the rich don't have that poorer people do have because it's spent in the community immediately instead of ticking up in some wealthy person's bank account accruing interest.
This is a contradictory statement. Either it is no cost to you, or you paid up-front.
I wish you the very best.
Perhaps I wasn't quite explicit enough: no additional cost to us, after a condition is diagnosed...
I'm sure there are people who are happy to pay as they go. This is fine, right up until the moment when you roll the dice and discover it isn't.
Start doing it predictably and large scale and it might end up worse than what governments do.
The answer likely involves inflation, maybe deficit spending. An answer like that makes UBI unsustainable.
Europe uses a VAT for this. You probably want that, because it’s the most effective tax at raising revenue, although compliance is a pain and Americans would hate it.
Assuming she gave it away because she is “well off” is just not nice. The journalist I know was poorly paid for a stressful job - the internet has vastly changed the economics of the industry - in fact they lost their job because their is no money in it any more.
I would guess that the writer is a reciprocation type of person: that feels uncomfortable to be just given things. One lady I knew from the UK had it so ingrained that when given a slice of cake, she had to give us something in return. I also see the same thing a lot in New Zealand culture.
There is also a pride aspect. I literally cannot give money to my friends that could really do with it, even though $20 is disposable for me and is really not for them. Social obligation and status signalling make cash really difficult. Oddly enough people often accept gifts of my time and indirect costs, without reciprocation. For example I can spend time and petrol chopping firewood and they will accept the firewood for free, even though it would economically cost me far less to just buy some firewood for them however that would not be acceptable!
Edit: Also she is living in East London which is stereotyped to be relatively poor. The 2021 figures I could find were Waltham Forest (part of Walthamstow) average salary for female £31.6k/year, compared with £27.5k/year for workers in North East England (a poor part of the UK). London is way more expensive to live, so she is relatively worse off at a guess. My stereotype of female journalists is that they are doing it for their beliefs, not for the money (those that chase money go to the dark side).
From the author's bio and article, it appears she is involved in venture capital, angel investing, and gets surprise tax bills which amount to more than the average English person earns in a year. That's probably the kind of person who can part with $10k without much hand wringing. Having said that, I do think the author is commendable in giving it away, because for a ton of people just like her, I believe they would just take the money and do something much more selfish with it.
Does the author of the blog post being the GP of this post change anything I said?