I’m already four months into year three of my early retirement. Time certainly does fly when you’re having fun, and it’s a sure sign that things are going well.
The money situation is working out too. From early retirement day one, I’ve been carefully tracking our finances. At the start I was nervous about the money, I didn’t know how much early retirement would cost nor whether our passive income would cover it. The good news is that our income has been ahead of our costs each year.
I don’t want to get carried away though. Being relatively young, our money hopefully has to last many more years. And there is always some investment risk or the potential for unforeseen costs, so having a little spare income as an insurance policy feels good.
No doubt we could spend a little more and still be OK. And sometimes we do. Last week, Sally bought a not so cheap bike, a good purchase as cycling is a great way to keep fit and healthy and it's something we can enjoy together. Travel is another area where we sometimes spend a little extra.
However, if we do have a little “spare” money, but I don’t want to spend it just because I can, could or should I consider spending to do good?
We do make some charitable donations. Sally’s mother suffered from cancer and my mother from Alheimer’s. As a result, both passed on some years ago. One of the ways we remember them is by sponsoring ourselves, for example, when I run a marathon or Sally a 10K we make a donation to those causes. The effort of the events make the donations feel particularly meaningful.
We'll continue to do that because those causes are close to our hearts. However, I decided that now's the time to do a little more. This felt like a good spending decision.
Things moved quickly from the good decision feeling to being surprised that giving was far more difficult than I expected. Once I'd got through the process, I sent this message to my friend, Brian, who'd given me some advice:
“I've set up a donation starting today. Used Givewell in the end as they support charities that match my current intentions. The amount isn't huge but is recurring monthly, so not a flash in the pan, and it’s a start.
It's strange that giving has been quite a complicated thing to do. It's difficult to make a choice of whom to give to, and Sally has a view that charity begins at home and so our kids should be the priority. That created some tension that I hadn't expected. Overall, starting my giving journey almost became a less pleasant experience than I imagined. How to feel bad while trying to do good!!?
Anyway, done now, so I'm pleased. I plan to contribute for a year and reassess my choice of beneficiary then.
You should know that you are part of the reason/encouraged me to start, so a feather in your cap”.
Winding back a bit to the process and the challenges that I found. First I defined how much as well as what and where I wanted to focus on:
Where: Less developed countries. I figured that the people and governments of the developed world have the means to cure the problems in their own countries, even if the desire or execution to do so often seems to be questionable.
What: Education. Partly because Sally is a teacher, and partly because of the adage “give a man a fish and feed him for a day, teach a man to fish and feed him for a lifetime”. My instinct was that education gives people the opportunity to lift themselves and their families out of poverty on a more permanent basis.
How much: $75 or $100 a month, and to achieve the biggest impact for every buck. This would be on top of our self-sponsorship for Cancer Research and the Alzheimer's Society.
Then came the challenges:
There are so many charities, how could I choose which ones were the best or the most deserving? Should the target be to save lives or is improving quality of life a better goal? I had decided on human charities rather than animal charities, so at least I didn't have that additional complication.
What would give the most benefit? Were the ones with the highest administration costs bad, or can those higher administration costs result in more effective outcomes?
Was education the best option? I started reading articles that questioned the effectiveness of some types of education charity work.
Was what I read trustworthy? One person said one thing, someone else another. Who was right?
The more I researched the more confused I became.
Just as important was that Sally had her own ideas. She felt that charity begins at home and we should focus on helping our kids. I, on the other hand, believed that we’d given them a good start and, now they're grown, it's important for them to find their own way. We rarely argue, but I became frustrated and this created a tension that wasn’t comfortable.
It really did get to the point where trying to do something good was starting to make me feel pretty bad. I hadn’t expected that.
Despite it being a more difficult process than I expected, I got there in the end. Even if my decision isn't perfect, I concluded that moving forward was superior to procrastination and doing nothing. This is what we’re doing:
I set up a monthly contribution of US$75 to Givewell which I’ll reassess after a year.
Because this is at the lower end of the amounts that I was thinking of, we can give ad hoc amounts to other causes during the year. I need to make sure I do this, and the good news is that it's mission accomplished for April.
We’ll still sponsor ourselves when we do certain events, to support progress in battling cancer and Alheimer’s.
And of course, we’ll always be there for our grown children if needed, but I’m confident that they will do just fine by themselves.
I’m calling this the start of my giving journey. This will make giving around 4% of our costs - I suspect that I could or perhaps should be doing more, but I’m pleased that I’ve taken these first steps which can then lead to next steps. Even though there were a few trying moments along the way, these are nothing compared to the suffering that others face through no fault of their own.
The point of this post is not to say that everyone should donate, volunteer or similar - although it's great when people do. But rather, this post highlights how early retirement is changing some of my behaviours, hopefully in a good way. I have more time to think now, to decide what's important to me and then to then take action. This applies to many things, the topic of this post being just one of them. I’m not doing anything special with my recent giving decisions, rather I suspect I’m just catching up to what I already could have been doing. But without the time to reflect I probably wouldn't have taken these steps.
And the last word, Sébastien had a birthday recently and all that he wanted was donations for the Against Malaria Foundation. How cool does that make Sébastien...very cool in my book.