Give Now Or Give Later

compounding, trusting, and ego

So I like telling my loved ones about how I want to help the global poor. Part of the reason is because I think they can help me improve my methods of helping, but another reason is because I love talking about myself.

So I tell them that I don’t want to have too much money, that I want to give away money sooner rather than later. If I have $150,000, I have around $50,000 to give away, and I want to give it away sooner rather than later. My loved ones have, in good-faith, debated this point with me:

"But you can give *more* if you let your pile of money build up!”

The Rockefeller Scenario

So obviously, yeah. If you have $100, and you put it into the stock market for 21 years, you’ll probably have around $800 to give to poor people. Eight dollars is more than one dollar! Let’s give this a nice name, like the “Rockefeller Scenario”, because that’s kind of what most rich people do.

The Singer Scenario

But let’s talk about what happens to that $100 if I give it away now! Like, the general idea is that, you give a poor person that $100, that money grows faster than in the Rockefeller Scenario. Peter Singer kind of does this, where he gives away money sooner rather than later. So we’ll call this the Singer Scenario. I think his net worth is under like, $100k.

They can do a few different things with that money. Maybe they have ADHD, and don’t have access to Adderall. So in lieu of that, they spend that $100 on a few grams of methamphetamine, and it’s enough to last them about a year. It helps them function like a “normal” person. You know, when a neurotypical person takes amphetamines, things kind of speed up for them. But when a person with ADHD takes the correct dose, the noise in the mind goes quiet and they’re able to focus on work. Otherwise, trying to work without any medication is kind of like being sleep-deprived and tired all the time.

So they make more money with that $100. If they didn’t have that $100, they’d probably be making less money.

At the end of the year, you tell them, “Hey, remember the nice thing I did for you and how it helped you? I don’t want the money back, but I want to say that there are other people who were in the same situation as you. Why don’t you try paying it forward?”

Ideally, they repeat this good cycle. Hopefully, you end up with a future that looks something like this:

The Time Machine Scenario

The scenario the reader chooses to go with - it depends on how much they think they can grow their money by. Like, if I found an opportunity where I could double my money in one day, and I was 100% certain that it was guaranteed, of course I wouldn’t give the money away before placing that bet.

Let’s say I woke up one day in December 2019, I’d be like, “Oh wow! I know exactly what’s going to happen to the stock market on March 25, 2020. I know exactly what’s going to happen to oil prices in the next four months! I have the chance to multiply my money by 100!”

In some circles they call this a hundred-bagger!

More Money, Less Growth

So, generally speaking, it’s harder to find hundred-baggers and ten-baggers for bigger sums of money. You can probably some opportunities to turn that $10,000 into $100,000 in a short timeframe. But if you have $1,000,000, it’s a lot harder to find ways to turn that into $10,000,000 in the same timeframe.