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Does giving to charity amplify, hinder, or have no impact on your wealth?

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  • #16
    You make a good point, that it can be best from a tax minimazation standpoint to do a large lump sum in one year.  The concept is similar to those who itemize in alternating years, taking the standard deduction one year and maximizing deductions the next.

    Still though, $180,000 is more than many people will donate in a lifetime.  I've done one lump sum donation to the DAF and plan to do more once I see some actual gains in my taxable portfolio.  I'm treating the DAF as a separate nest egg.  I plan to build it up to about 10% of my retirement nest egg, then donate 4% to 5% from it annually.


    • #17

      Removing the possibility of blessings from deity, which is a big reason why many give, there are several other factors at play.

      Obviously, the money that is given away cannot compound and grow into wealth. So that’s a negative factor.

      However, giving makes you nicer, so people want to work with you more and you end up earning more.

      Giving also forces you to be less greedy and more happy with what you have, so you spend less and thus accumulate more wealth.

      Paying a tithe forces you to do financial planning. You have to at least add up your income and multiply it by 1/10th, which is more than many do.

      Overall, I suspect a little giving amplifies, a lot of giving hinders, and for most people it’s probably a neutral effect. But I have no idea and would love to see good studies on the subject. But whatever they show, I’m going to continue to give.
      Click to expand…

      There are lots of psychology studies like the one referenced here……that consistently show that giving makes one happier.
      Click to expand...

      Right, but the question is does it make you richer.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011