Monday, December 31, 2012
Several people I know, all under 30, want to do good. They want to do so much good, in fact, that they donate a large fraction of their income to charity.
This is almost always a bad idea. It’s admirable, but it’s the wrong decision. If you’re under 30, don’t give away large amounts of money, and send this blog post to anyone who does. The reason is simple:
Wealth almost entirely belongs to the old. The median 60-year-old has 45 times (yes, forty-five times) the net worth of the median 30-year-old. 99% – not 80%, not even 95%, but ninety-nine percent – of American billionaires are over 40.
Old people, of course, have more time to accumulate wealth. They’ve also had more time to learn skills, make friends, earn degrees, gain experiences… everything that gives someone higher earning potential. They also have almost all the political power. There are a hundred US Senators, and not a single one is under 40. You can’t even be President until you’re 35. It’s not surprising, then, that old people utterly dominate lists of the wealthy.
What does that imply? Any money a 25-year-old can give – even if they donate half their income – is chump change. It’s a single drop in a large bucket, compared to what they can donate later in life, when they’re older and much much richer. It doesn’t matter. At all. It means nothing.
(Hat Tip: Glenn Reynolds.)