Is it reasonable to keep an ETF portfolio as a personal safety net?
Hi everyone,
I'd like to get some outside perspectives on a financial/EA question I've been mulling over.
I already donate more than 10% of my gross monthly income and I plan to keep doing that indefinitely. On top of that, I've been running a broadly diversified ETF savings plan (think MSCI World / FTSE All-World style, low-cost, passive).
My reasoning for the ETF plan is twofold:
Personal risk buffer: Life happens — job loss, health issues, unexpected expenses. I live in a wealthy country with a pretty good social system that worst case scenarios are not even that bad but still would feel kinda frightened not saving up some money.
Compounding for future donations: I'm not trying to get rich off this. The plan is to donate a large portion of it later in life (e.g., in my will, or once I've hit certain life milestones and know my own financial needs are secure). My hope is that market growth over decades will let me donate more in inflation-adjusted terms than I could by just giving away smaller amounts today.
So my questions to this community are:
- Does this approach make sense from an EA perspective, or am I rationalizing wealth accumulation with EA language?
- Given the time-value of money and discounting arguments in EA (e.g., "give now vs. give later" debates, existential risk considerations, etc.), would you say it's smarter to just increase my current donation percentage instead of banking on future compounding?