I absolutely believe you can and should give some money away. Giving may not add to your net worth, but it can make you happier, and I’ve given enough to our donor advised funds to donate $10,000 a year forever without violating a 4% safe withdrawal rate.
What if I compared a 10% tithe, the type of giving the reader inquired about, with typical investment fees, which are on the order of one to two percent.
At first blush, it seems that math would favor the 1% fee over the 10% tithe. But if that were so, this post would not have gotten out of the gates.
To tithe is to donate 10% of your income to a charitable organization (typically a church).
Typical fees in an investment account are in the range of 1% to 2%. It is possible to keep fees much lower; a DIY investor should be able to create a portfolio with no fees other than the expense ratio built into the investments.
Dr. Bettercheck has a higher salary, but the same spending habits as Dr. Altruism. Without a tithe, the good doctor is on pace to be financially independent in only 13 to 16 years.