6 ms·

I have never spoken about this publicly but I found a contract job that paid about $4k for the project a few years ago. It required me hosting a secure database

I have never spoken about this publicly but I found a contract job that paid about $4k for the project a few years ago. It required me hosting a secure database for a couple months and was a run-of-the-mill django project. I coded it up, ran the project and got paid. I put back 30% for taxes and paid the AWS hosting bills (mostly for RDS) of about $500 and gave the rest to someone who was battling cancer. I gave it to them personally, in cash, in all 1's as a joke. It was pretty cool to see over $2,000 in singles packaged up in money transport ziplocks put down in a gift bag. They thought I was giving them a brick as a joke. I tell you what - it made me feel like I was on top of the world. I look back on it and I kind of wish I had figured out how to eat the taxes and give all of it except the hosting costs (I didn't have a ton of expendable income at the time). Reading this story and thinking about them seeing the tax bill reminded me of this. Kudos to them for being able to give all of it on to worthwhile causes. I bet they felt amazing. It is so nice to be able to do something for someone.

Graziano_M 4y ago
Unfortunately it feels better to give to an individual than it does many people, even though we can maximize the good we can do by donating more strategically. If it weren't the case many more would donate to e.g. the effective altruism movement. I'm no better. I donate to charity, but I still feel best about myself for times I helped people change a flat, etc.
- bheadmaster 4y ago
  Charities are often corrupt griftworks. It's hard to know which ones are and which ones aren't. I think helping people in our proximity personally is the best course of action. That way, we know that our money isn't ending up in some greedy grifter's pocket - and if enough people do it, the effect can be greater than that of any charity.
  - toomuchtodo 4y ago
    > It's hard to know which ones are and which ones aren't. https://www.charitynavigator.org/ https://www.charitynavigator.org/
    - lupire 4y ago
      That measures overhead not effectivess.
  - jnwatson 4y ago
    The hardest part about true charity is accepting that much of it will not be spent in a way that you deem to be correct. This applies just as much to individual giving as well as government welfare and NGOs. It is true that many charities are inefficient. Some are fraudulent. Still, it is overall far more effective in the whole to give to organizations that can impact at scale.
    - bheadmaster 4y ago
      > Still, it is overall far more effective in the whole to give to organizations that can impact at scale. You can't know that. Those organizations might as well be making the problem worse, if nothing else then for the sake of keeping the money flowing. See cobra effect: https://en.wikipedia.org/wiki/Perverse_incentive#The_original_cobra_effect https://en.wikipedia.org/wiki/Perverse_incentive#The_origina...
  - whimsicalism 4y ago
    I think this is probably reasoning to reach the conclusion you had already decided you wanted. The impact of a dollar in the developing world is so much more than anyone that you could help who is in close proximity to the typical HN commentator that it would take an absolutely massive amount of graft to equalize the two.
    - dahfizz 4y ago
      I don't think it is so clear cut. Charity money going to third world countries often ends up finding corrupt governments and destroying local markets.
      - whimsicalism 4y ago
        If you're saying such a large proportion of charity money goes towards graft that it is better to donate locally, I would love a source. If I donate to an organization providing malaria nets, most of that money goes to the malaria nets and some goes to funding rigorous verification that the money is going to malaria nets.
        lupire 4y ago
        Yeah AMF is great. But putting all the money in the world exclusively into malaria nets* won't solve all the world's problems though. * (where by the way they also end up poisoning fish and people when the malaria nets become fishing nets)
        whimsicalism 4y ago
        I am not sure when we changed goalposts from "is it a better marginal impact for your dollar" to "does it solve all the world's problems."
        citizenpaul 4y ago
        Most states in the US publish stats on charities operating in their borders. My state has a yearly shame list they publish. One thing I learned from looking at it is that most charities that take in less than $1 mil a year basically are not real charities and keep 99% of the money for 'overhead'
  - lozenge 4y ago
    https://www.givewell.org/ https://www.givewell.org/ https://www.effectivealtruism.org/ https://www.effectivealtruism.org/
  - themitigating 4y ago
    "Are often" do you have data to backup your accusation that covers what I assume would be more than 60% of all charities?
  - yboris 4y ago
    > Charities are often corrupt griftworks. It's hard to know which ones are and which ones aren't. 1. Could you quantify "often"? Are you suggesting at least 10%? If so, that's a bold empirical claim that needs justification. If it's under 10%, then giving $100, even when you know $10 goes to "waste" shouldn't be a deterrent. 2. It's not hard to find charities that are not corrupt (and most-importantly are cost-effective) with the money you give, look at this list of very thoroughly-vetted charities: https://www.givewell.org/charities/top-charities https://www.givewell.org/charities/top-charities
    - deleted 4y ago
      [deleted]
    - bheadmaster 4y ago
      I can't quantify "often" - that's the part of the problem. If I knew that, say, 90% of charities were actually sincere, then I could play the numbers game and know that 90% of the money given will go to those in need. But it could also be the other way around - 90% of charities could actually be fraudulent. If that kind of money went into the pockets of the very people who're making the problem worse (corrupt politicians and other powerful individuals who're destroying their countries), that would make charity a net-negative. There's just no way to know. Websites that act as arbiters of charity justice don't help either, for the same reason - who is verifying the verifiers? It seems to me that the most corrupt charities would be most motivated to boost their numbers on various vetting websites, while the legitimate ones would be too busy actually doing something to bother dealing with internet politics.
      - yboris 4y ago
        I think your skepticism goes too far. If you sincerely would like to help through charitable donations, it would be enough to find one charity and give your money there -- you don't have to engage in the project of finding out what fraction of charities are doing good or bad. Have you looked at GiveWell's review process? What doubts do you have that the charities GiveWell recommends are close-to-impeccable? Are you suggesting the documentation of interviews, onsite visits, etc are not based on reality? To insist on principle without looking at how things are seems to be a disingenuous armchair philosophizing, rather than a desire to do any good.
  - andirk 4y ago
    Giving directly, whether to an individual in need or a specific local org, is often the most effective. Some giant international orgs also have a great track record. https://www.charitynavigator.org/ https://www.charitynavigator.org/ is useful to audit before donating.
- alexb_ 4y ago
  Effective altruists really are the type of people to tell someone that donated thousands of dollars to someone they know with cancer that what they did was a moral fault because it could have saved more lives somewhere else
  - astrange 4y ago
    Calling yourself “effective” before you’ve been effective instead of after is a poor strategy for success.
- PascLeRasc 4y ago
  Your feelings aren't lying to you. The personal satisfaction and motivation to do more that comes from you directly helping your neighbor makes it even better than just changing a flat tire.
- jamespwilliams 4y ago
  You might find https://www.givedirectly.org https://www.givedirectly.org interesting
- umvi 4y ago
  I'd argue there's something to be gained though for directly helping your neighbor vs. donating to charity. When you directly help your neighbor (anonymously or not), there's a human element there that uplifts and enriches the lives of both parties that is largely absent when the help is in the form of an impersonal check in the mail from some organization. When I've done this (personally gone out of my way to help an individual monetarily or otherwise) I've found it increases my empathy and desire to serve others more than having money auto withdrawn from my bank account annually to a charitable organization (which I also do). So I guess what I'm saying is... why not both? Donate to charitable organizations, but not exclusively. Also go out of your way to (anonymously or not) do charitable things to individuals.
  - whimsicalism 4y ago
    > So I guess what I'm saying is... why not both? Donate to charitable organizations, but not exclusively. Also go out of your way to (anonymously or not) do charitable things to individuals. I think this is hard for monetary assistance where there really is a direct tradeoff. It's hard to say well I'll keep this $1000 to help someone I find individually when those $1000 instead donated to a faceless charity would probably save another persons life.
    - umvi 4y ago
      I think equating dollars to lives is too utilitarian a take to be useful IMHO. The goal of charity could be so much more than "lives saved (globally)". It could also be "lives improved (locally)" which cascades into "societies improved (locally)" which further cascades until the effects of local acts of love are far reaching and impact cities, state, and countries. If you don't know an individual who needs the $1000, then sure, donate to charity. But not all charity has to be in the form of large cash gifts and not all charity recipients have to be cancer patients on the verge of death. Sometimes being charitable to individuals is as simple as taking out a coworker or neighbor to lunch and just talking to them. Lots of people suffer from loneliness, depression, and things other than cancer and would benefit enormously from someone going out of their way and showing an act of love to them.
- andai 4y ago
  A lot of charities let you "remote adopt" a poor child or animal, where you make monthly payments to the organization and they send you pictures of or letters from who you adopted. This seems to combine the best of both worlds, where you're funding the whole organization and all its activities in that area, and have this "anchor" to remind you that you're benefiting the lives of real individuals.
  - lupire 4y ago
    That's fake marketing though. May as well download picturea of poverty porn for free on the internet.
- renewiltord 4y ago
  > If it weren't the case many more would donate to e.g. the effective altruism movement. Hmm, should I help a human being or spend all my money writing blog posts on why AI will kill us all? Okay, sure, maybe you want to give to a substack for AI alignment people whose sole output is voluminous reams of content on why AGI is around the corner and a harbinger of doom, but I think this may not be everyone's jam. However, for those who prefer the utilitarian mindset, a friend built https://cosmicbraintrust.org/ https://cosmicbraintrust.org/ so that you can donate to a more worthy cause - an aleph_1 to AI alignment's aleph_0.
yieldcrv 4y ago
Taxes are fun! - You have an S-Corp and have a 401k attached to that Let's say you had a contract of $300,000 and the default tax bill is going to be close to 40% for a California resident (-$120,000, leaving $180,000) - contribute $60,000 to the 401k, since the S-Corp allows you to do both employee contributions ($20,000) and the separate employer contribution maximum ($40,000, when your employers have various matching schemes there actually is a limit to what they could do, which practically none of them do.) Note, that self-directed 401k's contribution limits are also dictated by your revenue, of which 20% of it can be contributed up to the dollar maximums, hence the simple example of $300,000 as 20% of the revenue is $60,000 - the current total contribution maximum for the year This reduces the remaining taxable income to $240,000, with the governments only getting $91,000 - Next step is to double dip, borrow against the 401k. You can borrow half up to $50,000. If this was the first year of having a 401k then that would be $30,000. Otherwise borrow the entire $50,000 - Donate that $50,000 to charity. There are two or three types you can control yourself. At these proportions of your remaining taxable income, the deduction is 1:1 and the same. The same money, two deductions. - This brings your taxable income down to $190,000, with the governments only privy to $69,000, and now you have dry powder in your non-profits to donate compliantly. As you might notice, you also have less discretionary income, for now. If you really want to go down this rabbit hole, the point is to follow the government's incentive model of pursuing certain kinds of transactions, and your failure to do so results in the remainder being taxed. The government incentivizes spending - the movement of money at a high velocity - and penalizes and cripples saving in multiple ways, velocity is more useful for the economy as well. Said another way, the goal is to not let the government have any of it, but there are really good state-approved rationales for that which have nothing to do with having an opinion on its spending habits or a misguided sense of "duty". The roads and schools you care about are still going to be built from other capital sources the state figures out, or property taxes they already levy. so $69,000 is still too much to send over. The S-Corp likely has QBI qualified income, and that's another 20% tax deduction But lets fast forward, your overhead costs and business expenses are another 1:1 tax deduction, and if you have any lines of credit or external money (savings) that you spend on the overhead costs and business expenses then you can spend more than you have made and the tax can go to $0 and you may have losses. Your net operating losses carryforward to future tax years. And also your charitable deductions are not applied if you have no income and those carryforward for several years as well. Starting your next tax year already in a privileged position. Right, but now you have no money for the house, car, vacation and consumptive spending, what's the point? Again, this is for now. What you can do is grow your 401k tax free and invest in nearly anything. You can grow your non-profit nearly or totally tax free and invest in nearly anything as well as donate, just like you could if you were using those same funds as an individual. These two vehicles can vastly exceed the financial firepower in your own name. For your goal of having money for the house, car, vacation and consumptive spending: hopefully the business continues growing. At your discretion you can absolutely spend on consumptive things you like. But ideally you can sell shares in the future and get the long term capital gains tax rate, which is way lower than income. Or you can convert to a C-Corp and sell shares tax free under the QSBS tax rate, if qualified. (QSBS is distinct from QBI, and also California state tax would not be nullified) and in those years you are still rolling over tax deductions from the other years to reduce any outstanding income you recognized in your consumptive spending. You can even convert balances from your 401k to a Roth 401k those years tax free, because the prior year deductions can push that income tax event down to zero as well. YMMV talk to a CPA to confirm or learn relevant realities.
socialismisok 4y ago
I did something similar, I paid back the profit I made from every renter who had been a tenant of mine. I found their dates, estimated what they paid above cost, figured how much my property had appreciated since they stayed with me, and cut them all checks. That was thousands of dollars from me, but it was great to be able to say, "I believe profiting from housing is unethical and I'm willing to actually do something about that." Reactions were incredible. Lots of happiness was shared. A couple folks were able to start savings they didn't have before. I highly encourage the successful folks in this thread to find opportunities for giving like this.
- digdugdirk 4y ago
  ... Do you have any current vacancies?
  - socialismisok 4y ago
    Sadly no, our unit is in use! We have adapted to a model of "here's what our costs are to maintain and insure the space. Adjust your payments based on your income and ability to save." We've had people rent for nothing, rent in exchange for teaching a skill or hobby, pay at cost, or pay more (the money is held to offset people who cannot afford to pay the full cost of room). In general, our rental timelines are short, 3 to 12 months usually. People often need a stepping stone to get themselves a leg up and move on to something else. We're happy to make that possible.
    - renewiltord 4y ago
      Fascinating. I was just thinking that this would be incredibly risky to do in SF. If you rented to them for very cheap for more than 30 days, they'd have the right to live there forever for that much (plus 7% / year which will be nothing).
      - socialismisok 4y ago
        I think in SF you'd still be able to operate an annual lease. Considering the lowest I've gone on rent is $0, I'm not worried if a tenant stays till the end of their year. When I explain how I operate, people tend to understand pretty quickly that it's special. If someone was, say, a Google engineer and trying to pay $0, I'd just not renew or whatever. In general, poor folks aren't going to cheat. If money's tight, they should pay less, that's not cheating it's just sliding the scale to meet them where they are. Whether you are cleaning toilets, flipping burgers, staffing a call center, or any other thankless job out there, you still deserve your dignity. We as a society have decided we think the job you do is important enough to pay someone to do it. You should be able to live your life on that pay. Or even if you are unpaid because you are a refugee, stay at home mom, student, or anything else, you are still a member of my community. You are still my neighbor. And therefore it's worth making sure you are surviving with dignity.

Graziano_M 4y ago

Unfortunately it feels better to give to an individual than it does many people, even though we can maximize the good we can do by donating more strategically. If it weren't the case many more would donate to e.g. the effective altruism movement. I'm no better. I donate to charity, but I still feel best about myself for times I helped people change a flat, etc.

bheadmaster 4y ago
Charities are often corrupt griftworks. It's hard to know which ones are and which ones aren't. I think helping people in our proximity personally is the best course of action. That way, we know that our money isn't ending up in some greedy grifter's pocket - and if enough people do it, the effect can be greater than that of any charity.
- toomuchtodo 4y ago
  > It's hard to know which ones are and which ones aren't. https://www.charitynavigator.org/ https://www.charitynavigator.org/
  - lupire 4y ago
    That measures overhead not effectivess.
- jnwatson 4y ago
  The hardest part about true charity is accepting that much of it will not be spent in a way that you deem to be correct. This applies just as much to individual giving as well as government welfare and NGOs. It is true that many charities are inefficient. Some are fraudulent. Still, it is overall far more effective in the whole to give to organizations that can impact at scale.
  - bheadmaster 4y ago
    > Still, it is overall far more effective in the whole to give to organizations that can impact at scale. You can't know that. Those organizations might as well be making the problem worse, if nothing else then for the sake of keeping the money flowing. See cobra effect: https://en.wikipedia.org/wiki/Perverse_incentive#The_original_cobra_effect https://en.wikipedia.org/wiki/Perverse_incentive#The_origina...
- whimsicalism 4y ago
  I think this is probably reasoning to reach the conclusion you had already decided you wanted. The impact of a dollar in the developing world is so much more than anyone that you could help who is in close proximity to the typical HN commentator that it would take an absolutely massive amount of graft to equalize the two.
  - dahfizz 4y ago
    I don't think it is so clear cut. Charity money going to third world countries often ends up finding corrupt governments and destroying local markets.
    - whimsicalism 4y ago
      If you're saying such a large proportion of charity money goes towards graft that it is better to donate locally, I would love a source. If I donate to an organization providing malaria nets, most of that money goes to the malaria nets and some goes to funding rigorous verification that the money is going to malaria nets.
      - lupire 4y ago
        Yeah AMF is great. But putting all the money in the world exclusively into malaria nets* won't solve all the world's problems though. * (where by the way they also end up poisoning fish and people when the malaria nets become fishing nets)
        whimsicalism 4y ago
        I am not sure when we changed goalposts from "is it a better marginal impact for your dollar" to "does it solve all the world's problems."
      - citizenpaul 4y ago
        Most states in the US publish stats on charities operating in their borders. My state has a yearly shame list they publish. One thing I learned from looking at it is that most charities that take in less than $1 mil a year basically are not real charities and keep 99% of the money for 'overhead'
- lozenge 4y ago
  https://www.givewell.org/ https://www.givewell.org/ https://www.effectivealtruism.org/ https://www.effectivealtruism.org/
- themitigating 4y ago
  "Are often" do you have data to backup your accusation that covers what I assume would be more than 60% of all charities?
- yboris 4y ago
  > Charities are often corrupt griftworks. It's hard to know which ones are and which ones aren't. 1. Could you quantify "often"? Are you suggesting at least 10%? If so, that's a bold empirical claim that needs justification. If it's under 10%, then giving $100, even when you know $10 goes to "waste" shouldn't be a deterrent. 2. It's not hard to find charities that are not corrupt (and most-importantly are cost-effective) with the money you give, look at this list of very thoroughly-vetted charities: https://www.givewell.org/charities/top-charities https://www.givewell.org/charities/top-charities
  - deleted 4y ago
    [deleted]
  - bheadmaster 4y ago
    I can't quantify "often" - that's the part of the problem. If I knew that, say, 90% of charities were actually sincere, then I could play the numbers game and know that 90% of the money given will go to those in need. But it could also be the other way around - 90% of charities could actually be fraudulent. If that kind of money went into the pockets of the very people who're making the problem worse (corrupt politicians and other powerful individuals who're destroying their countries), that would make charity a net-negative. There's just no way to know. Websites that act as arbiters of charity justice don't help either, for the same reason - who is verifying the verifiers? It seems to me that the most corrupt charities would be most motivated to boost their numbers on various vetting websites, while the legitimate ones would be too busy actually doing something to bother dealing with internet politics.
    - yboris 4y ago
      I think your skepticism goes too far. If you sincerely would like to help through charitable donations, it would be enough to find one charity and give your money there -- you don't have to engage in the project of finding out what fraction of charities are doing good or bad. Have you looked at GiveWell's review process? What doubts do you have that the charities GiveWell recommends are close-to-impeccable? Are you suggesting the documentation of interviews, onsite visits, etc are not based on reality? To insist on principle without looking at how things are seems to be a disingenuous armchair philosophizing, rather than a desire to do any good.
- andirk 4y ago
  Giving directly, whether to an individual in need or a specific local org, is often the most effective. Some giant international orgs also have a great track record. https://www.charitynavigator.org/ https://www.charitynavigator.org/ is useful to audit before donating.
alexb_ 4y ago
Effective altruists really are the type of people to tell someone that donated thousands of dollars to someone they know with cancer that what they did was a moral fault because it could have saved more lives somewhere else
- astrange 4y ago
  Calling yourself “effective” before you’ve been effective instead of after is a poor strategy for success.
PascLeRasc 4y ago
Your feelings aren't lying to you. The personal satisfaction and motivation to do more that comes from you directly helping your neighbor makes it even better than just changing a flat tire.
jamespwilliams 4y ago
You might find https://www.givedirectly.org https://www.givedirectly.org interesting
umvi 4y ago
I'd argue there's something to be gained though for directly helping your neighbor vs. donating to charity. When you directly help your neighbor (anonymously or not), there's a human element there that uplifts and enriches the lives of both parties that is largely absent when the help is in the form of an impersonal check in the mail from some organization. When I've done this (personally gone out of my way to help an individual monetarily or otherwise) I've found it increases my empathy and desire to serve others more than having money auto withdrawn from my bank account annually to a charitable organization (which I also do). So I guess what I'm saying is... why not both? Donate to charitable organizations, but not exclusively. Also go out of your way to (anonymously or not) do charitable things to individuals.
- whimsicalism 4y ago
  > So I guess what I'm saying is... why not both? Donate to charitable organizations, but not exclusively. Also go out of your way to (anonymously or not) do charitable things to individuals. I think this is hard for monetary assistance where there really is a direct tradeoff. It's hard to say well I'll keep this $1000 to help someone I find individually when those $1000 instead donated to a faceless charity would probably save another persons life.
  - umvi 4y ago
    I think equating dollars to lives is too utilitarian a take to be useful IMHO. The goal of charity could be so much more than "lives saved (globally)". It could also be "lives improved (locally)" which cascades into "societies improved (locally)" which further cascades until the effects of local acts of love are far reaching and impact cities, state, and countries. If you don't know an individual who needs the $1000, then sure, donate to charity. But not all charity has to be in the form of large cash gifts and not all charity recipients have to be cancer patients on the verge of death. Sometimes being charitable to individuals is as simple as taking out a coworker or neighbor to lunch and just talking to them. Lots of people suffer from loneliness, depression, and things other than cancer and would benefit enormously from someone going out of their way and showing an act of love to them.
andai 4y ago
A lot of charities let you "remote adopt" a poor child or animal, where you make monthly payments to the organization and they send you pictures of or letters from who you adopted. This seems to combine the best of both worlds, where you're funding the whole organization and all its activities in that area, and have this "anchor" to remind you that you're benefiting the lives of real individuals.
- lupire 4y ago
  That's fake marketing though. May as well download picturea of poverty porn for free on the internet.
renewiltord 4y ago
> If it weren't the case many more would donate to e.g. the effective altruism movement. Hmm, should I help a human being or spend all my money writing blog posts on why AI will kill us all? Okay, sure, maybe you want to give to a substack for AI alignment people whose sole output is voluminous reams of content on why AGI is around the corner and a harbinger of doom, but I think this may not be everyone's jam. However, for those who prefer the utilitarian mindset, a friend built https://cosmicbraintrust.org/ https://cosmicbraintrust.org/ so that you can donate to a more worthy cause - an aleph_1 to AI alignment's aleph_0.

yieldcrv 4y ago

Taxes are fun! - You have an S-Corp and have a 401k attached to that Let's say you had a contract of $300,000 and the default tax bill is going to be close to 40% for a California resident (-$120,000, leaving $180,000) - contribute $60,000 to the 401k, since the S-Corp allows you to do both employee contributions ($20,000) and the separate employer contribution maximum ($40,000, when your employers have various matching schemes there actually is a limit to what they could do, which practically none of them do.) Note, that self-directed 401k's contribution limits are also dictated by your revenue, of which 20% of it can be contributed up to the dollar maximums, hence the simple example of $300,000 as 20% of the revenue is $60,000 - the current total contribution maximum for the year This reduces the remaining taxable income to $240,000, with the governments only getting $91,000 - Next step is to double dip, borrow against the 401k. You can borrow half up to $50,000. If this was the first year of having a 401k then that would be $30,000. Otherwise borrow the entire $50,000 - Donate that $50,000 to charity. There are two or three types you can control yourself. At these proportions of your remaining taxable income, the deduction is 1:1 and the same. The same money, two deductions. - This brings your taxable income down to $190,000, with the governments only privy to $69,000, and now you have dry powder in your non-profits to donate compliantly. As you might notice, you also have less discretionary income, for now. If you really want to go down this rabbit hole, the point is to follow the government's incentive model of pursuing certain kinds of transactions, and your failure to do so results in the remainder being taxed. The government incentivizes spending - the movement of money at a high velocity - and penalizes and cripples saving in multiple ways, velocity is more useful for the economy as well. Said another way, the goal is to not let the government have any of it, but there are really good state-approved rationales for that which have nothing to do with having an opinion on its spending habits or a misguided sense of "duty". The roads and schools you care about are still going to be built from other capital sources the state figures out, or property taxes they already levy. so $69,000 is still too much to send over. The S-Corp likely has QBI qualified income, and that's another 20% tax deduction But lets fast forward, your overhead costs and business expenses are another 1:1 tax deduction, and if you have any lines of credit or external money (savings) that you spend on the overhead costs and business expenses then you can spend more than you have made and the tax can go to $0 and you may have losses. Your net operating losses carryforward to future tax years. And also your charitable deductions are not applied if you have no income and those carryforward for several years as well. Starting your next tax year already in a privileged position. Right, but now you have no money for the house, car, vacation and consumptive spending, what's the point? Again, this is for now. What you can do is grow your 401k tax free and invest in nearly anything. You can grow your non-profit nearly or totally tax free and invest in nearly anything as well as donate, just like you could if you were using those same funds as an individual. These two vehicles can vastly exceed the financial firepower in your own name. For your goal of having money for the house, car, vacation and consumptive spending: hopefully the business continues growing. At your discretion you can absolutely spend on consumptive things you like. But ideally you can sell shares in the future and get the long term capital gains tax rate, which is way lower than income. Or you can convert to a C-Corp and sell shares tax free under the QSBS tax rate, if qualified. (QSBS is distinct from QBI, and also California state tax would not be nullified) and in those years you are still rolling over tax deductions from the other years to reduce any outstanding income you recognized in your consumptive spending. You can even convert balances from your 401k to a Roth 401k those years tax free, because the prior year deductions can push that income tax event down to zero as well. YMMV talk to a CPA to confirm or learn relevant realities.

socialismisok 4y ago

I did something similar, I paid back the profit I made from every renter who had been a tenant of mine. I found their dates, estimated what they paid above cost, figured how much my property had appreciated since they stayed with me, and cut them all checks. That was thousands of dollars from me, but it was great to be able to say, "I believe profiting from housing is unethical and I'm willing to actually do something about that." Reactions were incredible. Lots of happiness was shared. A couple folks were able to start savings they didn't have before. I highly encourage the successful folks in this thread to find opportunities for giving like this.

digdugdirk 4y ago
... Do you have any current vacancies?
- socialismisok 4y ago
  Sadly no, our unit is in use! We have adapted to a model of "here's what our costs are to maintain and insure the space. Adjust your payments based on your income and ability to save." We've had people rent for nothing, rent in exchange for teaching a skill or hobby, pay at cost, or pay more (the money is held to offset people who cannot afford to pay the full cost of room). In general, our rental timelines are short, 3 to 12 months usually. People often need a stepping stone to get themselves a leg up and move on to something else. We're happy to make that possible.
  - renewiltord 4y ago
    Fascinating. I was just thinking that this would be incredibly risky to do in SF. If you rented to them for very cheap for more than 30 days, they'd have the right to live there forever for that much (plus 7% / year which will be nothing).
    - socialismisok 4y ago
      I think in SF you'd still be able to operate an annual lease. Considering the lowest I've gone on rent is $0, I'm not worried if a tenant stays till the end of their year. When I explain how I operate, people tend to understand pretty quickly that it's special. If someone was, say, a Google engineer and trying to pay $0, I'd just not renew or whatever. In general, poor folks aren't going to cheat. If money's tight, they should pay less, that's not cheating it's just sliding the scale to meet them where they are. Whether you are cleaning toilets, flipping burgers, staffing a call center, or any other thankless job out there, you still deserve your dignity. We as a society have decided we think the job you do is important enough to pay someone to do it. You should be able to live your life on that pay. Or even if you are unpaid because you are a refugee, stay at home mom, student, or anything else, you are still a member of my community. You are still my neighbor. And therefore it's worth making sure you are surviving with dignity.