I live in the US (Maryland) and make over 140,000 a year (is it bad that after I hit 6 figures I stopped paying attention to exact salary and so can't recall more accurately then that?). I'm lucky enough to be in a field where there aren't enough programmers to fill the need meaning I have a good amount of job security, if my entire company went bankrupt tomorrow I could find a new company with comparable salary within a few weeks. I'm also a cheap bastard, having shaved down my spending to the point when I live off of only a bit more then minimum wage. The net result is that I have a rather large net income after paying my living expenses, and sufficient savings that I can afford to give away a good amount of that extra income even after ensuring I have a sufficient nest egg.

I had been donating this excess income to charity, GiveWell to be exact, which I would recommend to everyone as one of the most efficient options for charitable donations. However, when Trump changed the tax law he drastically cut back on potential deductions for charitable donations, as such I'm looking to invest this money currently, with the intent of donating it in the future once a new president has taken office and hopefully has changed the tax law to make it more efficient to donate to charity. I'm looking for how best to invest this money in the meantime.

My original intention was to invest in real-estate by buying a home to live in while renting out extra rooms, with the intent to use the property primarily for renting income (I'd take the smallest room myself; I don't need much). I have some advantage here in that I can find roommates from an intranet that are ensured to have been rather thoroughly screened and have decent income; lowering the risk of lack of payment for rent and giving me further leverage for ensuring payment. However, I'm worried that I don't have the organizational skills to reliable handle the logistical hassles of managing real estate, and with my current company I already have more interesting opportunities to work beyond my regular 8 hour work week so even if I'm willing to commit to extra time managing real-estate there may be a more profitable means of spending extra hours earning profit.

I'm currently leaning towards the boring option of putting the money in index funds, though I'm not opposed to real estate if I can prove it has enough ROI to justify the extra hassles for me. However, it feels as if there should be some other investment options available to me.

Alternatively it may be better to bite the bullet and put my money in a donor advised fund (basically a 401k for charitable donations) now, despite paying far more taxes then I use to on the donation, so I can avoid paying taxes on the income in the future.

I currently 'only' have about 10,000 to invest, having already invested a good deal in a few investments, but the potential money to invest builds up fast since I live off of so little of my actual income.

Some of the key points that make my situation a bit different then the average investment advice:

  1. A willingness to invest a relatively high amount of money each month.
  2. Open to very high risk (if the potential ROI justifies it), this is all money I'm planning to give away eventually anyways, so a bad investment won't bankrupt me
  3. I Don't need the money to be liquid. In the end rather I donate the money to charity in 4 years or 30 doesn't matter so long as it eventually goes towards helping people. Higher liquidity is always preferable, if for no other reason then it means I could afford to invest a little more of my nest egg money into a high liquid option as opposed to having to keep more money back for emergency funds; but again a good ROI is worth lower liquidity.
  4. Since the investment is ultimately intended for charity any options that maximize my ability to support charity in the long term is acceptable, such as Donor advised funds or investing in areas where the investment can do more good while earning profits.
  5. I'm ADHD and have to plan accordingly. I know I'm not always the most organized and don't want to invest in any option where poor organizational skills could cost me significantly.

What sort of options should I be looking into investing?

  • 1
    max out your 401k, open and max out an IRA, if your employer offers an HSA max that out too. Once your money for your retirement is maxed out I would recommend doing a boring index fund that tracks the s&p 500. This is a good way for your money to earn you more money. If you want to become a business and manage a rental property (or hire someone to manage for you) then you could look into real estate, but you can't buy much house for 10k (20% down payment is the recommendation) so you will need to save up a little more
    – rhavelka
    Sep 26, 2019 at 16:56

7 Answers 7


To add a bit to what Charles Fox has written:

Lend the money to yourself for your retirement.

In other words put the money into whatever vehicles you would normally use to save for your own retirement. Keep a note of how much of it you would like to have donated, and when the tax laws change in your favour, simply take money you would otherwise have put in your retirement fund and give it to charity. No need to withdraw from the retirement accounts.


tl;dr: Your idea is mathematically a good one, but maybe you still shouldn't do it.

I believe you're on to something with postponing your charitable donations, but for a different reason than you're thinking. It sounds like the change in the standard deduction from 2017 to 2018 affected your ability to deduct donations (as it did many people), since it increased the standard deduction for single filers from $6350 to $12000, meaning that up to $5650 of your charitable donations now are no longer tax deductible. Regardless if a future administration would change this, by aggregating your donations and making them every few years you can maximize the amount of your deduction enabling you to donate even more.

For example, suppose you are single and have deductions totaling $6K, and you can afford to donate $10K. Your deductions would go to $16K, and compared to the standard deduction of $12K you'd have $4K overage reducing your taxes by approximately $1K. This means you could actually afford to donate $11K instead of $10K without changing your budget. But now suppose you put that $10K into a savings account (assume no interest for this exercise) and repeat it for 3 years. On year 3 if you donate the full $30K, $36K-$12K = $24K would now be overage reducing your taxes by approximately $6K, meaning you could donate $36K instead of the $33K you would have donated had you done $10K per year. The longer you wait, the closer you get to achieving the full 25% (actually 24% for federal plus any applicable state tax) deduction used in this example. As you suggest, investing during that time would help increase the donated amount even more.

That being said, I do want to point out that even though your goal is to help charities by donating more money eventually, sometimes time is worth more than actual dollar amounts. Many charities can put immediate funds to good use today which could pay better dividends than more money in the future (think cancer research for example). This also enables the charity to invest the money if they wish to instead of you investing it for them.


Invest in an index fund. Every few years (bunching donation deductability as per TTT's answer), donate the appreciated investments. You will be able to deduct the entire value at time of donation from your taxes.

If they haven't appreciated, you can either wait longer for them to appreciate, or sell them, take up to $3000 the loss off your taxes, and donate the money.

If you wanted to overoptimize, you could invest in 2 or more uncorrelated securities. You could donate the one(s) that appreciated and take the loss on the one(s) that depreciated. This is a similar tactic to the "Roth Conversion Horse Race."


I would recommend reading this article "How to give like a billionaire" it has some interesting suggestions including how to set up a small charitable foundation which allows you to cash out your equity without the associated capital gains.

I'd also recommend avoiding attempting to invest in real estate unless your goal is to use this as a charitable vehicle to provide affordable housing for low-income people. Even people who use real-estate as their primary investment vehicle only see about 6% returns, compared to the potential 10% returns from low-cost index funds. If you're convinced that real-estate is where the real money is going to be in the future though you could invest in REITs through Vanguard-- it'd give you a diversified real-estate portfolio at any price point.


The answer you are looking for is to create a CRUT. Charitable Remainder Unitrust.


A synopsis

  • You can buy/sell the investments inside the trust as you please with no tax consequences, similar to an IRA, except that there is no limit to the amount you can put in the trust.
  • You have the option of paying yourself or your family a steady fixed percentage from the trust every year. You do pay income tax on this steady fixed income that comes out of the trust.
  • When you pass away, the remainder inside the trust goes to charities you specified.

My father created one. Fidelity makes this very easy to do as far as I know.


Retirement accounts can be a great way to save for future charitable gifts. Rather than count as an itemized deduction, Qualified Charitable Distributions do not count as income, which helps some retirees benefit from the standard deduction.

Without knowing your full circumstances, I cannot comment on what is best for you. The above is for educational purposes only and is not tax advice.


You have some misconceptions.

Trump did not change the tax law, he might of proposed it but congress voted for it and approved it. Furthermore, the change in tax law did not remove the deduction for charitable donations but increased the standard deduction so that fewer people would be able to itemize. In effect simplifying the tax form or many. Formerly, the wifey and I itemized, but no longer.

History has proven that either party has sought to roll back tax form simplification efforts. Charitable donations used to be deducted on any version of a 1040, but were moved to Schedule A many years back. It is highly unlikely that subsequent administrations will roll back that portion of the new tax law. Do any of those opposing the current administration talk about rolling that portion of the tax law back? Not from what I have heard.

They may make claims of having the wealthy pay their fair share, but that would not mean a change to the standard deduction. In agreement with the opposition some of the tax law changes does increase the the tax rate on "the wealthy". Capping the mortgage rate deduction only comes into play for those with "high" mortgage balances not those that are more pedestrian.

I do not see any rollback of the 2018 tax law changes as likely.

So investing for that purpose is likely not to help yourself any.

You have 10K to invest, how will that be invested in real estate? Can you buy a home for 10K in Maryland? I assume not. So you will have to get a loan, which means risk, and with your proposal you would also become a landlord. Do you have an interest in becoming a landlord/having a second job?

For most with a long term investment horizon, is to stick with mutual funds. Index funds are great for this purpose, and if you really have an interest in real estate then perhaps some REITs. Invest and forget about it. Very little to manage.

  • 3
    Six paragraphs of political commentary before you actually start answering the question. Oct 28, 2019 at 17:33

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