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I am happy they are doing this, I am disappointed they placed such a low cap on what you can invest. I would love to hear more reasons for the investment cap o

I am happy they are doing this, I am disappointed they placed such a low cap on what you can invest. I would love to hear more reasons for the investment cap other than protecting investors from themselves. It seems like such a low cap that you can invest in maybe one startup. I would also love to hear why protecting investors from themselves is a good thing. It's an honest question: what is the merit of putting a cap on what you can invest based on your income? Shouldn't that cap be a personal choice?

nbadg 11y ago
I agree with your reasoning totally. We don't put a cap on how much you can spend in the lottery. Why should we have a cap on something with better odds?
- fweespeech 11y ago
  Well, really, that is just an argument to put a limit on lottery purchases [which we should].
  - nbadg 11y ago
    That really depends on your perspective. I personally think that using wealth as a proxy for... well, really for anything other than wealth, but in this context risk assessment capability and fiscal planning ability, is terrible public policy. If you're concerned with people making poor financial decisions, then you should focus on providing better financial education, instead of restricting the fiscal agency of everyone else in the same income bracket. But that's another discussion entirely. What I am definitely arguing here and now is that there is an inherent hypocrisy in the way we legally treat lotteries and the way we treat investment. Both are seen by their "players" as vehicles for potential financial windfall, and the riskier and less responsible of the two is wholly unregulated and even state-encouraged, while the other is tightly controlled and very difficult to get involved in.
    - fweespeech 11y ago
      > What I am definitely arguing here and now is that there is an inherent hypocrisy in the way we legally treat lotteries ... Yes, and I just said we should regulate lotteries tightly and limit how much people can gamble on them. That removes that hypocrisy. > That really depends on your perspective. I personally think that using wealth as a proxy for... well, really for anything other than wealth, ... If you read my other comment, it has more to do with the risk of them surviving [financially] poor decision making. Someone who makes $100k and puts $10k into risky bets is more likely to survive than someone who makes $30k and does the same thing. Its a question of scale. > then you should focus on providing better financial education, instead of restricting the fiscal agency of everyone else in the same income bracket. Education requires the student to be motivated to learn. There are plenty of resources to learn about financial decisions and community colleges teach relatively cheap personal finance classes.
fweespeech 11y ago
> I would also love to hear why protecting investors from themselves is a good thing. It's an honest question: what is the merit of putting a cap on what you can invest based on your income? Shouldn't that cap be a personal choice? The reality is these bets have ~10% chance of success. People [in aggregate] have a history of being duped into putting too much money into highly risky bets that they don't understand. That doesn't include the outright scams that have happened in the past. At the end of the day, we [the taxpayers] are on the hook for things going badly. [i.e. In the form of investigation, entitlements] So yeah, we should have some say in how much is on the hook. So yes, when I'm on the hook for bailing people out of poor decision making...I don't want them to dump their life savings into it. > Those with an annual income or net worth of less than $100,000 will be allowed to invest up to $2,000 in a 12-month period, or 5 percent of the lesser of their income or net worth, whichever is greater. Those with an income and net worth of more than $100,000 will be permitted to invest up to 10 percent of the lesser of their annual income or net worth. This is pretty reasonable. http://www.bloomberg.com/news/articles/2015-03-30/u-s-consumers-are-saving-at-highest-rate-since-2012 http://www.bloomberg.com/news/articles/2015-03-30/u-s-consum... Most people really don't even save up to these limits. Besides, you really should be dumping the money into tax advantaged accounts anyway. At that point, to hit the cap, we are talking 33% or more of your income being saved. Very, very few people hit that number and they mostly are the /r/FI types who wouldn't touch this except for a minority position in their investments.
- icelancer 11y ago
  > The reality is these bets have ~10% chance of success. Randomly picking stocks - which is heavily advertised on TV, radio, and by your personal broker - has at least as bad of a chance. Yet we glamorize it, do we not?
  - fweespeech 11y ago
    > Randomly picking stocks - which is heavily advertised on TV, radio, and by your personal broker - has at least as bad of a chance. Yet we glamorize it, do we not? ...do we? Most of the investment advice I read says to use things like Vanguard ETFs for broad market funds.

nbadg 11y ago

I agree with your reasoning totally. We don't put a cap on how much you can spend in the lottery. Why should we have a cap on something with better odds?

fweespeech 11y ago
Well, really, that is just an argument to put a limit on lottery purchases [which we should].
- nbadg 11y ago
  That really depends on your perspective. I personally think that using wealth as a proxy for... well, really for anything other than wealth, but in this context risk assessment capability and fiscal planning ability, is terrible public policy. If you're concerned with people making poor financial decisions, then you should focus on providing better financial education, instead of restricting the fiscal agency of everyone else in the same income bracket. But that's another discussion entirely. What I am definitely arguing here and now is that there is an inherent hypocrisy in the way we legally treat lotteries and the way we treat investment. Both are seen by their "players" as vehicles for potential financial windfall, and the riskier and less responsible of the two is wholly unregulated and even state-encouraged, while the other is tightly controlled and very difficult to get involved in.
  - fweespeech 11y ago
    > What I am definitely arguing here and now is that there is an inherent hypocrisy in the way we legally treat lotteries ... Yes, and I just said we should regulate lotteries tightly and limit how much people can gamble on them. That removes that hypocrisy. > That really depends on your perspective. I personally think that using wealth as a proxy for... well, really for anything other than wealth, ... If you read my other comment, it has more to do with the risk of them surviving [financially] poor decision making. Someone who makes $100k and puts $10k into risky bets is more likely to survive than someone who makes $30k and does the same thing. Its a question of scale. > then you should focus on providing better financial education, instead of restricting the fiscal agency of everyone else in the same income bracket. Education requires the student to be motivated to learn. There are plenty of resources to learn about financial decisions and community colleges teach relatively cheap personal finance classes.

fweespeech 11y ago

> I would also love to hear why protecting investors from themselves is a good thing. It's an honest question: what is the merit of putting a cap on what you can invest based on your income? Shouldn't that cap be a personal choice? The reality is these bets have ~10% chance of success. People [in aggregate] have a history of being duped into putting too much money into highly risky bets that they don't understand. That doesn't include the outright scams that have happened in the past. At the end of the day, we [the taxpayers] are on the hook for things going badly. [i.e. In the form of investigation, entitlements] So yeah, we should have some say in how much is on the hook. So yes, when I'm on the hook for bailing people out of poor decision making...I don't want them to dump their life savings into it. > Those with an annual income or net worth of less than $100,000 will be allowed to invest up to $2,000 in a 12-month period, or 5 percent of the lesser of their income or net worth, whichever is greater. Those with an income and net worth of more than $100,000 will be permitted to invest up to 10 percent of the lesser of their annual income or net worth. This is pretty reasonable. http://www.bloomberg.com/news/articles/2015-03-30/u-s-consumers-are-saving-at-highest-rate-since-2012 http://www.bloomberg.com/news/articles/2015-03-30/u-s-consum... Most people really don't even save up to these limits. Besides, you really should be dumping the money into tax advantaged accounts anyway. At that point, to hit the cap, we are talking 33% or more of your income being saved. Very, very few people hit that number and they mostly are the /r/FI types who wouldn't touch this except for a minority position in their investments.

icelancer 11y ago
> The reality is these bets have ~10% chance of success. Randomly picking stocks - which is heavily advertised on TV, radio, and by your personal broker - has at least as bad of a chance. Yet we glamorize it, do we not?
- fweespeech 11y ago
  > Randomly picking stocks - which is heavily advertised on TV, radio, and by your personal broker - has at least as bad of a chance. Yet we glamorize it, do we not? ...do we? Most of the investment advice I read says to use things like Vanguard ETFs for broad market funds.