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> The reason it's easy for them to invest is that they can spare a big fraction of their money and even if it catches fire they won't lose their shirt. Let's d

by maratd 10y ago

> The reason it's easy for them to invest is that they can spare a big fraction of their money and even if it catches fire they won't lose their shirt. Let's do an experiment! Take $2K out of your savings account. Put $1K in one pocket and $1K in the other pocket. Your left pocket is your safety net and your right pocket is your "get rich" fund. Now go to a casino. Play a little. After that, let me know what you think about rich people "investing" their money, my analogy, and how they should really do it.

Dylan16807 10y ago
I don't understand where you're going with this at all. The decision-making I outlined depends on net worth, and you didn't specify whether I'm rich or poor. The decision-making I outlined says to never try to make money at a casino, because the expected returns are negative. But if I assume I'm rich, and I spend my $1K at the casino... well I probably have some alcohol and have fun, so great? I still have tons of money left?? I'm really not sure what this is supposed to demonstrate. If I'm poor then I lose it all and I'm sad because I needed that money. The very fact that you call it a "get rich" fund is totally against my argument. I said you should not use risky bets to try to get rich. Only risk your money if you can spare the money. (And only risk your money on things with high expected returns, duh.)
- maratd 10y ago
  > I don't understand where you're going with this at all. Because you've never been to a casino. Because you've never gambled and won. Because you don't understand human nature. Because you're trying to rationalize your way to the answer through logic, but people don't invest or live that way. If you try what I asked you to do, you'll understand. You'll also understand why those who are wealthy invest the way they do and why I said what I did. I'll repeat what I said. It makes perfect sense for those who are wealthy to invest conservatively. If you find yourself with lots of money at the casino, the best course of action is to leave.
  - Dylan16807 10y ago
    > If you find yourself with lots of money at the casino, the best course of action is to leave. And if you find yourself with not much money at a casino, the best course of action is to leave. The casino provides no insight into who should bet on investments with positive expected returns. I'm talking about how people should invest anyway. Actual behavior is largely irrelevant to that. > If you try what I asked you to do, you'll understand. Physically going to a casino and winning or losing fifty dollars is not going to explain anything. > I'll repeat what I said. It makes perfect sense for those who are wealthy to invest conservatively. Sure, it's a fine strategy. But it's even better for poor people to invest conservatively, in my book. How about you explain why you think it's a bad strategy for poor people? I'll put that again, to make sure nothing is misunderstood: I think investing conservatively is an okay strategy for everyone. But I think the wealthy should be more inclined than the poor to pick up risky bets with high potential rewards, with part of their money.

by maratd 10y ago

Dylan16807 10y ago

I don't understand where you're going with this at all. The decision-making I outlined depends on net worth, and you didn't specify whether I'm rich or poor. The decision-making I outlined says to never try to make money at a casino, because the expected returns are negative. But if I assume I'm rich, and I spend my $1K at the casino... well I probably have some alcohol and have fun, so great? I still have tons of money left?? I'm really not sure what this is supposed to demonstrate. If I'm poor then I lose it all and I'm sad because I needed that money. The very fact that you call it a "get rich" fund is totally against my argument. I said you should not use risky bets to try to get rich. Only risk your money if you can spare the money. (And only risk your money on things with high expected returns, duh.)

maratd 10y ago
> I don't understand where you're going with this at all. Because you've never been to a casino. Because you've never gambled and won. Because you don't understand human nature. Because you're trying to rationalize your way to the answer through logic, but people don't invest or live that way. If you try what I asked you to do, you'll understand. You'll also understand why those who are wealthy invest the way they do and why I said what I did. I'll repeat what I said. It makes perfect sense for those who are wealthy to invest conservatively. If you find yourself with lots of money at the casino, the best course of action is to leave.
- Dylan16807 10y ago
  > If you find yourself with lots of money at the casino, the best course of action is to leave. And if you find yourself with not much money at a casino, the best course of action is to leave. The casino provides no insight into who should bet on investments with positive expected returns. I'm talking about how people should invest anyway. Actual behavior is largely irrelevant to that. > If you try what I asked you to do, you'll understand. Physically going to a casino and winning or losing fifty dollars is not going to explain anything. > I'll repeat what I said. It makes perfect sense for those who are wealthy to invest conservatively. Sure, it's a fine strategy. But it's even better for poor people to invest conservatively, in my book. How about you explain why you think it's a bad strategy for poor people? I'll put that again, to make sure nothing is misunderstood: I think investing conservatively is an okay strategy for everyone. But I think the wealthy should be more inclined than the poor to pick up risky bets with high potential rewards, with part of their money.