3 ms·

This is a tough subject because it’s an emotional one, and lots of people do make knee jerk reactions. I know plenty of people who feel that they know the cause

by afpx 8y ago

This is a tough subject because it’s an emotional one, and lots of people do make knee jerk reactions. I know plenty of people who feel that they know the causes or consequences or solutions, but yet few of them seem to take a long, deep analysis. For example, the opinion that successful people make decisions X, Y, and Z and unsuccessful people don’t is a very attractive intuition. Yet, it’s very difficult to support without broad longitudinal data. And, even then, how do you control for the many other factors, especially ones that change over time? So, consider your observation that poor people are worse and rich people better (at making decisions). How do you know if there’s survivorship bias at work? That is, without taking a population at birth and requiring them to make ‘the good decisions’ throughout their lives, how do you actually know?

pathseeker 8y ago
>So, consider your observation that poor people are worse and rich people better (at making decisions). Did you read the part of the comment about people going broke who are high-income or receive windfalls? Poor money-management exists across all income bands and starting savings levels.
- afpx 8y ago
  It’s not just about poor money management, but it’s too easy to reduce it to that. Here are a couple examples. Conventional wisdom 30 years ago said that a “good decision” was to graduate high school and get a manufacturing job. A “not so good decision” was to get a degree in computer science. There’s big a reason why ‘nerd’ back then was an offensive term. And, ‘only nerds’ went into compsci, and they didn’t even make much money (compared to, say, a business degree). But, look which decision was better after a few decades. Another example is education, in general. In 1990, everyone was saying that college was the best thing a kid could do to get into the upper middle class. Data showed that any degree would significantly increase wealth over a lifetime. But, yet, just 15 years later, that decision wasn’t so great.

by afpx 8y ago

pathseeker 8y ago

>So, consider your observation that poor people are worse and rich people better (at making decisions). Did you read the part of the comment about people going broke who are high-income or receive windfalls? Poor money-management exists across all income bands and starting savings levels.

afpx 8y ago
It’s not just about poor money management, but it’s too easy to reduce it to that. Here are a couple examples. Conventional wisdom 30 years ago said that a “good decision” was to graduate high school and get a manufacturing job. A “not so good decision” was to get a degree in computer science. There’s big a reason why ‘nerd’ back then was an offensive term. And, ‘only nerds’ went into compsci, and they didn’t even make much money (compared to, say, a business degree). But, look which decision was better after a few decades. Another example is education, in general. In 1990, everyone was saying that college was the best thing a kid could do to get into the upper middle class. Data showed that any degree would significantly increase wealth over a lifetime. But, yet, just 15 years later, that decision wasn’t so great.