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> you must build ownership in something You can do this by buying index funds, too. That's sorta the whole idea. > He is richer than 99% of FAANG engineers W
by akavi 7y ago
> you must build ownership in something
You can do this by buying index funds, too. That's sorta the whole idea.
> He is richer than 99% of FAANG engineers
Would he be richer than 99% of FAANG engineers who lived the same lifestyle he did during those years and invested the savings in a standard diversified portfolio?
- dangus 7y agoPossibly, but remember, investing in a diversified portfolio doesn't have the same risk profile as starting an HVAC business. This is essentially an example of survivorship bias. How many people starting HVAC businesses just go out of business within 5 years instead? It's not much different than a FAANG engineer buying a bunch of Apple stock in 1998. They could have immense wealth or have gone bust if Apple had gone bankrupt as was the most likely outcome at the time. But with a diversified portfolio we know the outcome, about a 5-10% gain per year over a long-ish period.
- akavi 7y agoYou're right, my point is that a saving-focused FAANG engineer (SFFE) likely has a better risk-adjusted path to wealth as a "worker" than the "ownership" path described by 'gringoDan. An SFFE who was similarly "lucky" with a high variance approach (in their case, by eg, investing in AAPL at the right time) like the anecdotal HVAC businessman would be much wealthier.
- deleted 7y ago[deleted]
- shados 7y agoNot the gp, but I'd think: maybe, maybe not, simply because he did and they did not. Like, I have the skillset and connections required to build a reasonably successful company. I'd very likely be better off than I am right now if I did. I just don't feel like it. So at the end I'm nowhere close to where my friends who did are.