3 ms·

> I think the real lesson here is everyone is getting squeezed out. To me the lesson is if you have any idea how to create a good (> 5%) return on investment,

> I think the real lesson here is everyone is getting squeezed out. To me the lesson is if you have any idea how to create a good (> 5%) return on investment, then it's your time to shine! The world is awash in capital looking for a home, and it could be your project. I would propose the real issue is more of the berkshire hathaway problem, in that there are plenty of opportunities to make good returns, just few of them billion dollar sized (in terms of position size). Consider something like putting solar on one's home. It can have an ROI of 10-30% (quick google), but organizing a multi-million dollar investment on others' homes is administratively tough. So the "little guy" (home owner in this case) can have an opportunity to place ~$50k at a high ROI... Now, if you're talking about really poor (like hand to mouth) then their best investments are likely in education and skills training. A sort of intangible capital that (afaik) no market keeps track of.

orange_tee 6y ago
There are a lot of small time opportunities that would be well suited for the middle class. But most come with these problems: 1. hard to diversify, very few opportunities allow you to split your $300k into $50k investments 2. because of 1. and for other reasons the risk is often quite high 3. very illiquid as for example with PV panels 4. huge time and administration costs as for example with running a corner shop or a kebab stand
- maerF0x0 6y ago
  I guess in general to me those summarize the Middle Class choice. Being middle class means 1. Trading marginal time for additional income/wealth. An example would be renovating your own home on after coming home from work, or being a single unit landlord and having to fix the toilet. You're trading netflix time for additional wealth generation 2. Locked in choices, choosing to own a home is a choice to accept whatever circumstances come in the next 10-25 yrs. You. lock in the the choice and the outcome (home ownership at a certain future date). Any returns beyond that are "luck" but smart middle class people make choices with high likelihood of good outcomes Convenience is a luxury of the upper class.

orange_tee 6y ago

There are a lot of small time opportunities that would be well suited for the middle class. But most come with these problems: 1. hard to diversify, very few opportunities allow you to split your $300k into $50k investments 2. because of 1. and for other reasons the risk is often quite high 3. very illiquid as for example with PV panels 4. huge time and administration costs as for example with running a corner shop or a kebab stand

maerF0x0 6y ago
I guess in general to me those summarize the Middle Class choice. Being middle class means 1. Trading marginal time for additional income/wealth. An example would be renovating your own home on after coming home from work, or being a single unit landlord and having to fix the toilet. You're trading netflix time for additional wealth generation 2. Locked in choices, choosing to own a home is a choice to accept whatever circumstances come in the next 10-25 yrs. You. lock in the the choice and the outcome (home ownership at a certain future date). Any returns beyond that are "luck" but smart middle class people make choices with high likelihood of good outcomes Convenience is a luxury of the upper class.