5 ms·

In my humble opinion, Bitcoin is a better lottery that equity, because it does not require you to work till 2am in morning. Instead of equity, ask for higher s

In my humble opinion, Bitcoin is a better lottery that equity, because it does not require you to work till 2am in morning. Instead of equity, ask for higher salary, and invest the difference in cryptocurrencies, stock market, and even the old-fashioned lottery. Maybe a bit of everything, to balance the portfolio. Your chances are not worse, and you can go sleep before the midnight.

iancmceachern 6y ago
Great thought! It doesn't have to be crypto, it could be any reasonable investment...
- sharkweek 6y ago
  Friend of mine left MSFT back in the early 2010s for a startup that is set to IPO in the next year or two if all the prevailing winds remain relatively similar. He'll do pretty well in the IPO because he has some of those early enough options as one of the first 25ish employees. BUT!!!He left MSFT at $30-40ish a share, now worth $240 a share. Unfortunately, he divested most of it into more general index which has been fine, but not 6x. He would have EASILY covered whatever money he's likely to make in the IPO by just staying at Microsoft and holding company shares for the last 9 years, and in fact probably would have made way more given stock rewards/promotions/salary increases etc. That being said, he has enjoyed working at the startup and it has propelled him into a role that he wouldn't have been in at MSFT or any other big company so there is that to consider as well.
  - t0mas88 6y ago
    Investing in the right single stock always outperforms the index. But risk adjusted returns may not be better than a diversified portfolio, Microsoft could also have dropped due to some scandal whereas the downside risk of a balanced portfolio is much smaller.
    - sharkweek 6y ago
      Absolutely, and him and I both know this, but... I still like to remind him of it (only because we're close enough to prod each other like this).
xwolfi 6y ago
Well but how do you get the money to buy any bitcoin in the first place ? You don't invest in crypto currencies, you join early enough to sell to the next level of the pyramid you convince via social media post :s But well you're right to say people should balance portfolio, I however don't see the value of the lottery, it's like paying taxes twice, with no chance of winning ever. At least bitcoin slowly loses value, a lottery ticket will lost its entire value a few days after purchase in 99.9999% of cases
- tcoff91 6y ago
  Bitcoin slowly loses value? Even those who bought the very top in 2017 have more than doubled their money if they didn't sell. Bitcoin, when it does lose value, loses it very quickly but on longer time horizons nobody has ever lost money by holding bitcoin for 3+ years. That being said, buying at current levels is extraordinarily risky and more equivalent to gambling than anything else. The expected ROI of the lottery is so low though It's hard to take someone seriously that mentions playing the lottery as an actual smart financial move.
  - np- 6y ago
    People doubled their money on paper in unrealized gains. But since Bitcoin is being sold as a store of value and not as a medium of exchange nowadays, if you want to realize that value you need to sell. Where's that cash coming from? Other buyers, i.e. the next layer of suckers as indicated in OP's post. And if enough people decide to sell, then those doubled/tripled/etc values aren't going to last very long. Note I'm not saying that it's not possible to win in this system - clearly some people will, at the expense of many others. Perhaps it's my own ignorance, but I genuinely struggle to see how this isn't a zero sum game.
    - ZephyrBlu 6y ago
      The stock market is zero sum as well... When one person wins, another loses. Are people buying Google, Facebook and Amazon stock suckers as well?
wpietri 6y ago
I think an important difference between equities (your company's options, the regular stock market) and the other things (lottery tickets, digital commodities like Bitcoin, and traditional commodities like gold) is that equities are overall positive sum. The point of (most) businesses is to create value greater than their inputs. Speculating on commodities is in theory zero sum, but in practice negative. Actual lotteries are clearly negative sum. (US state lotteries return only about 60% of the input money as prizes.) So if people aren't sure what to do with surplus time/cash, equity will (on average, over the long haul) produce a better return. Buying an index fund gives you zero control but good odds on a steady return; trading your time for equity (a company you start or one you join) gives you more control and narrow odds on a higher return. There's no one right answer here, though. I'm happy with the startups I've done, but right now I'm happy to be banking a steady salary. A lot of this depends on one's situation in life and one's personal values, especially risk tolerance.

iancmceachern 6y ago

Great thought! It doesn't have to be crypto, it could be any reasonable investment...

sharkweek 6y ago
Friend of mine left MSFT back in the early 2010s for a startup that is set to IPO in the next year or two if all the prevailing winds remain relatively similar. He'll do pretty well in the IPO because he has some of those early enough options as one of the first 25ish employees. BUT!!!He left MSFT at $30-40ish a share, now worth $240 a share. Unfortunately, he divested most of it into more general index which has been fine, but not 6x. He would have EASILY covered whatever money he's likely to make in the IPO by just staying at Microsoft and holding company shares for the last 9 years, and in fact probably would have made way more given stock rewards/promotions/salary increases etc. That being said, he has enjoyed working at the startup and it has propelled him into a role that he wouldn't have been in at MSFT or any other big company so there is that to consider as well.
- t0mas88 6y ago
  Investing in the right single stock always outperforms the index. But risk adjusted returns may not be better than a diversified portfolio, Microsoft could also have dropped due to some scandal whereas the downside risk of a balanced portfolio is much smaller.
  - sharkweek 6y ago
    Absolutely, and him and I both know this, but... I still like to remind him of it (only because we're close enough to prod each other like this).

xwolfi 6y ago

Well but how do you get the money to buy any bitcoin in the first place ? You don't invest in crypto currencies, you join early enough to sell to the next level of the pyramid you convince via social media post :s But well you're right to say people should balance portfolio, I however don't see the value of the lottery, it's like paying taxes twice, with no chance of winning ever. At least bitcoin slowly loses value, a lottery ticket will lost its entire value a few days after purchase in 99.9999% of cases

tcoff91 6y ago
Bitcoin slowly loses value? Even those who bought the very top in 2017 have more than doubled their money if they didn't sell. Bitcoin, when it does lose value, loses it very quickly but on longer time horizons nobody has ever lost money by holding bitcoin for 3+ years. That being said, buying at current levels is extraordinarily risky and more equivalent to gambling than anything else. The expected ROI of the lottery is so low though It's hard to take someone seriously that mentions playing the lottery as an actual smart financial move.
- np- 6y ago
  People doubled their money on paper in unrealized gains. But since Bitcoin is being sold as a store of value and not as a medium of exchange nowadays, if you want to realize that value you need to sell. Where's that cash coming from? Other buyers, i.e. the next layer of suckers as indicated in OP's post. And if enough people decide to sell, then those doubled/tripled/etc values aren't going to last very long. Note I'm not saying that it's not possible to win in this system - clearly some people will, at the expense of many others. Perhaps it's my own ignorance, but I genuinely struggle to see how this isn't a zero sum game.
  - ZephyrBlu 6y ago
    The stock market is zero sum as well... When one person wins, another loses. Are people buying Google, Facebook and Amazon stock suckers as well?

wpietri 6y ago

I think an important difference between equities (your company's options, the regular stock market) and the other things (lottery tickets, digital commodities like Bitcoin, and traditional commodities like gold) is that equities are overall positive sum. The point of (most) businesses is to create value greater than their inputs. Speculating on commodities is in theory zero sum, but in practice negative. Actual lotteries are clearly negative sum. (US state lotteries return only about 60% of the input money as prizes.) So if people aren't sure what to do with surplus time/cash, equity will (on average, over the long haul) produce a better return. Buying an index fund gives you zero control but good odds on a steady return; trading your time for equity (a company you start or one you join) gives you more control and narrow odds on a higher return. There's no one right answer here, though. I'm happy with the startups I've done, but right now I'm happy to be banking a steady salary. A lot of this depends on one's situation in life and one's personal values, especially risk tolerance.