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>I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices... The existence of a financial elite hinges on th

>I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices... The existence of a financial elite hinges on the existence of a non-elite that actually does the work. If workers are putting 25% of their paychecks in an index fund and retire a few years earlier, instead of paying off their too-expensive car loan or something, it will be bad for the current financial elite. In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't.

sixstringtheory 6y ago
> In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't. Maybe, but are you insinuating that no back breaking work would need to be done if money weren’t to exist? Pretty sure the introduction of money reduces the total amount of backbreaking work to be done. Instead of hauling grain to trade for axe heads and carrying those back to your farm, you carry coins, paper, or in modern times, tap a few buttons on your smartphone.
- toomuchtodo 6y ago
  The market would need to find ways to perform the back-breaking work, either by wages increasing or the development of automation. Supply and demand. The more people who can accumulate wealth and capital, and intelligently manage that wealth, the greater the reduction in the labor supply (as they will fund their expenses using investment returns versus engaging in labor activities to do so). Money is an abstraction, but the status quo as a whole (monetary policy, capital markets, labor policy) is designed to ensure a supply of labor. Capital begets capital [1], so those who don't have will engage in riskier behavior to get off the wage slave treadmill. [1] https://news.ycombinator.com/item?id=16592414 https://news.ycombinator.com/item?id=16592414 ("I think capitalism is much simpler: capital begets capital. Those who have capital will accumulate more capital, almost infinitely, until the capital/income ratio reaches an equilibrium who knows how high (in the absence of major corrections like wars and hyper inflation). Add inherited wealth and low taxes. Capitalism's winners are those who already have capital. Thomas Pickety's book "Capital in the 21st Century" cogently illustrates this using massive tax return based data sets.")
  - golemiprague 6y ago
    No need to increase wage, there are enough people around the world willing to do it for cheap, either in their own place or comming in as immigrants, legal or illegal.
- legulere 6y ago
  Very likely much less "work" would need to be done. There are a lot of bullshit jobs that are not productive and are just making people feel bad.
- angus-prune 6y ago
  The grain still needs to be hauled to somewhere else though. If the grain only ever exists on your farm, it has no value to anyone else whether for coins or axe heads.
- cambrianentropy 6y ago
  Barter economies have never existed. Myth starts with Smith.
Aunche 6y ago
> If workers are putting 25% of their paychecks in an index fund and retire a few years earlier, instead of paying off their too-expensive car loan or something, it will be bad for the current financial elite. Nobody is complaining about people placing their paychecks in index funds though. Index funds are a reasonably good proxy for the future health of the economy, so your gains from it will likely represent real growth. By contrast, gains made from cryptocurrency and speculative stock must be coming from someone's losses.
- ksdale 6y ago
  Index funds go up because more people want to buy them than sell them, cryptocurrencies go up because more people want to buy them than sell them. Index funds happen to represent ownership of productive assets, but the assets don't really care who owns them, your investment in an index fund doesn't increase the number of productive assets in the world, likewise with cryptocurrency.
  - scarmig 6y ago
    > our investment in an index fund doesn't increase the number of productive assets in the world Not directly, but it creates an incentive landscape that encourages the formation of more capital, basically making the potential payoff of starting a company larger and more likely.
  - Aunche 6y ago
    > your investment in an index fund doesn't increase the number of productive assets in the world Eventually, some rich people will notice that they aren't getting as much money from buybacks and dividends as they used to and will place their money elsewhere. It would be relatively more attractive to invest in developing countries or buy PR in the form of charity.
  - arcticbull 6y ago
    Index funds are positive sum because companies are positive sum. You buy shares in a productive enterprise, which then generates revenues, and profits. These profits are returned to shareholders via dividends or buybacks, or just through the accretion of value within the enterprise. On the other hand cryptocurrencies are negative sum. The only way the early folks make money is when late folks put money into the system. At the same time, the house (miners) are constantly extracting massive amounts of actual liquidity. The "sum" of Bitcoin is negative 21,000,000,000 per year. This welfare is extracted by Chinese mining cartels bribing their local governments for access to coal-powered electricity. Enough to offset all of the solar panels installed in the entire world. The total amount of wasted power per Bitcoin transaction is now 30 days of power for the average household, and generates 100 grams of non-recyclable e-waste.
bennysomething 6y ago
Money being lost or won is not that. It's a signal that the public as a whole has benefited from the endeavour or not. Loses are a really important signal to stop wasting scarce resources .
anonporridge 6y ago
I do actually wonder if the FIRE movement will come under criticism in the coming years. Does the economy still work if too many people are checking out of their careers in their 30s and 40s? But yeah, it's mostly the financial elite freaking out that their kids might actually have to be a wage slave for a living.
- Shaanie 6y ago
  I really doubt FIRE is popular enough for them to matter in practice. I suspect very few can stand pinching pennies for the 10-25 years it takes to save up the capital.
  - anonporridge 6y ago
    It probably matters more for highly paid professionals who can do it in 5-10 years.
- nostrademons 6y ago
  FIRE folk (and every retiree) are going to get killed by inflation over the next ~5 years. The thing about retirement is that you're on a fixed income, and if you're doing it right you move capital from risk assets like stocks into more deterministic investments like bonds as you get close to needing them. The value of bonds and cash is about to get crushed; it's very hard to plan how much you need to live on when living costs may go up 5-10x or more in the next 5 years.

sixstringtheory 6y ago

> In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't. Maybe, but are you insinuating that no back breaking work would need to be done if money weren’t to exist? Pretty sure the introduction of money reduces the total amount of backbreaking work to be done. Instead of hauling grain to trade for axe heads and carrying those back to your farm, you carry coins, paper, or in modern times, tap a few buttons on your smartphone.

toomuchtodo 6y ago
The market would need to find ways to perform the back-breaking work, either by wages increasing or the development of automation. Supply and demand. The more people who can accumulate wealth and capital, and intelligently manage that wealth, the greater the reduction in the labor supply (as they will fund their expenses using investment returns versus engaging in labor activities to do so). Money is an abstraction, but the status quo as a whole (monetary policy, capital markets, labor policy) is designed to ensure a supply of labor. Capital begets capital [1], so those who don't have will engage in riskier behavior to get off the wage slave treadmill. [1] https://news.ycombinator.com/item?id=16592414 https://news.ycombinator.com/item?id=16592414 ("I think capitalism is much simpler: capital begets capital. Those who have capital will accumulate more capital, almost infinitely, until the capital/income ratio reaches an equilibrium who knows how high (in the absence of major corrections like wars and hyper inflation). Add inherited wealth and low taxes. Capitalism's winners are those who already have capital. Thomas Pickety's book "Capital in the 21st Century" cogently illustrates this using massive tax return based data sets.")
- golemiprague 6y ago
  No need to increase wage, there are enough people around the world willing to do it for cheap, either in their own place or comming in as immigrants, legal or illegal.
legulere 6y ago
Very likely much less "work" would need to be done. There are a lot of bullshit jobs that are not productive and are just making people feel bad.
angus-prune 6y ago
The grain still needs to be hauled to somewhere else though. If the grain only ever exists on your farm, it has no value to anyone else whether for coins or axe heads.
cambrianentropy 6y ago
Barter economies have never existed. Myth starts with Smith.

Aunche 6y ago

> If workers are putting 25% of their paychecks in an index fund and retire a few years earlier, instead of paying off their too-expensive car loan or something, it will be bad for the current financial elite. Nobody is complaining about people placing their paychecks in index funds though. Index funds are a reasonably good proxy for the future health of the economy, so your gains from it will likely represent real growth. By contrast, gains made from cryptocurrency and speculative stock must be coming from someone's losses.

ksdale 6y ago
Index funds go up because more people want to buy them than sell them, cryptocurrencies go up because more people want to buy them than sell them. Index funds happen to represent ownership of productive assets, but the assets don't really care who owns them, your investment in an index fund doesn't increase the number of productive assets in the world, likewise with cryptocurrency.
- scarmig 6y ago
  > our investment in an index fund doesn't increase the number of productive assets in the world Not directly, but it creates an incentive landscape that encourages the formation of more capital, basically making the potential payoff of starting a company larger and more likely.
- Aunche 6y ago
  > your investment in an index fund doesn't increase the number of productive assets in the world Eventually, some rich people will notice that they aren't getting as much money from buybacks and dividends as they used to and will place their money elsewhere. It would be relatively more attractive to invest in developing countries or buy PR in the form of charity.
- arcticbull 6y ago
  Index funds are positive sum because companies are positive sum. You buy shares in a productive enterprise, which then generates revenues, and profits. These profits are returned to shareholders via dividends or buybacks, or just through the accretion of value within the enterprise. On the other hand cryptocurrencies are negative sum. The only way the early folks make money is when late folks put money into the system. At the same time, the house (miners) are constantly extracting massive amounts of actual liquidity. The "sum" of Bitcoin is negative 21,000,000,000 per year. This welfare is extracted by Chinese mining cartels bribing their local governments for access to coal-powered electricity. Enough to offset all of the solar panels installed in the entire world. The total amount of wasted power per Bitcoin transaction is now 30 days of power for the average household, and generates 100 grams of non-recyclable e-waste.

bennysomething 6y ago

Money being lost or won is not that. It's a signal that the public as a whole has benefited from the endeavour or not. Loses are a really important signal to stop wasting scarce resources .

anonporridge 6y ago

I do actually wonder if the FIRE movement will come under criticism in the coming years. Does the economy still work if too many people are checking out of their careers in their 30s and 40s? But yeah, it's mostly the financial elite freaking out that their kids might actually have to be a wage slave for a living.

Shaanie 6y ago
I really doubt FIRE is popular enough for them to matter in practice. I suspect very few can stand pinching pennies for the 10-25 years it takes to save up the capital.
- anonporridge 6y ago
  It probably matters more for highly paid professionals who can do it in 5-10 years.
nostrademons 6y ago
FIRE folk (and every retiree) are going to get killed by inflation over the next ~5 years. The thing about retirement is that you're on a fixed income, and if you're doing it right you move capital from risk assets like stocks into more deterministic investments like bonds as you get close to needing them. The value of bonds and cash is about to get crushed; it's very hard to plan how much you need to live on when living costs may go up 5-10x or more in the next 5 years.