3 ms·

So say the doctor fronts someone money so they can invest in a business, say buying more garbage trucks for their garbage truck fleet or something. Surely the

So say the doctor fronts someone money so they can invest in a business, say buying more garbage trucks for their garbage truck fleet or something. Surely the return on that is earned income? Throwing the money at your preferred wall street instrument of choice is the same thing but with half a million layers of abstraction and redirection all of which involve middle men who either take cuts or otherwise get paid for sorting and bundling, matchmaking, providing liquidity, etc, etc.

pydry 5y ago
>Surely the return on that is earned income? No. Why would it be? Those layers of abstraction cut out the risk such that in many cases cash is the riskier instrument.
- throwaway0a5e 5y ago
  >No. Why would it be? Because the doctor had to evaluate the investment opportunity and risk what they invested. >Those layers of abstraction cut out the risk And that's why you only make pennies on the dollar doing it that way vs the risky way of picking specific things with high growth potential to invest in.
  - pydry 5y ago
    >Because the doctor had to evaluate the investment opportunity and risk what they invested. Unless it's the doctor's hobby somebody usually does this on the doctor's behalf in exchange for a %. This is one of the functions of a well oiled financial industry. If nobody was willing to do this for < expected rate of return then yes, that suggests all the money is earned. >And that's why you only make pennies on the dollar doing it Can you guess the average yearly S&P return over the last 30 years?