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> look at the barriers that regulation throws against the average person to keep them from the most lucrative investments (like required accreditation) If anyt

> look at the barriers that regulation throws against the average person to keep them from the most lucrative investments (like required accreditation) If anything, the accredited investor standard is proof that regulation doesn't favor the powerful. Taken as a whole, those aren't the most lucrative investments. They're the riskiest. The whole theory behind it is that if somebody is rich enough we won't try to protect them as much from scams; they're presumed to be sufficiently sophisticated and well resourced that it's their own problem. I agree inflation is a problem, but you can't use that to prove much about the regulatory system, because a) inflation was low and stable for a long time, only increasing due to pandemic-driven disruptions, b) the wealthy are the ones yelling the loudest about pinching off inflation pronto, and c) the classic way to stop an inflationary surge is performative "austerity", which is much more disruptive to the poor than to the rich.

freedomben 5y ago
> Taken as a whole, those aren't the most lucrative investments. They're the riskiest. I'm not an accredited investor but I did mountains of research on it years ago, and most of the time risk does correlate with reward. Also most of the most lucrative investments where people can get really rich are startup investments, which are off limits to most people who aren't already rich. There is definitely a ton of risk in startups, but also so much reward. I think a better system for protecting people would be education/certification based. If the person truly understands the risk, they shouldn't be stopped by the government from investing IMHO. I think the reason many of the richest people want inflation to stop is because it forces them into riskier investments in order to stay ahead of inflation. They care a great deal about maintaining wealth and high inflation erases a big class of "safer" investments from their list of options.
- wpietri 5y ago
  Risk correlates with reward, sure. On a very general basis. But there are a ton of specific exceptions to that. There's plenty of reason to think that opportunities to "get really rich" offered to unsophisticated people without a lot of money will be a big exception. Just think of it from a startup's point of view. Would you want to take a lot of small checks from people who don't know what they're doing and for whom it's a major portion of their assets? I wouldn't, because it's always a bad idea for people to gamble what they can't afford to lose. I'd feel bad taking their money for something I know has a small chance of success. And just as a practical matter it's low return on effort. The people who are most eager to take money like that? Idiots, goofs, and fraudsters who cannot get money from serious investors who know better. In any case, the accredited-investor system already has certification-based exceptions: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-3 https://www.investor.gov/introduction-investing/general-reso...

freedomben 5y ago

> Taken as a whole, those aren't the most lucrative investments. They're the riskiest. I'm not an accredited investor but I did mountains of research on it years ago, and most of the time risk does correlate with reward. Also most of the most lucrative investments where people can get really rich are startup investments, which are off limits to most people who aren't already rich. There is definitely a ton of risk in startups, but also so much reward. I think a better system for protecting people would be education/certification based. If the person truly understands the risk, they shouldn't be stopped by the government from investing IMHO. I think the reason many of the richest people want inflation to stop is because it forces them into riskier investments in order to stay ahead of inflation. They care a great deal about maintaining wealth and high inflation erases a big class of "safer" investments from their list of options.

wpietri 5y ago
Risk correlates with reward, sure. On a very general basis. But there are a ton of specific exceptions to that. There's plenty of reason to think that opportunities to "get really rich" offered to unsophisticated people without a lot of money will be a big exception. Just think of it from a startup's point of view. Would you want to take a lot of small checks from people who don't know what they're doing and for whom it's a major portion of their assets? I wouldn't, because it's always a bad idea for people to gamble what they can't afford to lose. I'd feel bad taking their money for something I know has a small chance of success. And just as a practical matter it's low return on effort. The people who are most eager to take money like that? Idiots, goofs, and fraudsters who cannot get money from serious investors who know better. In any case, the accredited-investor system already has certification-based exceptions: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-3 https://www.investor.gov/introduction-investing/general-reso...