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Please read this thread to see the pitfalls that might potentially lie ahead: https://www.reddit.com/r/AskReddit/comments/24vo34/comment/chb4v05/ https://www.re

Please read this thread to see the pitfalls that might potentially lie ahead: https://www.reddit.com/r/AskReddit/comments/24vo34/comment/chb4v05/ https://www.reddit.com/r/AskReddit/comments/24vo34/comment/c... It's about winning the lottery but still applicable to some extent, and shows how people's lives go horribly wrong.

renewiltord 5y ago
Funny. This exemplifies the HN community and its distaste for startups. It’s because everyone here performs total population averages. Perhaps it’s likely that most HN members do behave as a total population average. I am grateful for this insight.
capableweb 5y ago
Not sure it's actually applicable. That Reddit comment is about poor people winning lots of money by chance, not smart people earning lots of money by working. The risks are very different, not to say that the scale between 2 million and 170 million is way bigger than you seem to think.
- eli 5y ago
  Poor people aren’t stupid
  - capableweb 5y ago
    That's not what I said either. Again, the Reddit thread is about people with a small amount of money winning a large amount of money. A person like Saurik working for a bug bounty and getting paid for it is not nearly the same scenario.
  - toolz 5y ago
    If you're poor and gambling, then you're making a stupid financial decision. So the odds of you being financially stupid seem likely to be high.
    - phphphphp 5y ago
      For most people, gambling isn't a financial decision, it's an entertainment decision. The value of thinking about winning (regardless of how unlikely it is) is worth the $1 cost of a lottery ticket, so labelling gambling a "stupid financial decision" is like labelling owning a TV while poor a "stupid financial decision"... but poor people deserve entertainment as much as rich people.
      - toolz 5y ago
        Gambling is not a human right, no one deserves to be able to waste resources they have no matter how much they may or may not enjoy it.
        teawrecks 5y ago
        What? So startups should not be allowed? 90% of them fail after all. The odds of a startup being successful is literally gambling.
        fire 5y ago
        I feel like the difference is that companies are generally intended to be a concerted effort of one or more individuals, as opposed to an actual roll of the dice. Like without getting into nits, you can actually directly effect the direction and value of a company, but you can't affect the roll of dice or the output of a random number generators. Risk in and of itself doesn't imply the entire thing is gambling; that said, investing by itself would be way closer to gambling in that context, imo
        toolz 5y ago
        Are you being sarcastic? I said it is not a human right - no one should guarantee anyone the ability to start a business as it isn't societies responsibility to pay the cost of some individuals risk tolerance. I'm saying the opposite of what you seem to be implying. I'm saying anyone can gamble or start a business, but it's no ones responsibility to make sure they have the option to do so.
  - throwuxiytayq 5y ago
  - deleted 5y ago
    [deleted]
  - boeingUH60 5y ago
    Not the guy you replied too, but I don't think he was implying that poor people are stupid. It's more like people who work for their money and earn it step-by-step are better suited to manage and grow it further. Earning money gradually gives you leeway to slowly adjust your lifestyle to your upgraded monetary status. I'm not sure this is a sound analogy, but imagine someone picking up cigarettes for the first time and building up tolerance over time as they go from one cig a day to two, three, four and so on. Now, compare that to someone suddenly smoking 10 cigs per day. The latter person is more likely to get wrecked from the side effects. Edit: I checked your profile and saw that you're the co-founder of Industry Dive, damn. I love your newsletters and websites!...especially Payments and Banking Dive.
  - xeromal 5y ago
    The poster you replied to didn't say stupid. He said money coming from work and money coming from gambling are going to have different outcomes.
  - GaylordTuring 5y ago
    You mean they aren’t stupid by necessity or that there isn’t a correlation on the population level?
  - jokethrowaway 5y ago
    That's a generalisation and it's invalid like all generalisations. That said, it's more likely that someone whose life ended in poverty is not as smart as someone who can live comfortably. IQ generally correlates with income (you can google a few studies). There are surely tons of reasons that can push smart people into poverty (bad health, poor environment leading to poor choices) but that shouldn't obscure the general trend. That said, I think over a certain IQ, other traits of your personality or the environment will have the predominant effect in determining whether you'll end up poor or not. Similarly, over a certain amount of money, I'm sure there will be more variance. Making 5k more than your peers doesn't mean you're smarter than them - and the fact that you're all able to earn a living and save some money means you're all smart.
  - kortilla 5y ago
    No, but they usually don’t have great money management skills due to not having said money to manage. It’s not any different than warning first time farmers about all of the ways running a farm can go bad.
  - faangiq 5y ago
    Why don’t they get jobs at FAANG then?
- heliodor 5y ago
  I did say that it's applicable to some extent and I'd bet that extent is more than you think! There are plenty of horror stories that are below $10 million.
- slavik81 5y ago
  > Whittaker wasn't a typical lottery winner either. His net worth at the time of his winnings was in excess of $15 million, owing to his ownership of a successful contracting firm in West Virginia. That Reddit comment is not about 'poor people', though it's true the scale is a bit different.
- heartbreak 5y ago
  > is about poor people winning lots of money by chance, not smart people earning lots of money Assuming that was unintentional, now might be a good opportunity to reflect on unconscious bias.
  - capableweb 5y ago
    I come from a poor family and now my family is no longer poor because of my work. I wouldn't say I'm smarter than the average person, but somehow I'm luckier. But with that said, I don't seem to be even smart enough to realize what unconscious bias you're referring to, care to spread some light for me?
    - CRConrad 5y ago
      They use "smart" as the opposite of "poor", which implies that they see "poor" as pretty much synonymous with "stupid".
- wonnage 5y ago
  The first example he gives is an already-rich guy though
kingcharles 5y ago
Wow, that's depressing. I was in jail with a guy who was a total mess. Nice, but seemed pretty mentally-disabled. One day a new guy came on the block. "Wow, what is George doing in here?" "You know him?" "Yeah, I know him. He is one of the greatest musicians I ever met. He can play any instrument like a savant. I knew him a few years ago, just after he inherited $4m when his father passed. He ended up getting in drugs and everyone would hang out at his house." "Wow, who was his dealer?" "Who was his dealer?! EVERYONE was his dealer!" I'd been keeping George in coffee, because he didn't have a single cent on his commissary account (which is rare in jail, even the worst criminals usually have someone out there). Poor George had snorted or injected $4m of drugs and everyone had sold them to him and partied with him until all the money was gone and George's brain was cooked and he went around shaking his fist at the sky until he was arrested. And not one of his hundreds of "friends" would put a cent on his account.
- jacquesm 5y ago
  Interesting: I knew a guy that came into a lot of money. A serious lot. And he found that he had a whole entourage of new friends. Fancy house, gurus, admirers, tons of interesting investment proposals most of which he accepted. And when he died and the accounts were made up it was all gone. Everything. Not a single person around him that did not in some way take advantage of him. I still have a hard time getting around people not being able to deal with their money, especially because in this case it was quite hard earned. Some of the hangers on still haven't recovered from the fact that their 'source of funds' has dried up.
  - boeingUH60 5y ago
    Something similar happened to Tony Hsieh, founder of Zappos (acquired by Amazon for $1.2B), though he still left a considerable fortune after death. https://news.yahoo.com/zappos-founder-tony-hsieh-didnt-174104988.html https://news.yahoo.com/zappos-founder-tony-hsieh-didnt-17410...
    - jacquesm 5y ago
      That's on yet another level. But the parallels are eerie. I wonder how common this is.
dahart 5y ago
Boy do we have the strangest hang ups over people getting lucky. Your link is mostly spinning an untrue story. It’s only a tiny collection of anecdotes, and it’s cherry picking and mostly not true. This bankruptcy thing is a myth that seems to have been made up and won’t die. I’ve looked into this in the past and the only stats I could find that back it up are based on small winnings, not large winnings, contrary to your redditor’s claims, and the bankruptcy rates were temporary. Get this: the bankruptcy rates went down 2 years after winning between $50k-$150k, and then 3 years after that they returned back to normal. The returning back to normal from a low point was cherry-picked and reported widely as bankruptcy rates going up. Misleading, right? Here’s the Florida study this misinformation was based on: https://eml.berkeley.edu/~cle/laborlunch/hoekstra.pdf https://eml.berkeley.edu/~cle/laborlunch/hoekstra.pdf The National Endowment for Financial Education has issued a press release about this bankruptcy misinformation: https://www.nefe.org/news/2018/01/research-statistic-on-financial-windfalls-and-bankruptcy.aspx https://www.nefe.org/news/2018/01/research-statistic-on-fina...
kristofferR 5y ago
I think this link is way more useful: https://www.bogleheads.org/wiki/Managing_a_windfall https://www.bogleheads.org/wiki/Managing_a_windfall
ge96 5y ago
wth you can get sued for making someone else look bad by being better? ha
wesapien 5y ago
One relies on solving a problem and providing a service. The other one relies on having the ability to go to a convenience store and fork over the cost of a lottery ticket. Not even in the same reality.

renewiltord 5y ago

Funny. This exemplifies the HN community and its distaste for startups. It’s because everyone here performs total population averages. Perhaps it’s likely that most HN members do behave as a total population average. I am grateful for this insight.

capableweb 5y ago

Not sure it's actually applicable. That Reddit comment is about poor people winning lots of money by chance, not smart people earning lots of money by working. The risks are very different, not to say that the scale between 2 million and 170 million is way bigger than you seem to think.

eli 5y ago
Poor people aren’t stupid
- capableweb 5y ago
  That's not what I said either. Again, the Reddit thread is about people with a small amount of money winning a large amount of money. A person like Saurik working for a bug bounty and getting paid for it is not nearly the same scenario.
- toolz 5y ago
  If you're poor and gambling, then you're making a stupid financial decision. So the odds of you being financially stupid seem likely to be high.
  - phphphphp 5y ago
    For most people, gambling isn't a financial decision, it's an entertainment decision. The value of thinking about winning (regardless of how unlikely it is) is worth the $1 cost of a lottery ticket, so labelling gambling a "stupid financial decision" is like labelling owning a TV while poor a "stupid financial decision"... but poor people deserve entertainment as much as rich people.
    - toolz 5y ago
      Gambling is not a human right, no one deserves to be able to waste resources they have no matter how much they may or may not enjoy it.
      - teawrecks 5y ago
        What? So startups should not be allowed? 90% of them fail after all. The odds of a startup being successful is literally gambling.
        fire 5y ago
        I feel like the difference is that companies are generally intended to be a concerted effort of one or more individuals, as opposed to an actual roll of the dice. Like without getting into nits, you can actually directly effect the direction and value of a company, but you can't affect the roll of dice or the output of a random number generators. Risk in and of itself doesn't imply the entire thing is gambling; that said, investing by itself would be way closer to gambling in that context, imo
        toolz 5y ago
        Are you being sarcastic? I said it is not a human right - no one should guarantee anyone the ability to start a business as it isn't societies responsibility to pay the cost of some individuals risk tolerance. I'm saying the opposite of what you seem to be implying. I'm saying anyone can gamble or start a business, but it's no ones responsibility to make sure they have the option to do so.
- throwuxiytayq 5y ago
- deleted 5y ago
  [deleted]
- boeingUH60 5y ago
  Not the guy you replied too, but I don't think he was implying that poor people are stupid. It's more like people who work for their money and earn it step-by-step are better suited to manage and grow it further. Earning money gradually gives you leeway to slowly adjust your lifestyle to your upgraded monetary status. I'm not sure this is a sound analogy, but imagine someone picking up cigarettes for the first time and building up tolerance over time as they go from one cig a day to two, three, four and so on. Now, compare that to someone suddenly smoking 10 cigs per day. The latter person is more likely to get wrecked from the side effects. Edit: I checked your profile and saw that you're the co-founder of Industry Dive, damn. I love your newsletters and websites!...especially Payments and Banking Dive.
- xeromal 5y ago
  The poster you replied to didn't say stupid. He said money coming from work and money coming from gambling are going to have different outcomes.
- GaylordTuring 5y ago
  You mean they aren’t stupid by necessity or that there isn’t a correlation on the population level?
- jokethrowaway 5y ago
  That's a generalisation and it's invalid like all generalisations. That said, it's more likely that someone whose life ended in poverty is not as smart as someone who can live comfortably. IQ generally correlates with income (you can google a few studies). There are surely tons of reasons that can push smart people into poverty (bad health, poor environment leading to poor choices) but that shouldn't obscure the general trend. That said, I think over a certain IQ, other traits of your personality or the environment will have the predominant effect in determining whether you'll end up poor or not. Similarly, over a certain amount of money, I'm sure there will be more variance. Making 5k more than your peers doesn't mean you're smarter than them - and the fact that you're all able to earn a living and save some money means you're all smart.
- kortilla 5y ago
  No, but they usually don’t have great money management skills due to not having said money to manage. It’s not any different than warning first time farmers about all of the ways running a farm can go bad.
- faangiq 5y ago
  Why don’t they get jobs at FAANG then?
heliodor 5y ago
I did say that it's applicable to some extent and I'd bet that extent is more than you think! There are plenty of horror stories that are below $10 million.
slavik81 5y ago
> Whittaker wasn't a typical lottery winner either. His net worth at the time of his winnings was in excess of $15 million, owing to his ownership of a successful contracting firm in West Virginia. That Reddit comment is not about 'poor people', though it's true the scale is a bit different.
heartbreak 5y ago
> is about poor people winning lots of money by chance, not smart people earning lots of money Assuming that was unintentional, now might be a good opportunity to reflect on unconscious bias.
- capableweb 5y ago
  I come from a poor family and now my family is no longer poor because of my work. I wouldn't say I'm smarter than the average person, but somehow I'm luckier. But with that said, I don't seem to be even smart enough to realize what unconscious bias you're referring to, care to spread some light for me?
  - CRConrad 5y ago
    They use "smart" as the opposite of "poor", which implies that they see "poor" as pretty much synonymous with "stupid".
wonnage 5y ago
The first example he gives is an already-rich guy though

kingcharles 5y ago

Wow, that's depressing. I was in jail with a guy who was a total mess. Nice, but seemed pretty mentally-disabled. One day a new guy came on the block. "Wow, what is George doing in here?" "You know him?" "Yeah, I know him. He is one of the greatest musicians I ever met. He can play any instrument like a savant. I knew him a few years ago, just after he inherited $4m when his father passed. He ended up getting in drugs and everyone would hang out at his house." "Wow, who was his dealer?" "Who was his dealer?! EVERYONE was his dealer!" I'd been keeping George in coffee, because he didn't have a single cent on his commissary account (which is rare in jail, even the worst criminals usually have someone out there). Poor George had snorted or injected $4m of drugs and everyone had sold them to him and partied with him until all the money was gone and George's brain was cooked and he went around shaking his fist at the sky until he was arrested. And not one of his hundreds of "friends" would put a cent on his account.

jacquesm 5y ago
Interesting: I knew a guy that came into a lot of money. A serious lot. And he found that he had a whole entourage of new friends. Fancy house, gurus, admirers, tons of interesting investment proposals most of which he accepted. And when he died and the accounts were made up it was all gone. Everything. Not a single person around him that did not in some way take advantage of him. I still have a hard time getting around people not being able to deal with their money, especially because in this case it was quite hard earned. Some of the hangers on still haven't recovered from the fact that their 'source of funds' has dried up.
- boeingUH60 5y ago
  Something similar happened to Tony Hsieh, founder of Zappos (acquired by Amazon for $1.2B), though he still left a considerable fortune after death. https://news.yahoo.com/zappos-founder-tony-hsieh-didnt-174104988.html https://news.yahoo.com/zappos-founder-tony-hsieh-didnt-17410...
  - jacquesm 5y ago
    That's on yet another level. But the parallels are eerie. I wonder how common this is.

dahart 5y ago

Boy do we have the strangest hang ups over people getting lucky. Your link is mostly spinning an untrue story. It’s only a tiny collection of anecdotes, and it’s cherry picking and mostly not true. This bankruptcy thing is a myth that seems to have been made up and won’t die. I’ve looked into this in the past and the only stats I could find that back it up are based on small winnings, not large winnings, contrary to your redditor’s claims, and the bankruptcy rates were temporary. Get this: the bankruptcy rates went down 2 years after winning between $50k-$150k, and then 3 years after that they returned back to normal. The returning back to normal from a low point was cherry-picked and reported widely as bankruptcy rates going up. Misleading, right? Here’s the Florida study this misinformation was based on: https://eml.berkeley.edu/~cle/laborlunch/hoekstra.pdf https://eml.berkeley.edu/~cle/laborlunch/hoekstra.pdf The National Endowment for Financial Education has issued a press release about this bankruptcy misinformation: https://www.nefe.org/news/2018/01/research-statistic-on-financial-windfalls-and-bankruptcy.aspx https://www.nefe.org/news/2018/01/research-statistic-on-fina...

kristofferR 5y ago

I think this link is way more useful: https://www.bogleheads.org/wiki/Managing_a_windfall https://www.bogleheads.org/wiki/Managing_a_windfall

ge96 5y ago

wth you can get sued for making someone else look bad by being better? ha

wesapien 5y ago

One relies on solving a problem and providing a service. The other one relies on having the ability to go to a convenience store and fork over the cost of a lottery ticket. Not even in the same reality.