4 ms·

"the #1 reason for any "How I did <anything regarding money>" is really, "I am cheap."" I read it as "what happens when you invest intelligently in a booming r

"the #1 reason for any "How I did <anything regarding money>" is really, "I am cheap."" I read it as "what happens when you invest intelligently in a booming real estate and stock market" (especially the former). I don't think this path is open today.

angstrom 15y ago
That's exactly what I read: Step 1: Be born at the right time to take advantage of market conditions. I see no reason to escape work. Rather my goal has always been to enjoy what I do. No matter the money pile, you'll never be able to repurchase your youth.
- veyron 15y ago
  That is true of almost all success stories though ...
todsul 15y ago
Opportunity abounds at every point in time. Most of all, at times like this when markets are flailing after a severe and (somewhat) protracted period of chaos. Even if we were at the peak of markets (arguably the worst time to invest), there are so many opportunities that oppose real estate and public equities. I'm not talking about selling stocks short, but potentially commodities, natural resources, agriculture, business, and so much more. The thing is, we're not at market peaks. Not even close. If anything, I'd cite this pessimism and cynicism as a good indicator to start buying.
- AJ007 15y ago
  There absolutely are always opportunities, but those opportunities are not always available to those that won't or can't treat the investments as a full time job. As long as there is inflation, all you need to do is buy assets to make money. When there is stagnation or deflation, making money becomes very hard work and luck plays a bigger role. That is because the number of wrong answers exceeds to number of right ones.
  - thematt 15y ago
    There absolutely are always opportunities, but those opportunities are not always available to those that won't or can't treat the investments as a full time job. Perhaps, but more often than not I hear this excuse given by people who don't spend any time researching their investments. According to the BLS, the average American spends 2.7 hours per day watching TV. If that time were instead spent on investing people would be surprised at the difference in the financial situation. As long as there is inflation, all you need to do is buy assets to make money. If you're only keeping pace with inflation I hope you plan to consume a lot less in the future, otherwise you're just treading water. I don't consider that "making" money.
scarmig 15y ago
At this point, investing capital in real estate and stock markets is a fool's errand. They're done. Maybe they're okay as a savings vehicle (maybe!), but you should not realistically expect to make more than 2-3% returns after accounting for inflation, fees, taxes, and time spent on them. And, no, you're not going to be able to consistently outperform people who specialize full time in those kinds of investments and who have access to insider information. The real trick is to invest in something you do have access to insider information about and that you do do full time: being yourself. Invest in human capital, aside from a financial baseline to diversify for when your human capital starts to rapidly depreciate. In some ways this is cheap. Reject certifications besides the most basic (a degree). Focus on getting an education instead. Buying a top of the line computer, high speed internet access, and books to learn from, for developers, is an almost negligible expense that will go a long way. And the most valuable way to learn--creating useful projects--can more than pay for themselves. In other ways this is expensive, though. Choosing to invest in a 401k* takes an hour or two of your life per year, while investing in yourself is at least one or two hours a day. This is very, very expensive if you're already spending 50 hours a week sitting at a computer pounding away at brain-deadening code. (On the other hand, if you can get paid while also increasing your human capital... you've hit gold. Stay there until you've stopped rapidly learning, and then jump to the next big thing.) Key point, though: there are multiple areas you have to invest in. Yes, a professional skill like coding is useful. But who knows what it'll be like in 5 or 10 years? Make sure to put time into your relationships, your physical health, your non-coding hobbies (drawing, banjo, typography, whatever). This diversification exposes you to more long-term investments: they help you maximize your luck surface area and will come in handy surprisingly frequently down the line. How do all these retire-at-30 articles fit in? They aim to maximize financial investments early on by under-investing in many categories of self-capital, hopefully catching a good bull market, and rapidly switching to building self capital at 30. The obvious flaw is the assumption of outsized returns--they're not going to be as big as hoped--but that can be dealt with by tinkering with the numbers a bit. The more fundamental issue is that it's not diversifying. It's risky. If you've saved up 500k by 30 by working long hours and frugally cutting coupons on your time off, that's nice, and if things work out right you might be fine. But suppose the defaulting of some government thousands of miles away sets off a chain reaction of bank failures that ends up massively contracting the economy you live in. There goes most of your savings. Yes, you might have invested in bonds, but you wouldn't have been pulling in those massive returns you were banking on to retire so early. And your job, having been funded by massive amounts of loose capital, suddenly disappears. Oh, you're farked, and you'll have to start nearly from scratch again after the economy recovers. Back to giving up your weekends to the whims of an MBA. (If anyone's willing to hire an expensive 35-year-old developer when there are all these recent college grads willing to work like dogs so they can retire at 30.) Or even simpler: you hand in your resignation on your 30th birthday, walk out the door, and are hit by a semi driven by some overworked and drugged up trucker. Wow, that sucks. At least all those hard-earned dollars will go to some charity or another. The ideal, I think, is to semi-retire as soon as you can, and work 15 to 20 hours a week at jobs you find interesting or fun. You get the best of both worlds and have diluted the amount of risk you face at any one time. *Controversial statement here: 401k's are the biggest scam alive today, you're not only freezing your capital but also betting on taxes being lower in the future than they are today.
kahawe 15y ago
> what happens when you invest intelligently in a booming real estate and stock market Or, more realistically... what happens when you just get lucky swimming on the rising tide. I wonder what OP did after year 10 when the real estate crash and the current financial crisis kicked in? No matter how clever your investments, the whole market came down.

angstrom 15y ago

That's exactly what I read: Step 1: Be born at the right time to take advantage of market conditions. I see no reason to escape work. Rather my goal has always been to enjoy what I do. No matter the money pile, you'll never be able to repurchase your youth.

veyron 15y ago
That is true of almost all success stories though ...

todsul 15y ago

Opportunity abounds at every point in time. Most of all, at times like this when markets are flailing after a severe and (somewhat) protracted period of chaos. Even if we were at the peak of markets (arguably the worst time to invest), there are so many opportunities that oppose real estate and public equities. I'm not talking about selling stocks short, but potentially commodities, natural resources, agriculture, business, and so much more. The thing is, we're not at market peaks. Not even close. If anything, I'd cite this pessimism and cynicism as a good indicator to start buying.

AJ007 15y ago
There absolutely are always opportunities, but those opportunities are not always available to those that won't or can't treat the investments as a full time job. As long as there is inflation, all you need to do is buy assets to make money. When there is stagnation or deflation, making money becomes very hard work and luck plays a bigger role. That is because the number of wrong answers exceeds to number of right ones.
- thematt 15y ago
  There absolutely are always opportunities, but those opportunities are not always available to those that won't or can't treat the investments as a full time job. Perhaps, but more often than not I hear this excuse given by people who don't spend any time researching their investments. According to the BLS, the average American spends 2.7 hours per day watching TV. If that time were instead spent on investing people would be surprised at the difference in the financial situation. As long as there is inflation, all you need to do is buy assets to make money. If you're only keeping pace with inflation I hope you plan to consume a lot less in the future, otherwise you're just treading water. I don't consider that "making" money.

scarmig 15y ago

At this point, investing capital in real estate and stock markets is a fool's errand. They're done. Maybe they're okay as a savings vehicle (maybe!), but you should not realistically expect to make more than 2-3% returns after accounting for inflation, fees, taxes, and time spent on them. And, no, you're not going to be able to consistently outperform people who specialize full time in those kinds of investments and who have access to insider information. The real trick is to invest in something you do have access to insider information about and that you do do full time: being yourself. Invest in human capital, aside from a financial baseline to diversify for when your human capital starts to rapidly depreciate. In some ways this is cheap. Reject certifications besides the most basic (a degree). Focus on getting an education instead. Buying a top of the line computer, high speed internet access, and books to learn from, for developers, is an almost negligible expense that will go a long way. And the most valuable way to learn--creating useful projects--can more than pay for themselves. In other ways this is expensive, though. Choosing to invest in a 401k* takes an hour or two of your life per year, while investing in yourself is at least one or two hours a day. This is very, very expensive if you're already spending 50 hours a week sitting at a computer pounding away at brain-deadening code. (On the other hand, if you can get paid while also increasing your human capital... you've hit gold. Stay there until you've stopped rapidly learning, and then jump to the next big thing.) Key point, though: there are multiple areas you have to invest in. Yes, a professional skill like coding is useful. But who knows what it'll be like in 5 or 10 years? Make sure to put time into your relationships, your physical health, your non-coding hobbies (drawing, banjo, typography, whatever). This diversification exposes you to more long-term investments: they help you maximize your luck surface area and will come in handy surprisingly frequently down the line. How do all these retire-at-30 articles fit in? They aim to maximize financial investments early on by under-investing in many categories of self-capital, hopefully catching a good bull market, and rapidly switching to building self capital at 30. The obvious flaw is the assumption of outsized returns--they're not going to be as big as hoped--but that can be dealt with by tinkering with the numbers a bit. The more fundamental issue is that it's not diversifying. It's risky. If you've saved up 500k by 30 by working long hours and frugally cutting coupons on your time off, that's nice, and if things work out right you might be fine. But suppose the defaulting of some government thousands of miles away sets off a chain reaction of bank failures that ends up massively contracting the economy you live in. There goes most of your savings. Yes, you might have invested in bonds, but you wouldn't have been pulling in those massive returns you were banking on to retire so early. And your job, having been funded by massive amounts of loose capital, suddenly disappears. Oh, you're farked, and you'll have to start nearly from scratch again after the economy recovers. Back to giving up your weekends to the whims of an MBA. (If anyone's willing to hire an expensive 35-year-old developer when there are all these recent college grads willing to work like dogs so they can retire at 30.) Or even simpler: you hand in your resignation on your 30th birthday, walk out the door, and are hit by a semi driven by some overworked and drugged up trucker. Wow, that sucks. At least all those hard-earned dollars will go to some charity or another. The ideal, I think, is to semi-retire as soon as you can, and work 15 to 20 hours a week at jobs you find interesting or fun. You get the best of both worlds and have diluted the amount of risk you face at any one time. *Controversial statement here: 401k's are the biggest scam alive today, you're not only freezing your capital but also betting on taxes being lower in the future than they are today.

kahawe 15y ago

> what happens when you invest intelligently in a booming real estate and stock market Or, more realistically... what happens when you just get lucky swimming on the rising tide. I wonder what OP did after year 10 when the real estate crash and the current financial crisis kicked in? No matter how clever your investments, the whole market came down.