4 ms·

it's much easier to con a greedy person. And you had to be very greedy indeed to convince yourself that 20% interest is a safe investment

closewith 4y ago
> it's much easier to con a greedy person. Or a desperate person.
hnbad 4y ago
> convince yourself that 20% interest is a safe investment So what you're saying is people shouldn't expect to be able to massively multiply their wealth, but that directly contradicts the narrative that "anyone can make it" instead of the wealth and opportunities you're born into determining the likely upper limit of what you can hope for. I'm not disagreeing, but it's absurd to condemn people for falling for "get rich quick" schemes (and as far as those go 20% is unusually low) when the entire society is built around maintaining the lie that getting rich quick is possible as long as you "work smart" (i.e. don't rely on your own physical labor to make money).
- Mordisquitos 4y ago
  > that directly contradicts the narrative that "anyone can make it" instead of the wealth and opportunities you're born into determining the likely upper limit of what you can hope for. It depends on what we understand by "anyone can make it". I would argue that, if understood in terms of "anyone can [become orders of magnitude richer just by picking the right investments]" then that indeed is a narrative that is harmful and should be contradicted. Yes, of course outliers happen, and anyone may become stupidly rich from a low income if they're lucky. That doesn't mean it's a good idea to try, and people on an individual level should be discouraged from taking such huge risks unless they are very consciously aware of the consequences of their likely failure. The other side of the issue is a systemic one. If a society finds it traumatic to accept that there is a likely upper limit as to what people can hope for based on their wealth and opportunities at birth, there is deeper problem. The problem may be cultural in that a society's members are too instilled with self-centred and unrealistic expectations (i.e. a culture of temporarily embarrassed millionaires), or it may be a deeper economic issue regarding inequality of incomes that makes surviving at certain levels of income without any hope of the smallest improvement leads to greater desperation and dreams of "breaking big". It may be a mix of both. Coming back to "anyone can make it", it should be defended, but in the sense of "anyone can [reach a level of economic security to live a fulfilling life]". That however is not a principle to encourage the individual through dire straits. Rather, it is a principle that should guide public policy and cultural attitudes as a whole, so as not to have a society like I described earlier. In such a society the population won't feel the need take unrealistic risks only for a chance to get out of a rut or satisfy cultural fantasies. That's not to say it won't happen, anyone can be an outlier.
  - hnbad 4y ago
    I'm not disagreeing, I'm just saying the far more nuanced "anyone should be able to live comfortably if they put in the work" (along with the realization that this may not currently be possible for some people as "living comfortably" still requires a magnitudal improvement of their current situation because there is a very high floor thanks to the costs of living including healthcare) directly contradicts the popular narrative that considers systemic problems irrelevant to individual success (e.g. the usual talk about guaranteeing "equal opportunities not equal outcomes" falls apart if the opportunities simply can not be equal under the current systems).
- WJW 4y ago
  > when the entire society is built around maintaining the lie Maybe the part of society that contains the crypto enthusiasts. Every part of society with a shred of financial experience has been pointing out that 20% is really really high compared to the risk free interest rate. Of course, pointing out that something is unsafe will not make you popular with the people dreaming of getting rich.
  - hnbad 4y ago
    Okay, if 20% ROI is extremely unrealistic and physical labor is for fools, what's your story for the guy trying to come out of poverty and willing to put in whatever it takes? Are you saying that the poor are just destined to remain poor? I'm not saying the narrative they're told is correct, I'm saying the wealth disparities in society are undesirable and if just telling poor people to pull themselves out of poverty is not viable, we need other solutions to address those disparities.
    - WJW 4y ago
      I don't have a story for the poor guy trying to come out of poverty in the way you mean. The chances of becoming 0.1%-style rich are extremely slim and likely the best shot they have is to slowly work their way up so their children can be middle class and (if the children also work hard towards generational advancement) their grandchildren relatively rich. Getting Kardashian-style rich is unlikely to ever happen for more than a few thousand people in the world at a time. Telling people the truth (becoming extremely rich is very very unlikely) seems better to me than a beautiful but untrue story that might harm them financially (ie: invest in this shitcoin and we're all gonna make it). Like you I think large wealth disparities in society are undesirable, but if those come from the way society is set up then society is what is going to have to change. If you really want to change society then set up a movement and convince large groups of people about your viewpoint, but be prepared for hostility from anyone with a vested interest in the status quo.
matwood 4y ago
> And you had to be very greedy indeed to convince yourself that 20% interest is a safe investment I think there is more nuance that this. People have been burned by many 'safe' investments over the years (housing, stocks) that they incorrectly view the risk profile as similar so look for higher returns. Much has been written on how we under appreciate actual risk, especially in 'safe' investments. There's also some YOLO here, but in a calculated way. A safe investment making 1% still means the wealth gap is widening and that person is still eating ramen. Why not swing for the fences, otherwise it doesn't matter anyway.
- greyhair 4y ago
  Where greed comes in is where people dive into a market precisely because it is going up like crazy, which you only know after it goes up like crazy, then when it takes a down turn, hang on too long because they don't want to give up that expensive thing, then finally sell in a panic. Buying high and selling low is a sure path to being poor.
- ilikehurdles 4y ago
  These are all logical fallacies that are (and have been for ages) conventionally bad patterns to follow in a casino, let alone with life savings.
- sgjohnson 4y ago
  > I think there is more nuance that this. People have been burned by many 'safe' investments over the years (housing, stocks) that they incorrectly view the risk profile as similar so look for higher returns. Much has been written on how we under appreciate actual risk, especially in 'safe' investments. I've got extremely financially literate friends who are adamant that 30-year variable rate mortgages are 0 risk. It's not that they don't assess the risk, but the excuses are always "Inflation will eat it away", "There's no way EURIBOR can climb so high I won't be able to afford payments" and "Negative equity? In this housing market?" Makes me shiver. Especially now that 12 Month EURIBOR rate is above 0%. Sure, a mortgage is 0 risk if you're buying yourself a home for the next 30 years AND have the cash to buy it outright. If you're buying a financial product, perhaps you should reconsider, because it shouldn't be both. Your primary residence is not an investment.
GVIrish 4y ago
It's not necessarily that people thinking 20% interest is safe is greedy. It's that many people don't have the financial literacy to understand that something paying that high of an interest rate is going to be risky. And that if someone 'guarantees' an interest rate of 20% then it's probably a con. So many people just lack the basic literacy to recognize when something sounds too good to be true. And in the crypto market it's worse than that, because all of the memes and in-group behavior functions to drown out warranted skepticism.

closewith 4y ago

> it's much easier to con a greedy person. Or a desperate person.

hnbad 4y ago

> convince yourself that 20% interest is a safe investment So what you're saying is people shouldn't expect to be able to massively multiply their wealth, but that directly contradicts the narrative that "anyone can make it" instead of the wealth and opportunities you're born into determining the likely upper limit of what you can hope for. I'm not disagreeing, but it's absurd to condemn people for falling for "get rich quick" schemes (and as far as those go 20% is unusually low) when the entire society is built around maintaining the lie that getting rich quick is possible as long as you "work smart" (i.e. don't rely on your own physical labor to make money).

Mordisquitos 4y ago
> that directly contradicts the narrative that "anyone can make it" instead of the wealth and opportunities you're born into determining the likely upper limit of what you can hope for. It depends on what we understand by "anyone can make it". I would argue that, if understood in terms of "anyone can [become orders of magnitude richer just by picking the right investments]" then that indeed is a narrative that is harmful and should be contradicted. Yes, of course outliers happen, and anyone may become stupidly rich from a low income if they're lucky. That doesn't mean it's a good idea to try, and people on an individual level should be discouraged from taking such huge risks unless they are very consciously aware of the consequences of their likely failure. The other side of the issue is a systemic one. If a society finds it traumatic to accept that there is a likely upper limit as to what people can hope for based on their wealth and opportunities at birth, there is deeper problem. The problem may be cultural in that a society's members are too instilled with self-centred and unrealistic expectations (i.e. a culture of temporarily embarrassed millionaires), or it may be a deeper economic issue regarding inequality of incomes that makes surviving at certain levels of income without any hope of the smallest improvement leads to greater desperation and dreams of "breaking big". It may be a mix of both. Coming back to "anyone can make it", it should be defended, but in the sense of "anyone can [reach a level of economic security to live a fulfilling life]". That however is not a principle to encourage the individual through dire straits. Rather, it is a principle that should guide public policy and cultural attitudes as a whole, so as not to have a society like I described earlier. In such a society the population won't feel the need take unrealistic risks only for a chance to get out of a rut or satisfy cultural fantasies. That's not to say it won't happen, anyone can be an outlier.
- hnbad 4y ago
  I'm not disagreeing, I'm just saying the far more nuanced "anyone should be able to live comfortably if they put in the work" (along with the realization that this may not currently be possible for some people as "living comfortably" still requires a magnitudal improvement of their current situation because there is a very high floor thanks to the costs of living including healthcare) directly contradicts the popular narrative that considers systemic problems irrelevant to individual success (e.g. the usual talk about guaranteeing "equal opportunities not equal outcomes" falls apart if the opportunities simply can not be equal under the current systems).
WJW 4y ago
> when the entire society is built around maintaining the lie Maybe the part of society that contains the crypto enthusiasts. Every part of society with a shred of financial experience has been pointing out that 20% is really really high compared to the risk free interest rate. Of course, pointing out that something is unsafe will not make you popular with the people dreaming of getting rich.
- hnbad 4y ago
  Okay, if 20% ROI is extremely unrealistic and physical labor is for fools, what's your story for the guy trying to come out of poverty and willing to put in whatever it takes? Are you saying that the poor are just destined to remain poor? I'm not saying the narrative they're told is correct, I'm saying the wealth disparities in society are undesirable and if just telling poor people to pull themselves out of poverty is not viable, we need other solutions to address those disparities.
  - WJW 4y ago
    I don't have a story for the poor guy trying to come out of poverty in the way you mean. The chances of becoming 0.1%-style rich are extremely slim and likely the best shot they have is to slowly work their way up so their children can be middle class and (if the children also work hard towards generational advancement) their grandchildren relatively rich. Getting Kardashian-style rich is unlikely to ever happen for more than a few thousand people in the world at a time. Telling people the truth (becoming extremely rich is very very unlikely) seems better to me than a beautiful but untrue story that might harm them financially (ie: invest in this shitcoin and we're all gonna make it). Like you I think large wealth disparities in society are undesirable, but if those come from the way society is set up then society is what is going to have to change. If you really want to change society then set up a movement and convince large groups of people about your viewpoint, but be prepared for hostility from anyone with a vested interest in the status quo.

matwood 4y ago

> And you had to be very greedy indeed to convince yourself that 20% interest is a safe investment I think there is more nuance that this. People have been burned by many 'safe' investments over the years (housing, stocks) that they incorrectly view the risk profile as similar so look for higher returns. Much has been written on how we under appreciate actual risk, especially in 'safe' investments. There's also some YOLO here, but in a calculated way. A safe investment making 1% still means the wealth gap is widening and that person is still eating ramen. Why not swing for the fences, otherwise it doesn't matter anyway.

greyhair 4y ago
Where greed comes in is where people dive into a market precisely because it is going up like crazy, which you only know after it goes up like crazy, then when it takes a down turn, hang on too long because they don't want to give up that expensive thing, then finally sell in a panic. Buying high and selling low is a sure path to being poor.
ilikehurdles 4y ago
These are all logical fallacies that are (and have been for ages) conventionally bad patterns to follow in a casino, let alone with life savings.
sgjohnson 4y ago
> I think there is more nuance that this. People have been burned by many 'safe' investments over the years (housing, stocks) that they incorrectly view the risk profile as similar so look for higher returns. Much has been written on how we under appreciate actual risk, especially in 'safe' investments. I've got extremely financially literate friends who are adamant that 30-year variable rate mortgages are 0 risk. It's not that they don't assess the risk, but the excuses are always "Inflation will eat it away", "There's no way EURIBOR can climb so high I won't be able to afford payments" and "Negative equity? In this housing market?" Makes me shiver. Especially now that 12 Month EURIBOR rate is above 0%. Sure, a mortgage is 0 risk if you're buying yourself a home for the next 30 years AND have the cash to buy it outright. If you're buying a financial product, perhaps you should reconsider, because it shouldn't be both. Your primary residence is not an investment.

GVIrish 4y ago

It's not necessarily that people thinking 20% interest is safe is greedy. It's that many people don't have the financial literacy to understand that something paying that high of an interest rate is going to be risky. And that if someone 'guarantees' an interest rate of 20% then it's probably a con. So many people just lack the basic literacy to recognize when something sounds too good to be true. And in the crypto market it's worse than that, because all of the memes and in-group behavior functions to drown out warranted skepticism.