5 ms·

> It's not that they want to get rich quick. They just want to make a lot of money really fast. In their defence, I feel like this is fuelled by media FUD as w

by yunohn 4y ago

> It's not that they want to get rich quick. They just want to make a lot of money really fast. In their defence, I feel like this is fuelled by media FUD as well as FOMO from the ever-widening wealth gap. A combination of inflation and unaffordable housing along with stagnant wages means that even with everyone in the family working jobs, you can’t even afford a yearly vacation. If the wealthy elites don’t realise that this isn’t sustainable, I’m not sure where we will be in a few years…

dalyons 4y ago
Exactly, people aren’t always stupid, they’re desperate. Investing in index funds at ~6% average return (or thereabouts) does nothing meaningful for people who are priced out by the 10-15% y/y gains on housing, or are living paycheck to paycheck due to inflation. Its not so hard to see why people feel their only option is riskier bets.
- gruez 4y ago
  >does nothing meaningful for people who are priced out by the 10-15% y/y gains on housing Housing never had gains that high. Looking at the rise from the last trough (ie. 2009 to today) works out to 5.3% annualized nationwide[1]. Meanwhile the Vanguard Total Stock Market Index Fund returned 12.4% in the same time period. If you look around at a few different metros, there are many cities that return higher (eg. 7.5% for LA[2]), but none are anywhere close to returns for the index fund. The best I found was arizona[3] with 9.1%. [1] https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA [2] https://fred.stlouisfed.org/series/LXXRSA https://fred.stlouisfed.org/series/LXXRSA [3] https://fred.stlouisfed.org/series/PHXRSA https://fred.stlouisfed.org/series/PHXRSA
- SturgeonsLaw 4y ago
  This is the key that is overlooked a lot. Taking /biz as an example, the sentiment is rife that crypto is their one and only shot to make it out of the hole. Couple that with the "how much do you make" threads that show a lot of them earn somewhere in the $15-$30 per hour range and you can see why these moonshots are (in their view) their only hope. If the most they can scrape together is $5k of capital, then it needs to 10x to provide them with a meaningful change.
jmyeet 4y ago
I agree, which is why everyone who lives off an income rather than assets (which is ~99.5% of us) should be a leftist and support labor organization as that is the only thing that'll actually improve their material conditions. And I mean leftist in the actual sense, not a feckless liberal in the US Democratic Party sense who still ultimately exist to defend the capital-owning class. The so-called Great Resignation and worker shortage was really the first increase in real wages many had seen in 40 years. And what's happened since? Massive inflation, particularly of essentials like housing. That's not an accident. The system is designed such that a budget shortfall is built into your existence. A workforce that is living paycheck-to-paycheck and barely hanging on is a compliant workforce. They're definitely showing up to work and not making trouble. That's the point. Working people of any race, gender, sexual orientation or age have way more in common with each other than they do with the capital-owning class who routinely create wedge issues to avoid any sort of class solidarity. But people don't want to hear that either.
- gruez 4y ago
  >I agree, which is why everyone who lives off an income rather than assets (which is ~99.5% of us) I think you're greatly underestimating how many people can "live off [...] assets". This page shows household net worth by percentile[1]. Based off that, you can probably live off investments starting at around the 90th percentile ($61k annual income with 5% withdraw rate), if you live modestly in a low CoL state. Once you get around the 95th percentile you can probably live comfortably in a high CoL state ($129k/year, translates to 87th percentile in california), and by the time you get to the 99th percentile, you can probably live as well as dual earner households with high paying careers ($555k). [1] https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/ [2] https://dqydj.com/income-percentile-by-state-calculator/ https://dqydj.com/income-percentile-by-state-calculator/
  - deleted 4y ago
    [deleted]
  - WalterGR 4y ago
    > Based off that, you can probably live off investments starting at around the 90th percentile ($61k annual income with 5% withdraw rate), if you live modestly in a low CoL state. I don't understand how that math works. Could you break it down for me?
gedy 4y ago
Don't forget self funded retirement. I'd rather not be "in the market" at all due to the risk, but just saving money has become a pointless exercise.

by yunohn 4y ago

dalyons 4y ago

Exactly, people aren’t always stupid, they’re desperate. Investing in index funds at ~6% average return (or thereabouts) does nothing meaningful for people who are priced out by the 10-15% y/y gains on housing, or are living paycheck to paycheck due to inflation. Its not so hard to see why people feel their only option is riskier bets.

gruez 4y ago
>does nothing meaningful for people who are priced out by the 10-15% y/y gains on housing Housing never had gains that high. Looking at the rise from the last trough (ie. 2009 to today) works out to 5.3% annualized nationwide[1]. Meanwhile the Vanguard Total Stock Market Index Fund returned 12.4% in the same time period. If you look around at a few different metros, there are many cities that return higher (eg. 7.5% for LA[2]), but none are anywhere close to returns for the index fund. The best I found was arizona[3] with 9.1%. [1] https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA [2] https://fred.stlouisfed.org/series/LXXRSA https://fred.stlouisfed.org/series/LXXRSA [3] https://fred.stlouisfed.org/series/PHXRSA https://fred.stlouisfed.org/series/PHXRSA
SturgeonsLaw 4y ago
This is the key that is overlooked a lot. Taking /biz as an example, the sentiment is rife that crypto is their one and only shot to make it out of the hole. Couple that with the "how much do you make" threads that show a lot of them earn somewhere in the $15-$30 per hour range and you can see why these moonshots are (in their view) their only hope. If the most they can scrape together is $5k of capital, then it needs to 10x to provide them with a meaningful change.

jmyeet 4y ago

I agree, which is why everyone who lives off an income rather than assets (which is ~99.5% of us) should be a leftist and support labor organization as that is the only thing that'll actually improve their material conditions. And I mean leftist in the actual sense, not a feckless liberal in the US Democratic Party sense who still ultimately exist to defend the capital-owning class. The so-called Great Resignation and worker shortage was really the first increase in real wages many had seen in 40 years. And what's happened since? Massive inflation, particularly of essentials like housing. That's not an accident. The system is designed such that a budget shortfall is built into your existence. A workforce that is living paycheck-to-paycheck and barely hanging on is a compliant workforce. They're definitely showing up to work and not making trouble. That's the point. Working people of any race, gender, sexual orientation or age have way more in common with each other than they do with the capital-owning class who routinely create wedge issues to avoid any sort of class solidarity. But people don't want to hear that either.

gruez 4y ago
>I agree, which is why everyone who lives off an income rather than assets (which is ~99.5% of us) I think you're greatly underestimating how many people can "live off [...] assets". This page shows household net worth by percentile[1]. Based off that, you can probably live off investments starting at around the 90th percentile ($61k annual income with 5% withdraw rate), if you live modestly in a low CoL state. Once you get around the 95th percentile you can probably live comfortably in a high CoL state ($129k/year, translates to 87th percentile in california), and by the time you get to the 99th percentile, you can probably live as well as dual earner households with high paying careers ($555k). [1] https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/ [2] https://dqydj.com/income-percentile-by-state-calculator/ https://dqydj.com/income-percentile-by-state-calculator/
- deleted 4y ago
  [deleted]
- WalterGR 4y ago
  > Based off that, you can probably live off investments starting at around the 90th percentile ($61k annual income with 5% withdraw rate), if you live modestly in a low CoL state. I don't understand how that math works. Could you break it down for me?

gedy 4y ago

Don't forget self funded retirement. I'd rather not be "in the market" at all due to the risk, but just saving money has become a pointless exercise.