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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
by 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 agoThis 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.