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>> Person A was born in 1930. Person B was born seventy years later, in 2000. They both start applying the Graham investing strategy at a very early age, let’s

>> Person A was born in 1930. Person B was born seventy years later, in 2000. They both start applying the Graham investing strategy at a very early age, let’s say when they were 15 years. >> Person A becomes Warren Buffett, once the richest man on earth, who experienced one of the biggest booms in value stocks when he was young. Person B loses half of their money because value stocks are out of favor in the 2010s Buffet started when he was 10, not 15. His net worth is 97.8 billion dollars, 97.5 billion or so of that was earned after he was 50 years old. His success or failure was not due to whether stocks were in or out of favor in his first 5 years of investing. If you want to be extremely rich, set aside the next 82 years of your life to do nothing but work on that, and you should have a pretty high rate of success.

schwartzworld 4y ago
> 97.8 billion dollars, 97.5 billion or so of that was earned after he was 50 years old. To think he started off with a paltry $300 million. How much avocado toast do I need to not eat to get there?
- rufus_foreman 4y ago
  He didn't start off with it. That was after 40 years of investing. By the time he was 21 he was up to $20,000.
  - zehaeva 4y ago
    That's the equivalent of ~$240k in today's dollars!
    - rufus_foreman 4y ago
      >> In 1945, as a high school sophomore, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in three different barber shops across Omaha. They sold the business later in the year for $1,200 That's ~$20k in today's dollars in a few months while still in high school. >> At 15, Warren made more than $175 monthly delivering Washington Post newspapers ~$3k a month in today's dollars.
      - PuppyTailWags 4y ago
        A 15 year old today cannot make ~$3k a month delivering Washington Post newspapers. I think the point still stands what much of wealth gain is lucky opportunity windows, such as being alive during a time where a job like newspaper delivery pays 3k a month.
        wpietri 4y ago
        Yup. When I had a newspaper route in the 1980s, I was getting paid the same per paper delivered as my grandfather was 50 years prior: 2 cents. It reminds me of how people shit on today's college students without realizing how much college costs have risen. I get the initial "kids these days" reaction, but holy moly, fellow olds, please use Google to update your priors a bit.
        dayjaby 4y ago
        I am so lucky to have delivered newspapers in the 2000s for 3ct a piece, in a village. I am sorry that you didn't have this great opportunity.
        Sohcahtoa82 4y ago
        Drives me bonkers. There was a time when you could just work a minimum wage part time over the summer and it would pay for college the rest of the year. Now, you can work minimum wage full time year-round and if you're lucky, you MIGHT cover tuition at a community college if you're still living with your parents and they don't charge rent.
        googlryas 4y ago
        I think you're exaggerating a little bit. It doesn't help whatever point you're trying to make. Average community college tuition cost[0]: $3,400/yr. $3400/yr is $70/week in order to pay your tuition without a loan. Your argument is only lucky people making minimum wage for 40 hours/week, who have their rent paid for, can save $70/week? [0] https://educationdata.org/average-cost-of-community-college https://educationdata.org/average-cost-of-community-college
- spywaregorilla 4y ago
  If you can expel negative avacado toasts from your body and sell them for $17, ignoring sales labor costs, about -18M.
  - darkerside 4y ago
    My man is expelling tons of negativity, shouldn't be a problem
- HeyLaughingBoy 4y ago
  Dammit. I totally forgot that I have an avocado ripening... should be perfect just about now, but ate the last of my brioche for breakfast. I'm seriously not kidding. I've never had avocado toast (was going to make guac) and I'm thinking that brioche avocado toast would be amazing.
  - jedberg 4y ago
    It is pretty good with a nice ripe avocado. Just remember you have to choose between buying a house and eating that toast.
    - HeyLaughingBoy 4y ago
      Maybe the reason I have a house is because I've skipped avocado toast for the last 20 years ;-)
  - deleted 4y ago
    [deleted]
- betwixthewires 4y ago
  "Started off" at 50.
pessimizer 4y ago
> you should have a pretty high rate of success. I'm pretty sure that multiple orders of magnitude more people spent their entire lives trying to become extremely rich than the few hundred it worked out for.
- samatman 4y ago
  There are a great deal more people who think they're trying to become extremely rich, but aren't, than there are people who, for example, think they're trying to become extremely good at violin, but aren't. It's not a retrospective difference, one good way to spot the poseurs: they aren't violently allergic to spending money in a way that doesn't get them more, or at least make that possible. That's table stakes for trying; I don't have the allergy, but I don't fool myself about it either.
  - darkerside 4y ago
    This is a great insight
- darkerside 4y ago
  People acting like WB just YOLOed a few value stocks and sat on his ass for the rest of his life.
bee_rider 4y ago
It is sort of tangential to his point, but the Buffett example seems kind of weird to me. Investing is inherently competitive. Surely the strategy that Buffett (or any other large investor) used to get big would now be obsolete?
- throwaway8582 4y ago
  I agree this was a bad example. Of course people who try and copy the strategy of a very successful person are not going to be as successful themselves, because the people that come later are going to be competing with millions of others doing the same thing. If you want that level of success, you probably have to be ahead of the curve and do something different from what most people are currently doing.
  - bee_rider 4y ago
    Or in fields where we're fighting the universe rather than each other, trying to make progress with your hero's strategy is probably going to be very difficult -- to the extent that there's such a thing as "raw intelligence," Einstein definitely had more of it than I do, so if I was going to look into physics, I'd not want to look at the problems he didn't complete, using his strategy! (of course, this is why fields build up an increasingly advanced framework, after the trailblazers have passed through).
__derek__ 4y ago
Right. I started a comment picking at the Buffett example before seeing yours. Sure, he's been lucky to preserve his mental capacity into old age, but it's not fair to dismiss his persistence. In particular, Berkshire has one of the few mega-cap business models that's actually possible to replicate on a small-scale: start/buy a cash-flowing business, use the earnings to invest in more, repeat. It's easier if you figure out negative cash conversion cycles before everyone else, but that part isn't necessary to apply the model.
johnfn 4y ago
> His net worth is 97.8 billion dollars, 97.5 billion or so of that was earned after he was 50 years old This is quite deceptively phrased. 300M is already more than many of us will earn in a lifetime.
- rufus_foreman 4y ago
  It's not deceptively phrased. You just absolutely refuse to comprehend compound growth. That's on you.
  - johnfn 4y ago
    Your post made phrased as if he did the majority of the work after he was 50. Anyone who sees two numbers that are less than 1% different would initially think the same. If you're making a point about exponential growth, feel free to use exponential notation, or talk in deltas. > You just absolutely refuse to comprehend compound growth. What a bizarre thing to say.
    - rufus_foreman 4y ago
      $100 invested in 1945, what does it amount to today?
simonebrunozzi 4y ago
> set aside the next 82 years of your life to do nothing but work on that, and you should have a pretty high rate of success. Not if you don't have a decent amount of capital to start with. Don't forget that many people, the majority of people, despite their best effort, can't really raise themselves above a certain basic wage and salary, and therefore can't accumulate anything. Without capital, there's no compounding effect of capital, and you're not going to be rich.

schwartzworld 4y ago

> 97.8 billion dollars, 97.5 billion or so of that was earned after he was 50 years old. To think he started off with a paltry $300 million. How much avocado toast do I need to not eat to get there?

rufus_foreman 4y ago
He didn't start off with it. That was after 40 years of investing. By the time he was 21 he was up to $20,000.
- zehaeva 4y ago
  That's the equivalent of ~$240k in today's dollars!
  - rufus_foreman 4y ago
    >> In 1945, as a high school sophomore, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in three different barber shops across Omaha. They sold the business later in the year for $1,200 That's ~$20k in today's dollars in a few months while still in high school. >> At 15, Warren made more than $175 monthly delivering Washington Post newspapers ~$3k a month in today's dollars.
    - PuppyTailWags 4y ago
      A 15 year old today cannot make ~$3k a month delivering Washington Post newspapers. I think the point still stands what much of wealth gain is lucky opportunity windows, such as being alive during a time where a job like newspaper delivery pays 3k a month.
      - wpietri 4y ago
        Yup. When I had a newspaper route in the 1980s, I was getting paid the same per paper delivered as my grandfather was 50 years prior: 2 cents. It reminds me of how people shit on today's college students without realizing how much college costs have risen. I get the initial "kids these days" reaction, but holy moly, fellow olds, please use Google to update your priors a bit.
        dayjaby 4y ago
        I am so lucky to have delivered newspapers in the 2000s for 3ct a piece, in a village. I am sorry that you didn't have this great opportunity.
        Sohcahtoa82 4y ago
        Drives me bonkers. There was a time when you could just work a minimum wage part time over the summer and it would pay for college the rest of the year. Now, you can work minimum wage full time year-round and if you're lucky, you MIGHT cover tuition at a community college if you're still living with your parents and they don't charge rent.
        googlryas 4y ago
        I think you're exaggerating a little bit. It doesn't help whatever point you're trying to make. Average community college tuition cost[0]: $3,400/yr. $3400/yr is $70/week in order to pay your tuition without a loan. Your argument is only lucky people making minimum wage for 40 hours/week, who have their rent paid for, can save $70/week? [0] https://educationdata.org/average-cost-of-community-college https://educationdata.org/average-cost-of-community-college
spywaregorilla 4y ago
If you can expel negative avacado toasts from your body and sell them for $17, ignoring sales labor costs, about -18M.
- darkerside 4y ago
  My man is expelling tons of negativity, shouldn't be a problem
HeyLaughingBoy 4y ago
Dammit. I totally forgot that I have an avocado ripening... should be perfect just about now, but ate the last of my brioche for breakfast. I'm seriously not kidding. I've never had avocado toast (was going to make guac) and I'm thinking that brioche avocado toast would be amazing.
- jedberg 4y ago
  It is pretty good with a nice ripe avocado. Just remember you have to choose between buying a house and eating that toast.
  - HeyLaughingBoy 4y ago
    Maybe the reason I have a house is because I've skipped avocado toast for the last 20 years ;-)
- deleted 4y ago
  [deleted]
betwixthewires 4y ago
"Started off" at 50.

pessimizer 4y ago

> you should have a pretty high rate of success. I'm pretty sure that multiple orders of magnitude more people spent their entire lives trying to become extremely rich than the few hundred it worked out for.

samatman 4y ago
There are a great deal more people who think they're trying to become extremely rich, but aren't, than there are people who, for example, think they're trying to become extremely good at violin, but aren't. It's not a retrospective difference, one good way to spot the poseurs: they aren't violently allergic to spending money in a way that doesn't get them more, or at least make that possible. That's table stakes for trying; I don't have the allergy, but I don't fool myself about it either.
- darkerside 4y ago
  This is a great insight
darkerside 4y ago
People acting like WB just YOLOed a few value stocks and sat on his ass for the rest of his life.

bee_rider 4y ago

It is sort of tangential to his point, but the Buffett example seems kind of weird to me. Investing is inherently competitive. Surely the strategy that Buffett (or any other large investor) used to get big would now be obsolete?

throwaway8582 4y ago
I agree this was a bad example. Of course people who try and copy the strategy of a very successful person are not going to be as successful themselves, because the people that come later are going to be competing with millions of others doing the same thing. If you want that level of success, you probably have to be ahead of the curve and do something different from what most people are currently doing.
- bee_rider 4y ago
  Or in fields where we're fighting the universe rather than each other, trying to make progress with your hero's strategy is probably going to be very difficult -- to the extent that there's such a thing as "raw intelligence," Einstein definitely had more of it than I do, so if I was going to look into physics, I'd not want to look at the problems he didn't complete, using his strategy! (of course, this is why fields build up an increasingly advanced framework, after the trailblazers have passed through).

__derek__ 4y ago

Right. I started a comment picking at the Buffett example before seeing yours. Sure, he's been lucky to preserve his mental capacity into old age, but it's not fair to dismiss his persistence. In particular, Berkshire has one of the few mega-cap business models that's actually possible to replicate on a small-scale: start/buy a cash-flowing business, use the earnings to invest in more, repeat. It's easier if you figure out negative cash conversion cycles before everyone else, but that part isn't necessary to apply the model.

johnfn 4y ago

> His net worth is 97.8 billion dollars, 97.5 billion or so of that was earned after he was 50 years old This is quite deceptively phrased. 300M is already more than many of us will earn in a lifetime.

rufus_foreman 4y ago
It's not deceptively phrased. You just absolutely refuse to comprehend compound growth. That's on you.
- johnfn 4y ago
  Your post made phrased as if he did the majority of the work after he was 50. Anyone who sees two numbers that are less than 1% different would initially think the same. If you're making a point about exponential growth, feel free to use exponential notation, or talk in deltas. > You just absolutely refuse to comprehend compound growth. What a bizarre thing to say.
  - rufus_foreman 4y ago
    $100 invested in 1945, what does it amount to today?

simonebrunozzi 4y ago

> set aside the next 82 years of your life to do nothing but work on that, and you should have a pretty high rate of success. Not if you don't have a decent amount of capital to start with. Don't forget that many people, the majority of people, despite their best effort, can't really raise themselves above a certain basic wage and salary, and therefore can't accumulate anything. Without capital, there's no compounding effect of capital, and you're not going to be rich.