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Survivorship Bias

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Re: Survivorship Bias

#171

Post by kamaal »

taneq wrote: post #69
ux-app wrote: post #23

Most people are missing the point a bit here. Survivorship bias doesn't relate to people who worked hard, improved themselves and now earn 1-10MM/yr. There are loads of stories like that. Survivorship bias is "Zuck did X, Y and Z, if I do the same then I'll be a multi-billionaire too!" Following the playbook of those that made it into the top 0.001% is foolish and does not properly account for the large part luck pla…

> There are loads of stories like that. Not compared with the loads of stories of people who worked hard, improved themselves, and still don't earn anywhere near $1M/yr. Otherwise thinking that those successes have some meaningful advice to offer wouldn't be survivorship bias, it'd actually be correct. > Following the playbook of those that made it into the top 0.001% is foolish and does not properly account for the…

>>Not compared with the loads of stories of people who worked hard, improved themselves, and still don't earn anywhere near $1M/yr.

Not earn. I think the point is most people can save up that kind of money until retirement.

Most of these people would have made great sacrifices over the years.

Its not easy to control your urges to purchase and enjoy a million things a capitalistic society tempts you with especially if your peers are doing it all the time.

Basically start early, invest and keep a strong financial discipline. $1M at retirement is doable.

Re: Survivorship Bias

#172

Post by ryandrake »

ux-app wrote: post #166
ryandrake wrote: post #161

Earlier quoted context omitted.

I think you're helping to make my point, so thanks! For every $1mm net worth person who chose a safe boring white collar job, ran a local service business, or saved aggressively over decades, I'll show you ten people who who attempted a safe boring white collar job, tried to run a local service business, or planned to save aggressively over decade, but did not achieve $1mm net worth.

> I'll show you ten people who who attempted a safe boring white collar job, tried to run a local service business, or planned to save aggressively over decade, but did not achieve $1mm net worth For the purpose of this discussion that's irrelevant. As you yourself stated > [Survivorship bias is] about falsely attributing a causal relationship between the people's actions and their success Given that within a 50km ra…

You're talking 1% of Australia's population. But, hey, let's assume that counts as "common." What I'm hearing is "since outcome X is commonly found happening for people, then outcome X must be attributable to some action taken by those people." I'm not sure how you are concluding this.

Cancer is common, too--much more common than becoming a millionaire. Is a cancer diagnosis attributable to someone's actions or is it just chance? Sometimes it is, sometimes it is not.

Re: Survivorship Bias

#173

Post by sqeaky »

crusso wrote: post #102
graphitezepp wrote: post #99

Earlier quoted context omitted.

I certainly agree that your better off throwing your full efforts at well, anything other than lotto tickets, is the better decision but it is extraordinarily unlikely in the example of music that you achieve something resembling a decent career regardless of talent and hardwork. More like you get more popular at parties.

It varies. My uncle had a band and toured the small venue scene in South Louisiana back in the day. My mom was a chorus singer in the New Orleans opera company. Both made varying levels of careers out of their talents and hard work. Both were popular at parties.

The gap between a typical musician and a superstar is much larger than the gap between a programmer and tech company founder with a successful buyout.

It is entirely possible to be a professional musician and not make ends meet, it is entirely easy to be a shitty programmer and comfortably support a family with 3 kids.

Some fields just pay better. Doctors, Lawyers, Construction Managers, Programmers... will be better risks Singers, Painters, Professional Bowlers...

Re: Survivorship Bias

#174

Post by kamaal »

ryandrake wrote: post #161
ux-app wrote: post #158

Earlier quoted context omitted.

> It's about falsely attributing a causal relationship between the people's actions and their success. Yes of course that's the definition of survivorship bias. For the most part that doesn't apply to most rich (>$1mm net worth for argument's sake) people. The vast majority of millionaires achieved their success in a perfectly repeatable fashion. This is self evident. How many people globally are at the Zuckerberg ti…

I think you're helping to make my point, so thanks! For every $1mm net worth person who chose a safe boring white collar job, ran a local service business, or saved aggressively over decades, I'll show you ten people who who attempted a safe boring white collar job, tried to run a local service business, or planned to save aggressively over decade, but did not achieve $1mm net worth.

>>people who who attempted a safe boring white collar job, tried to run a local service business, or planned to save aggressively over decade, but did not achieve $1mm net worth.

In most cases, discounting unexpected health disasters or other such life events that befall a person. Most people's definition of 'savings' is very different. And that leads to very different ends.

But you will be hard pressed to find people who did the right stuff over the years and didn't come out better.

Frugality is pretty much a gradient and not a flat plain recipe. Based on how far you can squeeze and invest, that much mileage comes out. Everybody is different, based on how much you can endure YMMV.

Re: Survivorship Bias

#175

Post by sqeaky »

pg314 wrote: post #66
ux-app wrote: post #23

Most people are missing the point a bit here. Survivorship bias doesn't relate to people who worked hard, improved themselves and now earn 1-10MM/yr. There are loads of stories like that. Survivorship bias is "Zuck did X, Y and Z, if I do the same then I'll be a multi-billionaire too!" Following the playbook of those that made it into the top 0.001% is foolish and does not properly account for the large part luck pla…

> There's no survivorship bias in going to med school, becoming a specialist and then earning 400k/yr. There is, just not as pronounced as in the lottery example. You ignore all the students who failed or dropped out of med school, didn't make the cut to become a specialist, or had to take a job that didn't make 400k/yr.

There are also ways out of med school that are less than critical failures. Did someone who failed to become a doctor but became a Nurse fail? Pick a path with many options allows one to be flexible in the future.

Re: Survivorship Bias

#176

Post by 989throwaway66 »

Noseshine wrote: post #116
989throwaway66 wrote: post #96

Earlier quoted context omitted.

Not sharing on a very public platform with so many readers, by fear that, even if 99.99% will yawn, someone will decide to try to compete with me... Living small, discreetly, living happy.

That is the trouble with you guys: You propose ideas that work - but only as long as only very few people do it. Thank you for demonstrating it so clearly - by the way, did you yourself even notice this catch? It may work for anyone , but not for everyone . I love that in English those words sound so similar. I might be tempted to consider that's part of the problem (as part of the larger "how does language influence…

You are right: not everyone can do the same thing, some ideas are limited. But usually, those are the Jobs, Gates, Zuck's type of ideas. There are many more ideas beyond those. Especially those that don't scale, because many don't want to do them.

But if you decide to start a plumbing company in the US, and if you have the brains, put the hard work, talent and discipline to run it very very well even just in a local area, I would not be surprised that you can reasonably become a millionaire over time. Because it's always hard to find a good plumber and electrician. But many people yawn at plumbing, and you'll never be a billionaire. And it will take more than 3 years, and it won't be flip and repeat.

Re: Survivorship Bias

#177

Post by didibus »

ux-app wrote: post #23

Most people are missing the point a bit here. Survivorship bias doesn't relate to people who worked hard, improved themselves and now earn 1-10MM/yr. There are loads of stories like that. Survivorship bias is "Zuck did X, Y and Z, if I do the same then I'll be a multi-billionaire too!" Following the playbook of those that made it into the top 0.001% is foolish and does not properly account for the large part luck pla…

There might be though. There's more to luck then we may think. If the world is truly deterministic, it could be that luck is 100% of it. I can see genetics, parenting, the teachers you had, and a whole of other things playing into even the success of just becoming a doctor.

In my case, I'm just lucky that the art I love to make, code, is also a highly paid job. Nothing felt hard to get here, I did it because of the passion I have for it, and I have this passion out of luck.

Re: Survivorship Bias

#178

Post by TheCoelacanth »

ux-app wrote: post #72
taneq wrote: post #69

Earlier quoted context omitted.

> There are loads of stories like that. Not compared with the loads of stories of people who worked hard, improved themselves, and still don't earn anywhere near $1M/yr. Otherwise thinking that those successes have some meaningful advice to offer wouldn't be survivorship bias, it'd actually be correct. > Following the playbook of those that made it into the top 0.001% is foolish and does not properly account for the…

>Not compared with the loads of stories of people who worked hard, improved themselves, and still don't earn anywhere near $1M/yr The vast majority of single digit millionaires are doctors, lawyers, construction company owners. I've even personally met a factory worker who retired with > $1mm in savings due to prudent money management (no lottery wins, just basic financial management for 30+ years). I live in a compl…

$5mm net worth is considerably easier than the $1-$10mm/year that was quoted. That's achievable with income of several hundred thousand a year, which is orders of magnitude more common than making several million per year.

Re: Survivorship Bias

#179

Post by 989throwaway66 »

hellogoodbyeeee wrote: post #100
989throwaway66 wrote: post #65

Earlier quoted context omitted.

I am a small business owner, doing unpleasant work. My business has been doing well, exactly because it is unpleasant: a lot of people want to outsource what I do, even if it is a bit expensive. I also have found that many people are OK to do some jobs for me that I find really really unpleasant. You need to find the right person for the right "unpleasant" though. This is the beauty of capitalism. And I am now a mill…

>Even if I find it quite darn interesting. Did you find it interesting to begin with? Or did you just think the sector would be a good investment and then later, after you were successful, it became interesting?

It was a very good fit with my skills. And I really had wanted to start something for a long time, and did not find anything. Not passionate about the sector at all. Still not.

But after working on this for many many years, improving little things here and there, then a few bigger things, it became more and more interesting, with a sense of pride that comes with competence and achievement, regardless of the sector.

Re: Survivorship Bias

#180

Post by Nomentatus »

Noseshine wrote: post #116
989throwaway66 wrote: post #96

Earlier quoted context omitted.

Not sharing on a very public platform with so many readers, by fear that, even if 99.99% will yawn, someone will decide to try to compete with me... Living small, discreetly, living happy.

That is the trouble with you guys: You propose ideas that work - but only as long as only very few people do it. Thank you for demonstrating it so clearly - by the way, did you yourself even notice this catch? It may work for anyone , but not for everyone . I love that in English those words sound so similar. I might be tempted to consider that's part of the problem (as part of the larger "how does language influence…

It's a template, lots of businesses fit it pretty well. He isn't inviting competition to his corner of the garden, you'll have to find your own. This won't work for self-indulgent humans, very true - so it won't work for everyone.
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