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Why don't rich people do more awesome things?

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Re: Why don't rich people do more awesome things?

#91

Post by Confusion »

nostrademons wrote: post #85
Confusion wrote: post #67

Earlier quoted context omitted.

Well, does 'cash' mean physical cash or does it mean 'not on credit'? You're assuming the latter, but that doesn't make any sense, because buying on credit is effectively buying for more 'cash', just spread over some time (taking net values of later amounts into account of course). So I assume it means the former.

Means "not on credit". And I don't see why that doesn't make sense, because if buying on credit = buying for more 'cash', why would you want to pay more for the car?

You wouldn't and it also wouldn't be considered showoffy, so I don't think that's the intended meaning.

Re: Why don't rich people do more awesome things?

#92

Post by JeffffreyF »

zavulon wrote: post #88
JeffffreyF wrote: post #47

Earlier quoted context omitted.

Make no mistake, you are only judged by your true intentions. People,and life, is imperfect and endlessly flawed, what was intended is really all you have in the end, all that really matters to the truth. Yes, results change circumstances and end pain, but the true measure of a man remains his thoughts. Not his wallet, or his treasures or his effect on his environment. What he is inside is what he would be with the p…

Judged by whom? If you're talking about self-judgement, and judgement by G-d, then I fully agree. But as far as people judging other people - I think only actions and to a lesser degree words should count, because we never truly know other people's intentions.

Judged by reality, by what really is, the truth. It's been called lots of things and names but it is just what is. People can't judge intentions accuratly, thus the incredible confusion over whether it matters. It's a matter of faith I suppose.

Re: Why don't rich people do more awesome things?

#93

Post by anamax »

gnosis wrote: post #89
anamax wrote: post #83

Earlier quoted context omitted.

> In Bob's neighborhood, none of the houses are freshly painted, because it's in nobody's best personal interest to do it, because they don't own the places. None of the yards are weeded or landscaped, the plumbing leaks, and the wiring is hazardous. Bob commits as little of his own resources to his house, because it doesn't belong to him. > But, I question that system. I think, if Bob weren't a rational actor The ab…

Envy driven? It sounds to me like he's driven by altruism and a simple desire to make the place he lives more pleasant. I really don't know where you got envy from.

Reread the exchange. ("The guy above" is not Bob.)

I'm responding to someone who thinks that it's irrational to fix up one's own house when others get significant benefit.

The person who is doing the fixup is doing it because he gets significant benefit, regardless of what other people get. The person criticizing thinks that Bob, who won't do work that benefits others without being compensated, is rational.

That's envy-talk.

Envy is worrying about what other people have/get. Greed is worrying about what you get. A greedy person will do things that benefit himself even if other people benefit without paying. An envious person won't.

Re: Why don't rich people do more awesome things?

#94

Post by thaumaturgy »

anamax wrote: post #93
gnosis wrote: post #89

Earlier quoted context omitted.

Envy driven? It sounds to me like he's driven by altruism and a simple desire to make the place he lives more pleasant. I really don't know where you got envy from.

Reread the exchange. ("The guy above" is not Bob.) I'm responding to someone who thinks that it's irrational to fix up one's own house when others get significant benefit. The person who is doing the fixup is doing it because he gets significant benefit, regardless of what other people get. The person criticizing thinks that Bob, who won't do work that benefits others without being compensated, is rational. That's en…

Just for the record, you got that about as wrong as you possibly could -- to such an extent that I'm scratching my head at your interpretation of what I wrote -- but I can't clarify it any further because I've already made this as clear as I can.

edit: it sounds like you may not be aware that "rational actor" means a specific thing in microeconomics. See also http://en.wikipedia.org/wiki/Rational_choice_theory . Specifically, in order for Bob to qualify as a rational actor, he must act in such a way as to maximize his benefit, where his benefit is defined in objective terms of monetary value. i.e., "I like having flowers in my yard" does not qualify as a benefit, thus a rational actor would not spend money to put flowers in their yard. The entire point of all that was to describe, in as simple of an example as I could construct, why I think that behaving only as rational actors -- i.e., measuring our benefits only in terms of monetary value -- can lead to undesirable outcomes, and why acting irrationally -- again, in the sense of microeconomics -- can lead to better outcomes for all involved.

I can't figure out where I went wrong in stating all that the last time 'round.

Re: Why don't rich people do more awesome things?

#95

Post by Tichy »

thaumaturgy wrote: post #94
anamax wrote: post #93

Earlier quoted context omitted.

Reread the exchange. ("The guy above" is not Bob.) I'm responding to someone who thinks that it's irrational to fix up one's own house when others get significant benefit. The person who is doing the fixup is doing it because he gets significant benefit, regardless of what other people get. The person criticizing thinks that Bob, who won't do work that benefits others without being compensated, is rational. That's en…

Just for the record, you got that about as wrong as you possibly could -- to such an extent that I'm scratching my head at your interpretation of what I wrote -- but I can't clarify it any further because I've already made this as clear as I can. edit: it sounds like you may not be aware that "rational actor" means a specific thing in microeconomics. See also http://en.wikipedia.org/wiki/Rational_choice_theory . Spec…

"Specifically, in order for Bob to qualify as a rational actor, he must act in such a way as to maximize his benefit, where his benefit is defined in objective terms of monetary value. i.e., "I like having flowers in my yard" does not qualify as a benefit"

If that truly is the definition of rational, then sorry, economics is sorely mistaken. Or at least the people who conduct economics that way. I always assumed it was clear that "monetary gain" is simply a placeholder for value gained. Of course "I like having flowers in my yard" does qualify.

Thinking in terms of monetary gain really makes no sense, especially since money doesn't actually have any value. It only has value if you can use money to put flowers in your yard, if you so desire.

I am not an economist but a mathematician by training, so I am not sure what economists are thinking. But they can't (all) be that stupid. Mathematically it is obvious that using such a strict definition of value (monetary gain) is unnecessary and hence should be done away with.

That said, I have problems following the "envy driven vs greed driven" argument.

Re: Why don't rich people do more awesome things?

#96

Post by anamax »

Tichy wrote: post #95
thaumaturgy wrote: post #94

Earlier quoted context omitted.

Just for the record, you got that about as wrong as you possibly could -- to such an extent that I'm scratching my head at your interpretation of what I wrote -- but I can't clarify it any further because I've already made this as clear as I can. edit: it sounds like you may not be aware that "rational actor" means a specific thing in microeconomics. See also http://en.wikipedia.org/wiki/Rational_choice_theory . Spec…

"Specifically, in order for Bob to qualify as a rational actor, he must act in such a way as to maximize his benefit, where his benefit is defined in objective terms of monetary value. i.e., "I like having flowers in my yard" does not qualify as a benefit" If that truly is the definition of rational, then sorry, economics is sorely mistaken. Or at least the people who conduct economics that way. I always assumed it w…

>>"Specifically, in order for Bob to qualify as a rational actor, he must act in such a way as to maximize his benefit, where his benefit is defined in objective terms of monetary value. i.e., "I like having flowers in my yard" does not qualify as a benefit"

> If that truly is the definition of rational, then sorry, economics is sorely mistaken.

You're too kind - if that's the definition of "rational" that economics uses, economics is fundamentally useless.

> That said, I have problems following the "envy driven vs greed driven" argument.

My apologies.

"Greed" is concern with what you have. "Envy" is concern with what other people have.

A greedy person will do something that benefits himself regardless of whether it benefits others. An envious person will not do something that benefits himself if he thinks that other people get too much benefit from that thing.

Re: Why don't rich people do more awesome things?

#97

Post by maigret »

nostrademons wrote: post #87
maigret wrote: post #77

Earlier quoted context omitted.

Because often interests on car credits are lower than the inflation, and maintenance costs on second hand are very hard to foresee.

Interest on car loan is still higher than any investment I can think of with equivalent risk characteristics. 3-year treasuries are currently yielding about 0.75%, 3-year car loans are about 3-4% on a quick Google search. I don't see how you could arbitrage that into a profit. Also, paying off (non-tax-deductible) loans essentially buys you after tax dollars, while investments must be bought with pre tax dollars (tho…

OK. Car-dealers loans (made by the car-marker banks) run usually around 1% where I live. Inflation is currently around 2.5% yty. Also some investments are quite tax-free, but most investment run about 25% taxes here in Germany.

Re: Why don't rich people do more awesome things?

#98

Post by true_religion »

anamax wrote: post #81
true_religion wrote: post #66

Earlier quoted context omitted.

Many companies provide matching funds for retirement accounts, but don't allow you much say in where you invest. You can be given a basket of stocks and told to pick, or told which fund managers you're allowed to use. That aside, individual investors usually like their current funds and are loathe to leave them just for something that promises better results. -- What I envision is a site that simplifies the current t…

> Many companies provide matching funds for retirement accounts, but don't allow you much say in where you invest. You can be given a basket of stocks and told to pick, or told which fund managers you're allowed to use. You do realize that the 2nd sentence isn't necessarily supporting evidence for the first, that the basket and the funds matter. Regardless, the big 401(k) providers already have advice services. (Schw…

What I see is a split in the market.

People who aren't provided financial services by their employer or investment company simply take their financial advice from free or traditional sources. Or they attempt to do stock planning themselves, which is only ideal if you are already knowledgeable about the market and can invest time each day to study it.

The service could bridge the 'knowledge gap', allowing those who want to plan themselves to do so without pitfalls. And since its a system of sensible defaults as their knowledge of the market increases they can tweak the parameters of the program to better suit their needs. In a black box program such as a neural network on the algorithmic side, or a financial planner on the human side, this is impossible.

Re: Why don't rich people do more awesome things?

#99

Post by anamax »

true_religion wrote: post #98
anamax wrote: post #81

Earlier quoted context omitted.

> Many companies provide matching funds for retirement accounts, but don't allow you much say in where you invest. You can be given a basket of stocks and told to pick, or told which fund managers you're allowed to use. You do realize that the 2nd sentence isn't necessarily supporting evidence for the first, that the basket and the funds matter. Regardless, the big 401(k) providers already have advice services. (Schw…

What I see is a split in the market. People who aren't provided financial services by their employer or investment company simply take their financial advice from free or traditional sources. Or they attempt to do stock planning themselves, which is only ideal if you are already knowledgeable about the market and can invest time each day to study it. The service could bridge the 'knowledge gap', allowing those who wa…

> People who aren't provided financial services by their employer or investment company simply take their financial advice from free or traditional sources.

Yes, but since those folks are already ignoring the many for-pay services, what are you going to do differently.

The answer better not be "I'll take their list of choices and produce a plan" because folks at ricedelman.com (among others) have done that for years. (I mention him because he has a nationally syndicated radio show advertising his services. There are many others who don't. How are you going to complete with that?)

You seem focused on how the plan is created. I doubt seriously that that will be enough to make you successful in the 401(k) advice biz.

My free advice is to sell your investment tools as tools instead of saying that you're in the 401(k) advice biz. The tools are independent of 401(k)s.

Which reminds me, you keep saying "stocks". Do you really think that there are many 401(k)s that allow specific stock purchases but don't have employer-paid advisors? I haven't looked at a lot of 401(k)s but in my sample the (few) employers who allow individual stock purchases also have employer-paid advisors. Some of the plans with lots of fund choices (but no "individual stock" option) also have employer-paid advisors.

For the most part, the plans with no employer-paid advisors are the ones with crappy mutual fund choices and no "buy specific stock" option (with the possible exception of the employer's stock). What can you do for them?

Re: Why don't rich people do more awesome things?

#100

Post by Chico »

DilipJ wrote: post #49
jackowayed wrote: post #37

Earlier quoted context omitted.

Yeah, when I saw Paul's post, the first thing I thought was that it would encourage every landlord of a place that a lot of very rich people love to triple the rent and force a rich person to buy it at a favorable price.

investing in restaurants is a great way for a rich guy to become a poor guy. One case of food poisoning and you'll be dealing with lawsuits that will force you under. plus it's not scalable, so it's difficult to make a lot of money, unless the food is so good or unique that you can franchise it. But I'm guessing the appeal of Elan has more to do with the atmosphere than the menu... Anyway, it doesn't matter, the reas…

In the case here you're not really dealing with the restaurants itself, but with the building. You rent your space to the restaurant.
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