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How to get rich without getting lucky

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Re: How to get rich without getting lucky

#311

Post by hfdgiutdryg »

gascan wrote: post #269
falcolas wrote: post #187

Earlier quoted context omitted.

Counterpoint: Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. Investing works mostly because of the current trend of artificially propping up the stock market. Any failure in your investment strategy leave you in the same boat as the current boomer retirees who are trying to get back in the workforce. Not to mention, your life is going to be pretty miserable if you're wor…

spending a lot of effort on living frugal. There's just something off-putting about the thought of spending decades living frugally There's a whole range there. You don't have to live on ramen. But you can be really aggressive about insurance premiums, utility bills, etc. You can learn home & auto repair & maintenance. You can make major life structure choices (Can your family live with one car?). These all can make…

You can learn car & auto repair & maintenance.

As someone who knows a lot about car and motorcycle maintenance, repair, and modification, this is not good advice, and I see it all over.

You're far better off simply buying a new, cheap compact and taking it to Walmart for oil changes. You will come out far ahead of the person who invests money in tools and space, and time into learning how to do something that is so easily outsourced.

The opportunity cost of maintenance is high. Don't get involved unless it's going to be a hobby that brings you satisfaction in and of itself.

Sure, learn some very basics so you don't get blatantly ripped off by unscrupulous shops (bringing you a filthy air filter that doesn't even fit your car is one example), but don't invest much time or energy.

Re: How to get rich without getting lucky

#312

Post by s-shellfish »

thanatropism wrote: post #290
s-shellfish wrote: post #243

Earlier quoted context omitted.

I think when people describe 'the ideal way to live financially' they are looking at the problem as though they have to solve it all in one go, all at once. That's overwhelming, often leads to a sort of, yo-yo pattern of extreme frugality and extreme luxury. Frugal living are habits that accumulate gradually, as are any other habits one aims to develop. Eventually you don't have to think about them, things converge n…

Is that yo-yo pattern bad? Periods that are more frugal help you appreciate the pleasures of higher-end lifestyles while realizing that not having them isn't a catastrophe. Plus the hedonic treadmill is a bitch. Someone earlier in this thread regretted his parents not having experienced certain things. Truly, it's a crying shame to die without having had truly fancy delicious dinners, for example -- that one time is…

I think it's only bad when you don't feel like you have any control over it, and you feel more like it controls you. There's the long term goal you want, but the lack of having control leads to extremes, all of these things increase the number of variable you feel compelled to reason about, to control. With finances, food, 'stuff', that can lead to overload, stress, hence, oscillating between opposites, lacking self control, self direction, autonomy, etc. These are all things people need to feel secure and stable when they have to operate as mostly independent entities.

Re: How to get rich without getting lucky

#313

Post by mixmastamyk »

shams93 wrote: post #229
thisisit wrote: post #208

I really doubt you can get rich by not being lucky. I was like Naval and thought many of my achievements were due to sheer hard work. And then I read this article about luck: http://nautil.us/blog/-the-key-to-good-luck-is-an-open-mind And I got the book mentioned in the article - The Luck Factor by Richard Wiseman. One of the exercises in the book is to think over how things have unfolded in your life - what would ha…

We have all these ideals about hard work but in reality the economy is largely a casino. With crippling student debt most young people have been hamstrung from the gate. Milleneals don't generate wealth like boomers because most milleneals were effectively born into indentured servitude with the exploitation over education. Sure you could try to go without a degree in 2017 but good luck getting your foot in the door…

    - Student debt
    - Healthcare 
    - Housing
    - ?

Re: How to get rich without getting lucky

#314

Post by falcolas »

jogjayr wrote: post #238
falcolas wrote: post #193

Earlier quoted context omitted.

Keep in mind MMM started with a sizable inheritance to kickstart his nest egg and currently works full time talking about living frugally. Take from that what you will.

> Keep in mind MMM started with a sizable inheritance to kickstart his nest egg Please provide proof of this. He's never mentioned it anywhere on his blog. > currently works full time talking about living frugally. This he has talked about: http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-... The tl;dr for others is basically, what's someone who is hardworking and driven enough to retire at age 31 actually…

I messed up on the inheritance; it was a house leftover from the house building business and used for rent and a sale later.

Their own yearly reports put the second part to a lie - they would have to cut back significantly on their spending if they lost this income. It's possible for them to do without going homeless, but it would be non-trivial.

His last reported year, his base costs (food, clothing, electricity, etc) were $30,000 - within the range. But as he himself notes right below that total, they spent around $90,000 on health insurance and a vehicle, which he pretends doesn't belong in the previous category because "the job pays for it".

Not holding that job suddenly puts him on the hook for that $90,000, or puts him at risk of not having health insurance and reliable transportation.

Re: How to get rich without getting lucky

#315

Post by refurb »

wilsonnb wrote: post #182
siberianbear wrote: post #97

I got rich in Silicon Valley from my equity compensation. I bounced around various companies and startups. Two of them were successful and had public offerings. Of those two, one was spectacularly successful. Sure, luck played a role. But my pure grit and tenacity also played a role. Taking on hard bugs and solving them played a role: I solved a lot of hard bugs that others couldn't solve. Spending Saturday afternoon…

> Having some talent at hiring and managing people helped. Luck. > Spending my teenage years writing clever little programs in 6502 assembly language on my Commodore 64 instead of smoking weed and partying helped. Lucky enough to grow up with access to a computer in a time when that wasn't common. > Having a strong knack for math and computer science helped. Luck again.

You argument is not a worthwhile one.

No matter the example, you could always narrow it down to "luck".

"Lucky you didn't get run over by a car"

"Lucky you didn't get cancer and die"

"Lucky WW3 didn't start and destroy your country"

What's the point?

Re: How to get rich without getting lucky

#316

Post by spking »

thanatropism wrote: post #292
bootsz wrote: post #227

Earlier quoted context omitted.

> Not to mention, your life is going to be pretty miserable if you're working two jobs and spending a lot of effort on living frugal. Agreed. A few follow-up points: 1. Frugality isn't a binary state. There's a balance to be struck. Some people really do waste money on frivolous things that don't actually bring them much real satisfaction, and in that sense being more frugal is definitely worth it. But once you've el…

I just said this elsewhere on this thread, but I'll make it shorter: the hedonic treadmill is a bitch. If you're having $4 lattes once a week, they're worthless. If you have a $100 dinner twice a year... man, those are nice.

Recently my wife and I were discussing one of the big benefits of rural living being far less easy access to impulse $4 lattes, In-N-Out drive thrus and the like. A trip to a major suburb becomes a planned event (and more meaningful), just like those $100 steak dinners.

Re: How to get rich without getting lucky

#317

Post by hfdgiutdryg »

petra wrote: post #295
falcolas wrote: post #244

Earlier quoted context omitted.

I found it on his own blog, though it's almost impossible to locate now. Basically he inherited a family house, lived in it for a few years, and sold it for a large sum of money (in addition to holding a $100,000 + a year job and saving from it). As for the paid advocacy, have a look at their financials. You'll see a non-trivial amount of income from advertising on the website and speaking. EDIT: The house wasn't inh…

>> You'll see a non-trivial amount of income from advertising on the website and speaking Fuck the modern web. Such a bunch of crap. Someone needs to build a search engine for sites that don't carry any form of advertisement. charge subscription. seems worthy.

Micropayments were going to be the wave of the future back around 2000. It never happened. People want intangible stuff for what they perceive as free.

Re: How to get rich without getting lucky

#318

Post by refurb »

simantel wrote: post #301
icedchai wrote: post #286

Earlier quoted context omitted.

Are you saying everything is luck? come on... My dad taught me about investing when I was a teenager. I actually applied this for the next 20+ years. Was this luck ?

Yes. You were lucky to be born into a family with money to invest and to grow up with a father around. Not everyone has those advantages.

Not everyone has those advantages, but many people do and never get rich.

That would suggest it's much more than just luck.

Re: How to get rich without getting lucky

#320

Post by mbesto »

notheguyouthink wrote: post #197
sokoloff wrote: post #39

Earlier quoted context omitted.

If you have money to invest, invest in low-cost, broad-based index funds. I personally bias slightly towards small cap (said more precisely: I avoid biasing toward large-cap, but to many people, that looks like biasing towards small caps). One specific choice is VTSAX from Vanguard, but there are many others. Keep an emergency fund of 2-4 months in cash or equivalents, and invest everything else that you can when you…

Any thoughts on strategy's for not "if your young" people? My wife and I (early 30s) have been getting her school debt settled but with little retirement outside of a small 401k, we've started looking at aggressive retirement plans. At the moment we're just treating everything as the most yield (compounded or not). So her high interest debt is the most yield, however once half of those are out, a lot of investments w…

Early 30's guy here.

First, no matter what you do, construct an asset mix (even if it's wrong) to start, then do research on what is most appropriate for you, stick to it, and just keep investing to each of those buckets.

I think I sit generally along the lines of:

- 60% real estate property - 10% retirement investments (401k, IRA, etc) - 10% Vanguard Index funds (diversified across 5 indices, large cap, SP500, small cap, REIT, etc) - 5% direct stock investments (moderate risk, high reward) - 8% high risk, high reward investments (e.g. seed investments) - ~2% cash (mix of checking account and HYS account @ 1.7% APY)

- 20% of my overall portfolio is basically liquid in case of an emergency

NOTE - do not strictly follow this asset mix, it's just illustrative based on what my wife and I have decided to do.

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