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How to get rich without getting lucky

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Re: How to get rich without getting lucky

#431

Post by Oishikatta »

segmondy wrote: post #298
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…

You can have lots of fun living frugal. Living frugal doesn't mean not having fun. Having fun is really cheap and free if you set your mind. Walking, hiking, bicycle ride, board & card games. Hanging out with friends at home and watching Netflix. Cooking at home and drinking at home. These are fun and cheap, the fun in it depends more so on the crowd. Going out to party can also be fun but this becomes the difference…

You're much more likely to die by buying an old car. You can't just take all advice at face value.

https://www.wired.com/2017/02/watch-terrifyingly-bad-car-saf...

Re: How to get rich without getting lucky

#432

Post by antisthenes »

rubicon33 wrote: post #383
danenania wrote: post #362

In poker, the fastest way to climb the ladder in stakes is to play a tight-aggressive style and be conservative with your bankroll (make sure you have plenty to cover the variance of the stakes you’re playing), but also occasionally take ‘shots’ at higher levels with a small portion of your bankroll. If you run good during your shot, you stay at the higher level. Otherwise, you move back down to rebuild. In short, yo…

This gets broken down and fails against skilled players who are adept at noticing conservative play styles just like this. It's quickly punished by small pots on what should be big wins. The trick isn't just conservative play, but deceptive and difficult to track play with an underlying trend of conservatism.

Playing against skilled players is not how money in poker is made.

If you're playing against 9 other skilled players, money will mostly move around the table, and the only winner will end up being the casino due to rake.

The easiest way to increase profitability in poker is to play against people significantly worse than you are. Not unlike life, where the biggest factor of success is being born in the right country to the right parents.

Re: How to get rich without getting lucky

#433

Post by 0xfeba »

muzz wrote: post #419
0xfeba wrote: post #390

Earlier quoted context omitted.

> Americans in particular tend to buy way more car than they need, and the difference in price is on an order of magnitude that really does matter in the long run for many of us Not only that, they trade it in (sometimes with negative equity) every ~5 years. I buy old, used Lexus'. Pretty much all modern features, quiet, and a fraction of the new price. Change the oil, and the timing belt if applicable, it will last…

5 years is when maintenance and repairs start happening more regularly. Because these are labor intensive, if one lives in an area where labor is expensive, or if the opportunity cost of one's own labor/time is expensive, does this still make sense? Also, there are some really modern features like rear-view cameras, sonar, etc., which are pretty cheap in newer cars but almost impossible to find in older ones

5 years? Not really. Pretty much any Japanese car made in the last 20 years, and domestic in the last 8 should last 10 years; 100/150k before anything major is needed.

But, to run the numbers, get a the total cost of ownership (car payment, interest, and non-warranty or whatever maintenance) for a new/virtually new car, divide it over a span of the expected months of ownership (say, 60, 120, 180 months).

Do the same for a $5,000-$10,000 quality used car that you can pay with cash.

The hard part is estimating repair and maintenance costs, especially for non-car-persons. But I believe that car reliability is so good for recent cars that it's wasteful to purchase new.

eg:

$20,000 new car

36 month loan @ 2% = $28,072.59

Estimated average maintenance/year: $500

TCO 60/120/180: $30.5k/$33k/$35.5

$7,000 used car

Estimated maintenance/year: $1,000

TCO 60/120/180: $12k/$17k/$22k

Now an older car will generally cost more over time, eventually, than a new one. But every 10 years or so it's much cheaper to purchase a used one.

And if your stereo is replaceable you can get a rear-view camera hooked up if you desire. They also have wonky standalone ones.

Re: How to get rich without getting lucky

#434

Post by jandrese »

HeyLaughingBoy wrote: post #380
moate wrote: post #359

Earlier quoted context omitted.

National statistics disagree with you. IDK what your neck of the woods is, but there's millions of people who live in urban areas in which car ownership is completely foreign that bring those averages down. http://www.nationmaster.com/country-info/profiles/United-Sta...

Depends on which statistic you look at, I guess. One line says the US has 765 motor vehicles per 100 people and the next one down says it has 816 motor vehicles per 1,000 people. So which is it?

765 vehicles per 100 people has to be a typo.

816 per 1000 sounds reasonable when you consider how many are childern, live in big cities, are in the military, etc... There are some pretty big classes of people who own no vehicles whatsoever.

If you look at married suburban households the number will almost certainly be over 2. The most common case involves one person driving to work while the other shuffles kids around or has their own job. The public transport option may exist, but is likely inadequate (excessively slow) and undesirable.

Re: How to get rich without getting lucky

#435

Post by magice »

Man, I disagree with about everything from this opinion. And I hate that I have this urge to write out the point-to-point rebuking:

+ "Wealth is having assets that earn while you sleep." : Really? Are we playing the "let's redefine everything so that it works out like I say" game now?

+ "You’re not going to get rich renting out your time." : the top 1% of Americans are dominated with doctors and lawyers who, guess what, rent out their time.

+ "You will get rich by giving society what it wants but does not yet know how to get." : The concept of "first-mover disadvantage" should really solve this. Look, Palm produced a smartphone, and Apple also produces smartphone; Apple make trillions, Palm died. The society clearly want smartphone. Why did Apple succeed but Palm failed?

+ "Specific knowledge is knowledge that you cannot be trained for. If society can train you, it can train someone else, and replace you." : please see above for doctors and lawyers, whom are all trained by the society. Plus, if other humans (i.e. the society) can't train you, who does? God sends angels to you?

+ "Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now." : And if you are interested in, says, building rafts (or horse-drawn carriage, or any of these things), you will get rich so fast that your stomach will starve.

+ "Building specific knowledge will feel like play to you but will look like work to others." : sigh. Right.

+ "The most accountable people have singular, public, and risky brands: Oprah, Trump, Kanye, Elon." : Ummm. One, Trump brand and accountability have adverse relationship. Two, some of the most rewarded people on earth don't do business in their names. Bill Gates used Microsoft, in case you forget. Corporations exist for a reason.

+ "Become the best in the world at what you do. Keep redefining what you do until this is true." : Yes, and the best vendors always win! And Windows is the greatest OS on earth! And Facebook is the best social network! You get my sarcasm.

So, conclusion?

My father taught me this, which I believe to be true: small wealth is by hardwork, great wealth is by Heaven. If you want to be affluent, be industrious at work, be acceptable to society, be prudent in finance; and you will eventually get there. If you want to get richie rich rich, well, pray (plus all of the things for little wealth). This kind of "I get lucky now I will give stupid advices" things really should go away.

Re: How to get rich without getting lucky

#436

Post by jandrese »

s73v3r_ wrote: post #348
sametmax wrote: post #280

Earlier quoted context omitted.

> Can your family live with one car It's really funny to read that. It's probably very american to think 2 cars per family is the norm. I think if I group the 10 adults I see the most on average, we own 2 cars together. And we are all between 30 and 55.

In the vast majority of the US, if you don't have a car, you don't go anywhere.

Vast majority by land area. Per person it isn't so clear cut. Many people live in the city and don't own a car because using a car in the city is somewhat impractical and the public transport options are sufficient.

Re: How to get rich without getting lucky

#437

Post by sizzle »

nostrademons wrote: post #377
sizzle wrote: post #343

Earlier quoted context omitted.

As an investing noob, most of my money is parked in low interest savings accounts. How much of my life savings should I park in index funds? Any smart investing resources/guides you recommend? Thanks for your time.

Rule of thumb: 6 months of living expenses in liquid cash (savings accounts, rotating CD ladder, money-market funds, etc.). Any money that you'll need in the next 5 years in low-risk, non-volatile investments (eg. bonds, T-bills). This usually applies to retirees, but also to folks like entrepreneurs or commission salespeople that have unsteady incomes. Only invest in real-estate, individual stocks, crypto, precious…

Thanks for the info!

Re: How to get rich without getting lucky

#438

Post by nambit »

skookumchuck wrote: post #397
20years wrote: post #309

Earlier quoted context omitted.

Yes, I agree. I am not proposing spending all of your money living it up, but to find a healthy balance. It doesn't have to go in the extreme in either direction.

That's right. For example, an expensive new car isn't much better than a 3 year old used one, and the difference is a big chunk of money to invest. (And also being able to invest money rather than spend it on the interest on car payments.)

This all depends on how much happiness you derive from an expensive new car. My every day commute is my happy time because of that new car that I enjoy driving. YMMV

Re: How to get rich without getting lucky

#439

Post by Joeri »

vinceguidry wrote: post #395
Joeri wrote: post #391

Earlier quoted context omitted.

The trend of working crazy hours to save as much as you can, living overly frugal, etc. will not always lead to happiness or fulfillment. This speaks to a common fallacy: the notion that happiness is a permanent achievement. Many people believe that you work hard so eventually you can achieve a position where you live "happily ever after". That's however not how the brain works. Happiness is a reward mechanism for ef…

This is just silly. The brain's reward mechanism is a dopamine hit. But that's not all there is to happiness.

Maybe I'm explaining it wrong, here's someone who actually understands the science explaining why happiness is not and should not be the default state of the brain: https://youarenotsosmart.com/2018/05/21/yanss-128-the-neuros...

Re: How to get rich without getting lucky

#440

Post by [deleted] »

jandrese wrote: post #436
s73v3r_ wrote: post #348

Earlier quoted context omitted.

In the vast majority of the US, if you don't have a car, you don't go anywhere.

Vast majority by land area. Per person it isn't so clear cut. Many people live in the city and don't own a car because using a car in the city is somewhat impractical and the public transport options are sufficient.

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