A Fixed Income Is a Sucker Bet(stevepavlina.com)
stevepavlina.com
A Fixed Income Is a Sucker Bet
http://www.stevepavlina.com/blog/2009/09/a-fixed-income-is-a-sucker-bet/
36 コメント
the upside to the variable income lifestyle is a relatively small proportion of people living the glamorous lifestyle that Pavlina is selling but the downside is the much larger number of people who are barely scraping by making ends meet on the same system
While this is true, I don't think the assumption that most of the people who end up on top somehow deserve their success and those on the bottom deserve their failures is correct. More to the point, a moral system built on this is is cruel, damaging to one's psyche, and a bad way to motivate people to create things. Alain De Botton gives a very eloquent TED talk about this [1], which is much more interesting than this Black Swan pep talk bullshit.
The reality is: in any given attempt at a complicated problem (like most jobs/startups), most failures and successes are for reasons outside of one's control. The world is simply much more complicated than our minds can comprehend. What we can control is how many ways we attempt difficult problems, and this precisely why perseverance plays a much bigger role than intelligence in startup success [2]: because individuals that appear as extraordinarily intelligent don't really understand the world that significantly better than someone of average intelligence. There's a point past which linguistic dialects and the ideas prevalent in one's social circle affect perceived IQ much more than the quality of one's world model. But persistence and effort, on the other hand, scales linearly - if you can iterate over 10 ideas instead of 1, you're 10 times as likely to succeed, no matter what your intelligence.
1. http://www.youtube.com/watch?v=MtSE4rglxbY
2. http://www.paulgraham.com/determination.html
While this is true, I don't think the assumption that most of the people who end up on top somehow deserve their success and those on the bottom deserve their failures is correct. More to the point, a moral system built on this is is cruel, damaging to one's psyche, and a bad way to motivate people to create things. Alain De Botton gives a very eloquent TED talk about this [1], which is much more interesting than this Black Swan pep talk bullshit.
The reality is: in any given attempt at a complicated problem (like most jobs/startups), most failures and successes are for reasons outside of one's control. The world is simply much more complicated than our minds can comprehend. What we can control is how many ways we attempt difficult problems, and this precisely why perseverance plays a much bigger role than intelligence in startup success [2]: because individuals that appear as extraordinarily intelligent don't really understand the world that significantly better than someone of average intelligence. There's a point past which linguistic dialects and the ideas prevalent in one's social circle affect perceived IQ much more than the quality of one's world model. But persistence and effort, on the other hand, scales linearly - if you can iterate over 10 ideas instead of 1, you're 10 times as likely to succeed, no matter what your intelligence.
1. http://www.youtube.com/watch?v=MtSE4rglxbY
2. http://www.paulgraham.com/determination.html
which is much more interesting than this Black Swan pep talk bullshit.
Have you read The Black Swan? It's not a pep talk. It's all about how much of what affects us is out of our control. I suppose one could mope about this, but what Taleb says is to do things that will reward you if the unpredictable happens.
Persistence and effort, on the other hand, scales linearly - if you can iterate over 10 ideas instead of 1, you're 10 times as likely to succeed, no matter what your intelligence.
Incorrect. If you can generate one more idea than anyone else, you may be worth many times what they're worth--because to someone who desperately needs an idea, they're going to pay a huge premium to get the best person for the job. If you're buying market data in order to make high-frequency trades, the company that gets you information 1% faster isn't worth 1% more. It's worth almost infinitely more, since being the second person in the trade doesn't get you any profit.
Have you read The Black Swan? It's not a pep talk. It's all about how much of what affects us is out of our control. I suppose one could mope about this, but what Taleb says is to do things that will reward you if the unpredictable happens.
Persistence and effort, on the other hand, scales linearly - if you can iterate over 10 ideas instead of 1, you're 10 times as likely to succeed, no matter what your intelligence.
Incorrect. If you can generate one more idea than anyone else, you may be worth many times what they're worth--because to someone who desperately needs an idea, they're going to pay a huge premium to get the best person for the job. If you're buying market data in order to make high-frequency trades, the company that gets you information 1% faster isn't worth 1% more. It's worth almost infinitely more, since being the second person in the trade doesn't get you any profit.
Have you read The Black Swan? It's not a pep talk.
No, but I've read the wikipedia article, and absolutely despised the tone of this article. That said, calling it "pep talk bullshit" was an emotional response - it's been a long day. What I mean to say is that Taleb is giving bad advice with a lot of confidence and bad "proofs" based on idiotically simple models. For example:
Taleb says is to do things that will reward you if the unpredictable happens
That sentence seems to either (a) have a huge gap of basic probability, or (b) contradict itself.
First, if "unpredictable" is to mean "low probability of happening", there are several orders of magnitude more "unpredictable" things than "predictable" ones (and that's why they have such a low probability of happening).
A better model of "events" and "probability" would consider the key variable correlating to probability of events is specificity - it's highly probable that some planes will crash in the next 10 years. That relatively general event can be partitioned into less probable (but more specific) events. There are more specific events than general events, and each is less probable in proportion to its specificity. If you could know which unpredictable thing were going to happen, they wouldn't be unpredictable anymore.
Of course, reality is stranger yet - events aren't all neat subsets and partitions of each other like they are in that model, and predictable varies with probable based on some measure of the accuracy of the world model of the predictor (which, I would argue, is usually pretty bad). Hence, I would argue that predictability doesn't matter much at all (after some point) - evolution and the ability to let go of one seemingly great ideas matters more.
No, but I've read the wikipedia article, and absolutely despised the tone of this article. That said, calling it "pep talk bullshit" was an emotional response - it's been a long day. What I mean to say is that Taleb is giving bad advice with a lot of confidence and bad "proofs" based on idiotically simple models. For example:
Taleb says is to do things that will reward you if the unpredictable happens
That sentence seems to either (a) have a huge gap of basic probability, or (b) contradict itself.
First, if "unpredictable" is to mean "low probability of happening", there are several orders of magnitude more "unpredictable" things than "predictable" ones (and that's why they have such a low probability of happening).
A better model of "events" and "probability" would consider the key variable correlating to probability of events is specificity - it's highly probable that some planes will crash in the next 10 years. That relatively general event can be partitioned into less probable (but more specific) events. There are more specific events than general events, and each is less probable in proportion to its specificity. If you could know which unpredictable thing were going to happen, they wouldn't be unpredictable anymore.
Of course, reality is stranger yet - events aren't all neat subsets and partitions of each other like they are in that model, and predictable varies with probable based on some measure of the accuracy of the world model of the predictor (which, I would argue, is usually pretty bad). Hence, I would argue that predictability doesn't matter much at all (after some point) - evolution and the ability to let go of one seemingly great ideas matters more.
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> how much of a loser we actually are.
And if that happens, then you go back to fixed income and live happily ever after. At least you're not left with the unknown.
And if that happens, then you go back to fixed income and live happily ever after. At least you're not left with the unknown.
Sounds like a guy selling some kind of pyramid scheme.
Oh wait, he is a motivational speaker, one level above the "get rich quick" folks.
I found his post to be almost insulting (I'm rich, I'm making plenty of money and you are an idiot for not listening to me).
Oh wait, he is a motivational speaker, one level above the "get rich quick" folks.
I found his post to be almost insulting (I'm rich, I'm making plenty of money and you are an idiot for not listening to me).
(I'm rich, I'm making plenty of money and you are an idiot for not listening to me)
So, like a pg essay?
Don't get me wrong, I think pg offers great advice after all. I do find it ironic though that there are several "defenders of the religion" here on YC that don't seem to see the similarities between the messages that pg conveys and every other self-help guru out there. (Yes, boiled down, Paul Graham is basically a self help guru.)
pg speaks to hackers, Pavlina, Orman, Godin, 37signals and others speak to people of different persuasion. Each is not selling snake oil, rather the lessons learned from a particularly successful experience. You can discount them or choose to learn more at your leisure.
There's nothing wrong with that, and suggesting he's somehow unethical, or otherwise insulting him because his methods are not particularly of your persuasion is like a Christian berating a Muslim for worshipping the wrong god.
So, like a pg essay?
Don't get me wrong, I think pg offers great advice after all. I do find it ironic though that there are several "defenders of the religion" here on YC that don't seem to see the similarities between the messages that pg conveys and every other self-help guru out there. (Yes, boiled down, Paul Graham is basically a self help guru.)
pg speaks to hackers, Pavlina, Orman, Godin, 37signals and others speak to people of different persuasion. Each is not selling snake oil, rather the lessons learned from a particularly successful experience. You can discount them or choose to learn more at your leisure.
There's nothing wrong with that, and suggesting he's somehow unethical, or otherwise insulting him because his methods are not particularly of your persuasion is like a Christian berating a Muslim for worshipping the wrong god.
In the last decade or so there's been a boom in pop-science self-help for yuppies, put out by a new crop of public intellectuals, like: Malcolm Gladwell, Jared Diamond, Chris Anderson, nearly all non-fiction in the New Yorker, the majority of TED speakers, etc.
And?
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Yeah, the guy sounds like a huckster for sure.
And much of his logic is flawed:
"If expenses rise unexpectedly and surpass your monthly income, then you have no choice but to draw money from cash reserves or investments or go into debt. If your expenses later return to normal, this debt may be temporary, but you’ll still end up paying extra interest or losing interest on your depleted savings/investments, which takes money out of your pocket."
The same thing could happen if you earn a variable income: what if you had some large, unexpected expense and also had a bad month for income? Same result, maybe even worse.
The only solution is to live consistently below your means and save up a good-sized emergency fund - that advice works whether you make a "fixed income" or not.
And much of his logic is flawed:
"If expenses rise unexpectedly and surpass your monthly income, then you have no choice but to draw money from cash reserves or investments or go into debt. If your expenses later return to normal, this debt may be temporary, but you’ll still end up paying extra interest or losing interest on your depleted savings/investments, which takes money out of your pocket."
The same thing could happen if you earn a variable income: what if you had some large, unexpected expense and also had a bad month for income? Same result, maybe even worse.
The only solution is to live consistently below your means and save up a good-sized emergency fund - that advice works whether you make a "fixed income" or not.
You do realise the guy is / was a coder right?
He used to write shareware games / but then turned to doing the self-help stuff. Agreed that the article was pretty poor, but the guy is/was a bit above the 'get rich quick' folks
He used to write shareware games / but then turned to doing the self-help stuff. Agreed that the article was pretty poor, but the guy is/was a bit above the 'get rich quick' folks
From the essay: On the other hand, maybe you want to inspire and motivate people for a living. This takes a lot more skill than delivering pizzas, but it’s in much higher demand relative to the supply.
Gosh, if I decided I wanted to inspire and motivate people for a living, who would I consult for advice on how to do it?...
Gosh, if I decided I wanted to inspire and motivate people for a living, who would I consult for advice on how to do it?...
If you hit ctrl+f and replace "fixed" with "low" and "variable" with "high", then and only then does this article make any sense at all.
He points out that people on fixed incomes are screwed when things go wrong and expenses mount. Apparently in his mind, people with variable incomes (which I've had my entire adult life, btw) can just make more when they really need it or something.
In fairness the first half of the article was so dumb that I had to stop, so maybe it redeemed itself after.
He points out that people on fixed incomes are screwed when things go wrong and expenses mount. Apparently in his mind, people with variable incomes (which I've had my entire adult life, btw) can just make more when they really need it or something.
In fairness the first half of the article was so dumb that I had to stop, so maybe it redeemed itself after.
I read the whole thing. It didn't redeem itself.
Exactly. The whole first half was sand-poundingly stupid. Finally I got to a heading I agreed with, though: Stop fussing over expenses and taxes. I think many smart people don't value their time enough. My personal experience has been that I'm better off being creative and productive rather than defensive.
The problem with the second half is the guy spends pages and pages sucking his own cock about how successful and how much "value" he is creating. I have a news flash for him: just because you can convince some dejected and directionless individual to pay you for something does not mean you are delivering value.
There's another huge hole in his thinking which is that he assumes living on a budget is nothing but pain, and making tons of money is nothing but joy. However this is only true if you're a workaholic with expensive tastes.
However most people are better rewarded by doing something they love and having good personal and family relationships. A relentless focus on earning money is going to detract from pursuing those more important things. That's not to say that one shouldn't be enterprising, but money beyond a reasonable threshold doesn't really make most people any happier.
However most people are better rewarded by doing something they love and having good personal and family relationships. A relentless focus on earning money is going to detract from pursuing those more important things. That's not to say that one shouldn't be enterprising, but money beyond a reasonable threshold doesn't really make most people any happier.
Working for someone else is not scalable.
"Trading time for money"
My creative/artist friends amaze me because they have mastered the art of income diversification (freelancing, multiple P/T jobs, selling stuff on CL, babysitting). While not in the realm of Pavlina's success, they seem to be unafraid of the two things most white-collar professionals may be most afraid of: 1) being laid-off or fired and 2) quitting your job (because they have done so many gigs). Yes, they squeak by but they get by.
"Trading time for money"
My creative/artist friends amaze me because they have mastered the art of income diversification (freelancing, multiple P/T jobs, selling stuff on CL, babysitting). While not in the realm of Pavlina's success, they seem to be unafraid of the two things most white-collar professionals may be most afraid of: 1) being laid-off or fired and 2) quitting your job (because they have done so many gigs). Yes, they squeak by but they get by.
As a freelance designer myself, I can see exactly what you mean @wallflower. One of the up sides of all the economic woes of late is that it's helped me build a resistance to the normal fears that creep in, ie. being laid off or fired. Lose a few clients and you'll quickly learn how adept you are at filling the gaps. Trading time for money is just working for someone elses dream.
Freelancing is still trading time for money. Just a diverse set of sources of that money, but its still not scalable.
You could build parts of your income via selling advertisements on content site, and then suplement the rest with freelancing.
I was able to bootstrap my game development website that way. $70 from ads revenue and $50 from a freelance work.
However, a site that generate passive income from advertisement still require maintenance work to grow (and maybe to keep). Even so, it does make money while you sleep, eat, and work.
I was able to bootstrap my game development website that way. $70 from ads revenue and $50 from a freelance work.
However, a site that generate passive income from advertisement still require maintenance work to grow (and maybe to keep). Even so, it does make money while you sleep, eat, and work.
Shouldn't it rather be wallflower@ ?
Except they probably work every waking hour. There's no reason (especially if you're creative/artist) that you can't get the security of a 40 hour a week job and be creative the rest of the time.
In my experience, having a regular 40-hour-a-week job really destroys my creativity. There's more to being creative than just having some time to spend on creative projects; after doing lots of monotonous things for someone else I used to find myself completely unmotivated to do anything. I think this relates to the feeling among creative types that some business management types don't understand that creativity isn't measured in hours.
To tie it into YC, think of the manager's schedule vs. the maker's schedule. A few hours a day after working eight hours for someone else isn't really enough time to get into creative mode.
To tie it into YC, think of the manager's schedule vs. the maker's schedule. A few hours a day after working eight hours for someone else isn't really enough time to get into creative mode.
Some notable counterexamples - Wallace Stevens (http://en.wikipedia.org/wiki/Wallace_Stevens) and Albert Einstein's time in the swiss patent office. Creativity is often defined by constraints, like lack of time.
Though my experience tends to agree with yours.
Though my experience tends to agree with yours.
This isn't advice for everyone - not that the author said it was, of course. But it probably makes sense for the top percentiles.
We say the best programmers are 10x better than the worst, right? But they don't get paid 10x as much. If you're in the 10x ability club (or you think you are) you should be looking for ways to get paid on how productive you are, not on how many hours you put in. You can't change the number of hours in the day, but you can always find ways to boost your productivity.
If you can set up ten web sites in the time it takes someone else to set up one, you need to start getting paid per site, not per hour. When you get paid per hour, every increase in productivity goes into your boss' pocket. When you get paid per project or per work unit, productivity gains go into your pocket.
We say the best programmers are 10x better than the worst, right? But they don't get paid 10x as much. If you're in the 10x ability club (or you think you are) you should be looking for ways to get paid on how productive you are, not on how many hours you put in. You can't change the number of hours in the day, but you can always find ways to boost your productivity.
If you can set up ten web sites in the time it takes someone else to set up one, you need to start getting paid per site, not per hour. When you get paid per hour, every increase in productivity goes into your boss' pocket. When you get paid per project or per work unit, productivity gains go into your pocket.
This guy neglects things like... car insurance (which is required in some states), health insurance among other things.
His advice is in the right direction, but fairly blind - telling everyone to jump off the cart, right now.
His advice is in the right direction, but fairly blind - telling everyone to jump off the cart, right now.
Yet people with a scarcity mindset spend a lot more time nitpicking their expenses and taxes than they invest in boosting their income. Not a good trade off... not by a long shot.
Bullshit. Acquiring more money by requiring less is infinitely easier than convincing people to pay you more, be it an employer or a customer. There's a ceiling to this, as everyone needs a roof over their heads, food to eat, and something interesting to do in their spare time, but this statement is bogus.
Bullshit. Acquiring more money by requiring less is infinitely easier than convincing people to pay you more, be it an employer or a customer. There's a ceiling to this, as everyone needs a roof over their heads, food to eat, and something interesting to do in their spare time, but this statement is bogus.
You could work more hours instead.
Most of the time, when you reduce expenses, if you check how much you are "making" per hour, it's less that what you could get from working.
Obviously you could just not buy stuff, but I'm (and probably him too) talking about things like going to a farther store that has cheaper prices. You need to balance how long it takes you to get there, vs how much you will reduce your expenses.
Most of the time, when you reduce expenses, if you check how much you are "making" per hour, it's less that what you could get from working.
Obviously you could just not buy stuff, but I'm (and probably him too) talking about things like going to a farther store that has cheaper prices. You need to balance how long it takes you to get there, vs how much you will reduce your expenses.
I guess the biggest advantage for Mr. Pavlina is that his wife is psychic so surely she can alert him to any big shit that's going to hit the fan so he can prepare for it and juice his income streams appropriately.
The phrase "fixed income" is generally used to refer to people who are living off an annuity or a pension that doesn't change from year to year, so that they would be totally screwed by inflation or a large unexpected expense.
Referring to a salaried job as a "fixed income" is such blatant hyperbole that I can't take the rest of his article seriously.
Referring to a salaried job as a "fixed income" is such blatant hyperbole that I can't take the rest of his article seriously.
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We'd all like to believe that we could be winners but the main thing stopping us is the mostly sensible fear that we might actually discover how much of a loser we actually are.