Bankers Ditch Fat Salaries to Chase Digital Currency Riches
bloomberg.com
bloomberg.com
They lost their entire savings once Mt Gox collapsed, since then they have spent years working hard to recover their savings and now they are investing all of it in ICOs.
This won't end well. Seems to me like the story is repeating.
On a side note, the brigading/shilling here on HN is becoming quite annoying. I suppose it's a lot of computer nerds who are heavily invested in these tokens who are trying to get more new people invest their real money into these tokens so:
1) they can get rich quick
2) or recover their losses (lots of people heavily invested in crypto are underwater)
There are routinely four or five posts on the front page about cryptos and they usually lack substance. It seems like an entire industry with a lack of morals, ignorant about law and too often tech, but with the smug self-assuredness that they are on the verge of changing everything as only 20 somethings and extremists possess.
It doesn't really bother me that people are dumb, but it's not cool when you see this constant shilling you speak of, looking to pull in another taker who doesn't understand the tech or the financial implications of what they are doing.
I made and lost more money in a weekend than I'd ever made in a year speculating on cryptos, and this was 3 years ago, can't imagine the community or the possible winnings now. After my initial investment had been lost, I felt that very real pull of putting in just a little more from this paycheck because you know tomorrow you can win everything back. I've never gambled but I was certain that's the pull gamblers feel and I knew at least for me there was no difference. It's funny to watch friends repeat the cycle with Ethereum and ICOs. "Hey, ether is up, just made a profit :)". Of course that was a month ago at the peak, wonder how their investment is doing now?
It's an industry full of bozos and con-artists. Something good might come out of it, but I'm not investing a dollar more into that when I know that same dollar is probably going to fuck somebody else over. Besides, what good is building a fortune out of something you didn't really earn? Cool, you won the lottery, anybody can do that.
I guess this is the feeling gamblers have. I managed to use my will power and cash out my remaining investment and just stay away from this as I understand now how it can become addictive just like gambling in casino.
I know people who didn't resist and threw in their whole life savings into crypto. And they have lost massive amounts of money. I'm sure there are some "lottery winners" that have become millionaires based on early investment in crypto but they are very small minority. Most people end up losing money.
Like take the stock market downturn that happened in 2008. People who sold lost their shirts, but people who held onto it for a few years saw the market completely rebound and reach even more all time highs.
I'm not saying it's always smart to have this behavior, and there was a period where it looked like Bitcoin might not ever recover in price, but if you only invest what you can afford to lose (and I have, I could lose everything I invested and I'd be sad but not destitute), then you should be able to weather these storms.
I guess I am not a type of person who can take the stress of investing in something so volatile. I am trying to live a fiscally responsible and frugal life and this was probably the riskiest investment I have ever made.
I only invested a small amount. I could have easily lost all of it and it would make almost no difference to me. But I'm trying to save money to buy a property now so I will stay away from any kind of investments until I buy a house/apartment.
It is probably best to wait until you've bought the property. That property is an investment as well. I don't mean in the "buy a house and sell it later for big bucks" variety, it's an investment for more comfort in your life and future. I'm about ready to start saving up for a house as well, and it's going to be hard to stop throwing in $100 here, $100 there towards crypto and only put it towards a downpayment, but I need to start doing that.
Also stop buying video and board games for awhile. I'll have to only play the stuff I already have and never got around to playing for awhile. It's going to be hell :)
So I felt sad for a while but I have forgotten about it relatively soon. And it was a good lesson to learn.
I am planning to probably buy a property either end of this year or early next year so I am nearly there. My saving discipline will soon pay off!
Yes I think if you stop throwing $100 here and there at crypto, over 2-3 years that will translate into a nice lump sum of cash. Can be a basis for a deposit to buy a house.
With games, I'd suggest buying games which you'll be able to play for a long time so you minimize these costs. For example, I bought Starcraft 2 for £35 and you can play that game for years.
It was a deal including all 3 single player campaigns which are fun and then there is a massive multiplayer world where you can incrementally improve and challenge yourself playing tougher and tougher opponents.
Also congrats on having the savings discipline to save up for the house!
I might play Heart of the Swarm and Legacy of the Void later. There is also 4th campaign called Nova Covert Ops. But the pack I bought only contained WoL, HofS and LofV so I will probably skip that one.
That being said, I didn't have a ton of money to invest at the time, so I'm not rich or anything, and I tend to be a long term holder, but I highly doubt it's ever going to get all the way back down to $11 a coin.
I could have bought Bitcoin when it was $4 a coin, as I was paying attention to it back then, although the infrastructure for it wasn't in place and it was really difficult to buy, so I gave up on it. If I had, I would have made 625x whatever I put into it by now. And Bitcoin is not likely to ever get back down to $4 a coin. There will be buyers for sure if it ever gets that cheap (or the landscape will have changed so obviously that I probably would have sold a long time ago).
These sorts of statements explain a lot. You hear the same thing in every bull market, as investors conflate luck or the point in the cycle with investment acumen.
I'm not making any judgement on the usefulness or future of the blockchain et al, but this ico craze has a lot of similarities with the penny stock market, where many investors are simply relying on the greater fool to make them rich. Ultimately someone is always left holding the bag, and it is very often one without value.
The issuers and promoters always make out well. Many of the activities in the current ico market would be quite illegal if they were done in regulated markets.
I'm using the concept of dollar cost averaging and holding long term to help minimize the risk I'm taking, but I am certainly taking a risk. I did make a larger purchase early on with Ethereum but I'm still buying now.
My point is, if you bought two months ago when it was near its peak, and panic sold two weeks ago during the middle of the crypto downturn, you might be looking at things a bit too short term. I made a larger investment during a downturn two years ago and watched my investment go down to 25% of what I paid, and stay there for over a year, but now two years later it's up 300%.
You need to be patient and only invest what you can afford to lose, just like any other investment.
That being said, I don't disagree with you in regards to ICOs or the speculation on some altcoins feeling like the penny stock market. It absolutely does, and I mostly stay out of that (I have put small investments into some 'penny altcoins'). But I mostly stick to the big three (Bitcoin, Ethereum, Litecoin).
The digital currency landscape is still in kind of a 'Here be Dragons' unmapped territory situation. No one knows exactly where it's going to end up, but they know there's riches to be had if you can figure out how to maneuver through it, or get lucky.
I'm pretty obsessed with both bitcoin and several altcoins, and I admit that I'm gambling with them, possibly more than I should, but I don't trust ICOs at all. Almost all of them seem to be money raising (for the company) schemes for what's essentially total vaporware. I'm sure some will manage to hit it big and make people a lot of money, but I fully expect a large percentage of them to crash and burn once the initial novelty and exuberance wears off and a lot of those companies to take that money and vanish, and there doesn't seem to be any decent method to evaluate which ones are the good ones and which ones are the total stinkers.
Can you point to a single post where the top, say, 5 comments aren't completely negative toward crypto as a whole? They typically mention gambling, fraud, ponzi schemes and (like yours) Mt Gox, in a rant that isn't specifically tied to the post at hand. Look at the top comments on this article:
>Investing in crypto is like a gambling addiction
>cryptocurrency is the new Gold Rush
>I remember the .com-bubble...But this one; it is just stupid
>It's hard not to think of tulips
If the shills are out there, they must not be getting paid very well.
Someone intentionally or not is doing a really good job of that.
I believe blockchain will be implemented by industries where it is useful and can improve many processes.
I believe it will change international capital allocation, via token sales. Worldwide investment in the best & brightest.
So, it's easy to have altcoin without speculation. Suppose your alt coin has 4+% inflation / year built into the coin. It could become the worlds main currency without making anyone rich. Adoption would increase because transaction costs could be extremely low promoting it's use for a lot of transactions.
EX: Initial adoption would be small purchases like vending machines where CC/other coins have much higher transaction costs. This could extend to things like cheap subscriptions etc, and then work up the value chain until people are using it to pay rent.
'Value chain' has a specific meaning in business. It's a set of activities done to create a product.
PS: English is not that restrictive of a language. Speed limit is generally thought in terms of velocity, but you could use those same words to refer to the drug. 'With a dosage entering LD50 territory Jim was clearly approaching the speed limit.'
And reading them I have gotten impression of a lot of people invested in these technologies trying to irrationally argue for them.
Everybody skeptical does not understand the potential of smart contracts which are just like internet in the 80s/early 90s and will take over the world.
I think skeptical replies are a natural push back against this recent wave.
It was also known that MtGox was having problems months before they halted withdrawals.
What are the "spades" here?
At least quite many companies seem to be offering this kind of "ICO service" products - essentially they setup the ICO tools etc for you, help with converting the collected funds to dollars, etc.
I.e. the spades are the ICO scams.
These and basically anyone supplying them like voltage suppliers (Vicor) or even the more basic materials like silicon wafers (Shin-Etsu Chemical).
They're raising ridiculous amounts of money on completely unproven markets, with unproven teams. These are mostly teams that would struggle to raise a tenth of that money with a traditional VC where they'd have to be accountable for their product.
These ICO raises need to be huge since selling X00m of ETH or BTC moves the price... its absolute madness.
Once the house comes crashing down, it will be the same people who scoop up the coins back even at lower prices. Because of their belief in the coins unlike others who are just chasing cryptocurrency for the "1000%+ rise".
Raised something like $50k
1. Earn bitcoins with some serious crime (ransomware, drugs or something) 2. Organize ICO and invest the criminal proceeds to your ICO anonymously. 3. "Clean" funds as investments to your somewhat legit-looking company.
- "whales" (early adopters with tons of BTC) spend their BTC;
- common folks believe in BTC hype, "invest" real dollars in the market and provide liquidity for ICOers.
In the end the bubble bursts, "whales" don't loose much (only their BTC) and the common folks loose their "investments".
As much as I find the actual technical details of blockchain technology interesting (it's basically nerd crack) - the severe lack of utility to general society and the constant price bubbles are really astounding.
There are multiple levels of bubbles... the short term ethereum-led ICO bubble we are currently in, which is kind of overlaid on top of the long term bubble of cryptocurrency as a whole, which is itself overlaid on the tech bubble (where a lot of the disposable incomes getting poured in to crypto come from), which is itself overlaid on the broader world asset bubble caused by years of ZIRP.
Cryptocurrencies, BTC, ETH, ICOs, ZCash, Monero, etc - it's all just a giant blackhole of waste, greed, and criminal activity so ingeniously designed that it almost seems like some kind of weapon designed to harm society. But it's so much fun to work on and think about... that it is just hard to look away.
I also think you're failing to appreciate the benefit of having technologies that allow for a viable grey market. A third of people born today do not have government identification [1], and therefore cannot participate in the legal identity-based financial system. To increase their participation, the "crime" of unregulated commerce has to become more frequent in many countries.
In countries like Venezeula, cryptocurrencies are starting to play a role as a secure (by Venezuelan standards) safe haven for their wealth [2]. All of this activity is criminal according to the Venezuelan state, yet it is undoubtedly beneficial to Venezuelan society, in preventing corrupt state apparatuses from expropriating and squandering the meager private wealth of Venezuelans through hyper-inflation.
It also doesn't take much imagination to envision a future where tokenised finance on the blockchain helps millions of entrepreneurs around the world better access global capital markets. Speculation, which has created a token market worth billions [3], is just the first use-case enabled by this technology to conduct much more frictionless financial transactions. There will be more. I would also argue that this speculation, as chaotic as it is, is helping to bootstrap the industry, just as the dot com bubble did for the internet sector in the late 1990s.
So while I do think there is an enormous amount of hype in the cryptocurrency market, and that many will suffer losses from making bad investment decisions, I think this needs to be put in the context of the speculation underlying the value of major traditional assets, the promise the technology holds beyond speculation, and the capabilities it is already proving to have.
[1] https://twitter.com/NickSzabo4/status/544994985414639616
[2] https://www.bloomberg.com/news/articles/2017-06-15/venezuela...
This is one of the greatest use of cryptocurrency imo. If you go back even a few years ago, formerly stable countries like Cyprus were raiding bank accounts to make up for their shortfall. As costs rise, and there are less and less people of working age paying into the system, governments will become more coercive in order to fund healthcare and benefits for the largest voting block. Crypto is a storage of wealth and a way to protect yourself from government expropriation.
I think that number is closer to 100%. Most babies do not obtain government IDs on their date of birth.
Do you mean a third of people on earth? A third of people over a certain age?
Right now a lot of people are making the mistake of investing in an ICO that they don't understand. Like with any kind of investing; it's their responsibility to do their research. What will happen at the end of this is what happens normally in the financial world; smart people who understand each currency are going to make money at the expense of wealthy but poorly informed people who are randomly pouring their money all over the place trying to make a quick buck.
Moreover, a lot of the money that goes into these ICOs ends up funding open source projects that are either directly or indirectly related to the cryptocurrency itself (and this helps the entire industry as a side-effect).
Sure, there might be some black market money involved but I think that at least much of that money will be put to good use. It's the government's job to track people who are using the platform for illegal means.
If somebody buys chemicals to make illegal drugs, it doesn't make sense to arrest the chemists for manufacturing the chemicals. The chemicals can be used for good and bad; if you sum everything up and the net result is a positive change for society, then overall it is a good thing.
That's not how it works. Many kinds of securities can only be sold to accredited investors for just this reason; you may not like that law, but it is the law.
I think ICOs are more fair because unlike in mainstream finance, there is much less information asymmetry because the code is all there for anyone to see. Anyone can access all the information they need.
Well... I'm not against ICO's, but as bad as traditional finance world is, there are a lot more controls than in ICO's.
For example it is quite easy for ICO organizers to buy their own tokens using their own money, without anyone knowing about that. So they can actually pump their own funding round up without that costing a dime - they just get the money themselves, and additionally they can also sell the tokens on aftermarket.
With traditional markets that kind of tricks are much harder to pull off.
When the bubble will burst, angry mob will look for someone to blame and politicians will look for initiatives to protect them. Decisions will be made, and laws enacted. This thing will be emotional, not logical.
Sure, ICOers are raising money for their dreams. And the "whales" "investing" in those ICOs are mostly lucky tech-ish folks who behave irrationally (like investing-1/4th-of-Whatsapp-in-a-service-with-a-few-hundred-users-irrationally). Whales will not suffer much in the end and ICOers will drive their Ferraris. It's those who believed in "invest in cryptocurrencies" hype in mainstream media who will loose the most.
After all, if we treat the whole cryptocurrency ecosystem as a blackbox, dollars come from those humble folks to ICOers. Just with an extra twist of BTC on their way.
1) A functioning business.
2) Actual investors - i.e. people who own a portion of your enterprise, with all the obligations and expectations that go with that.
3) Regulation and oversight.
I suppose an IPO without 1) is possible in principle, but then it is hard to get 2) and you have to be careful of 3).
BTC:USD doesn't work like that.
But this one; it is just stupid.
Massive amounts of electricity and hardware wasted to keep a distributed ledger safe; an army of computer nerds facilitating fraud, narcotics sale and money laundry; and finally the bankers sensing bucks to be made on a large number of idiots.
Well to me that sounds just like business as usual... Except now transactions are stored in a permanent decentralized ledger, unlike before. And also previously there less computer nerds and more bankers.
However, I agree that almost all ICOs are cash-grabs. In my opinion we already have coins for all verticals that matter.
That's the type of fluff I keep hearing coming from the bitcoin enthusiasts but I have yet to read a compelling argument about what it'll enable and how exactly.
"Bitcoin will kill the banks", "bitcoin will prevent the evil government from stealing your money", "bitcoin will cure cancer and polio". How it'll do any of that and why it's a good thing, that's left as an exercise to the reader.
In effect if we look at how bitcoin is effectively used today then the parent is fairly objective I think. There's speculation, more speculation, money laundering, black market stuff, gambling. Oh and did I mention speculation?
There aren't many legit use cases where bitcoin beats fiat nowadays, except maybe sending money to a foreign country (and even then it's not certain, what with the high fees and huge variation in the price of late).
I still don't understand how people expect it to become maistream. "It's like Visa, but if you make a mistake you may lose all your money with no hope of ever getting it back, it's not accepted everywhere and you have to wait for about an hour to get a confirmation. But hey, you can send money to Burundi super easily with it!"
I know, I know, there's SegWit coming, which might address some of these issues. In particular I hear that it'll cure the rabies too. To the moon!
I wouldn't bet against cryptocurrencies doing the same thing, that's not to say I know how they're going to do it.
Nobody could tell you what to do with an mp3, nobody could tell you what you could or couldn't put in it or what you could play it on (licensing I know... but you take my point). Mp3 gave everyone the ability to experiment with audio and distribute it in a way that was incredibly difficult before.
Crypto currencies do the same I think for money, they are an internet native version of something and that "internet nativeness" implies a level of creativity, flexibility and speed of iteration/evolution that can't be matched by offline equivalents.
I understand the questions you're asking and really I have no answers, but I think the "internet nativeness" of something like crypto currencies is not to be underestimated and I think it's why there's so much interest in the area.
I'll give an additional hint to reader: who benefits from encryption that even law enforcement cannot break?
Who benefits from TOR?
People who live in countries with regressive regimes where law enforcement can be legitimately dangerous?
Who benefits from a financial transaction system that law enforcement cannot censor?
It's still only really useful for relatively rich people who want to get money out or in, I doubt the average Venezuelian bothers with Bitcoin. And Bitcoin requires a widely available "free" internet connection to work correctly which would be trivial for an authoritarian government to disrupt. Turkey doesn't hesitate to block Wikipedia and Twitter, I doubt they'd have any problem blocking the bitcoin exchanges and the bitcoin peer-to-peer protocol if they felt the need to do it. Sure you can work around this and smuggle the blockchain somehow, but it becomes a lot less practical, especially if want something that you can easily spend for your day-to-day purchases like food and toilet paper.
I know there's a lot of defiance towards our governments all around the world and there are some good reasons for that. However I feel like we're having the bad engineer reflex, trying to find a technical solution to a societal issue and we might end up making things worse. I want to be able to trust the government that I democratically elect and I want this government to be able to gather taxes and even control the currency to some extent.
Instead Bitcoin will make it trivial to evade taxes, smuggle money overseas and makes bribery easier than ever. You can't seize it, you can't freeze it, you can launder it super easily etc...
At least when people open an illegal account in some tax haven it leaves some paper trail, there are intermediaries in the loop, you take some risks, you have to figure out a way to smuggle the money over there while keeping the books clean. With Bitcoin you click on "generate a new receiving address" and you're done. If the point is to make governments less corrupt and more accountable I don't see how that'll work. You can't have the Panama Papers or the Swiss Leaks if there's no paper to begin with.
The fact that it wastes an ungodly amount of energy to secure its ledger is just the icing on the crap cake as far as I'm concerned. And it's not even super successful because as far as I understand the majority of the hash power is currently in mainland China, so if the Chinese government wanted to take over they'd just send a dozen of military types in each datacenter and that'd be the end of it. Then you make a few double-spend attacks to make people lose all trust in the coin, the value collapses, nobody mines it anymore, game over, thanks for playing.
Same is said for encryption.
My perspective is that tools empowering individuals is the solution to societal problems. Cryptography does that, whether applied to communication or applied to value transfer.
Monetary transactions are already pretty well protected, which makes it hard for somebody to steal my credit card and use it without my consent. It's arguably even safer than Bitcoin since the bank and regulations offer me some protection if something goes wrong.
So bitcoin isn't about making secure transactions the way HTTPS is, it's about hiding my transactions from the bank and, transitively, from the government. It's about creating a completely free libertarian market.
Maybe you actually want that but I wish there were more discussions in the bitcoin world about what model of society people really want. I have a hard time believing that all the bitcoin enthusiasts are die-hard objectivists. I feel like many people saw the "get rich quick" scheme and didn't stop to think about the consequences.
To borrow some progressive terminology: check your privilege.
Also let's not forget
https://en.wikipedia.org/wiki/Operation_Choke_Point
https://wikileaks.org/MasterCard-breaks-ranks-in.html
Civil asset forfeiture
etc.
Well here is your mistake. Why would you ever trust a government, or anyone for that matter? Sure, we hope that people are good, but 99% of people operate based on an incentive structure. The incentives in bitcoin for the miners and the participants are well defined.
Depending on who you are, one could argue the United States is one such country. If it can apply to the US - it can likely apply everywhere.
For people in nations with stable governments and currencies, access to credit, and nothing to hide, there's no compelling to use cryptocurrencies day to day.
What happened to the outrage at the bailouts in the 2008 crisis? How have we completely forgotten that? Opinions differ as to the underlying causes of the 2008 crisis: was it reckless bankers and insurers, was it criminal bankers and insurers, was it the repeal of Glass-Steagall? Many people, myself included, place the blame squarely in the hands of central bankers. The crisis was created by them, and then glossed over by them by throwing money at the people who took the most advantage of their manipulations.
The problem is not that someone else should be in charge of central banking, it's that _nobody_ should be in charge of central banking -- the central banking, really, and the notion of a "lender of last resort" should simply not exist. Part and parcel of that is that we need a new currency -- one that cannot be created on a whim based on some "understanding" of macroeconomics that is completely incorrect. The goal here is so absurdly ambitious that people have stopped talking about it -- replacing Visa is nothing; Visa can exist and spend Bitcoins, just as Visa can (and does) exist and spend Euros and Yen and whatever the hell you want. But Bitcoin is the first serious attempt to make a currency that is independent of central bank manipulation (second, I guess, if you count gold).
> There aren't many legit use cases where bitcoin beats fiat nowadays
So here's the use case -- the US government cannot literally quadruple the amount of bitcoins in existence in order to pay off a bunch of bankers who lost their shirts, and a bunch of auto manufacturers that lost their ability to compete. I get it, this is not going to make it easier to buy your coffee, or whatever "mainstream" means to you. And there's a good chance that Bitcoin will not topple the Federal Reserve or the European Central Bank, or whatever, but it's an avenue to start opting out of a financial system that is increasingly dependent on massive government actions, and supporting the massive covert and overt international economic warfare being waged in our name, supporting the contemptible level of corporate welfare that threatens to undermine those aspects of our government that are essential to a free society, and resisting the attempts to use inflation as a hidden form of super-duper-regressive taxation to punish those who try to save money.
The current value of BTC comes from trust. It's just not the kind you were expecting it to be.
The value in Bitcoin doesn't come from trust in people, it comes from trust in crypto.
Money is just another kind of trust.
That tells me that your judgement of the wastefulness is subjective. Other people obviously derive value from it.
I think the same will apply to tokens. They will always be worth something so long as banks keep charging transaction fees for moving money around and so long as a reliable network exits to support the token.
Even if you assume that nobody wanted to hold Bitcoin for longer than a few minutes (long enough to complete a transaction), it would still have value because it saves people lot of money on international transactions.
The total amount of money saved would be reflected in the price of the token based on the real-time supply and demand in any given minute interval.
The intrinsic value of a token is the total amount of money that it saves people from having to pay to bank fees for moving money around (with token price fluctuation risk factored in).
That's why ICOs are valuable; they add transaction processing capacity to the overall network (which encompasses all cryptocurrencies) or at least shift transaction processing capacity away from Bitcoin (E.g. when bitcoin miners are re-purposed to mine other more efficient Altcoins).
The limited supply of tokens doesn't matter. The real underlying value is driven by the limited supply of machines which process token transactions. If all machines and all consumer attention suddenly shifted to a different Altcoin, then Bitcoin's value would drop to zero and that other coin's value would skyrocket.
Fine- Let's just call them "tulips" so we can all go home and enjoy the sunny weather today.
Might be an interesting cryptographic concept. An asset class? Nope.
> isn't it also illegal to buy unlicensed securities
There are "safe harbors" like Regulation D [1]. This is how private companies issue securities. There are still rules about to whom you can sell your securities and the minimum information you have to make available to them. Needless to say, I have not seen an ICO promoter make use of these safe harbours.
They've been warned, but what does that even mean?
Unlicensed securities that are not exempt from the law are illegal to buy or sell.
The implications seem clear to me. Again, IANAL, but a lot of people seem to be commiting felonies, even if they don't know it yet. These ICOs can ruin the lives of more than just the owners.
unaccredited investors, oh my! When you brush your teeth do you make sure you have government authorization to do so? Also, I hope the toothbrush and the toothpaste were OKed by a government bureaucrat, because thinking for yourself is hard!
ICO's like with most new tech are going to be plagued with get rich quick schemes, and there's a lot of FUD going on, but the concept it's great. When you have a token, in a given platform, you align the incentives of the people using that. It encourages people that are part of the network to create value for it, since it also impacts positively on their money.
Take decentralized storage platforms for example, Storj, FileCoin, Swarm, IPFS. It's a software that you install in your computer, you asign how much disk space you are willing to contribute, and in return it pays you in that network token. People that wants to save their info on the platform, have to use the same token.
I've been part of the bitcoin economy since 2013 and i've seen a lot of shitty and awesome projects alike. Right now is the wild west, because since there is no legal framework, the regulation has to be as well self created by the ecosystem. So , I think in around a year or two, we'll start seeing a much better ecosystem, with more knowledge, and less scams. It just takes time.
Buy couple real estate properties and rent them out, invest remainder in blue chip equities and collect dividends. And you never need to work again.
However, wouldn't somebody who makes say 9$ an hour have the same thoughts about developer salaries?
> If I made 200k a year, I would work for about 5 years and then retire.
I mean it's possible if you save a ton and live very cheaply, like somebody who today makes 9$/hour might be used to doing.
People always want more. Though, there is a sweet spot (~90k/year?) where more money means less and less to you.
So yes you make 200k (before taxes) but you spend 35-40k per year on rent plus bills (water, electricity, council tax, internet etc).
Throw in some social life and drinks once or twice a week, car plus insurance, supporting family financially.
So let's say after all that you end up saving 40k per year net. Times 5 is 200k. That is not enough to retire.
Now do the math with 1 million salary (the lowest possible 7 figure). Same living standard. After 5 years you can save let's say 1.5-2 million (I didn't do the math so if I am way off please correct me).
Now that is an amount you can retire on:
1) Buy two properties for 500k (live in one, rent the other one)
2) Invest 1 million in blue chip equities, this will pay you around 35k per year in dividends
3) You still have a nice sum of cash left on top of that
So you can see that 90k per year is definitely not a sweet spot. There are still massive improvements if you can make 200k, 400k, 800k and so on.
Yes perhaps going from 35k to 90k will improve your living standard much more drastically than going from 90k to 200k. So you could argue that there are diminishing returns.
But you are ignoring the fact that the higher you go the sooner you gain complete financial freedom when you can retire and live completely free.