A frugal social worker left $11M to children's charities in his will | Hacker News Reader

A frugal social worker left $11M to children's charities in his will

edition.cnn.com

54 pointsmonsieurpng25 comments

Very admirable, though the headline hints he amassed this fortune solely through saving a modest paycheck when he was a banker earlier in his career and received a "sizeable inheritance".

title seems somewhat editorialized to make one wonder how a social worker had $11M to give.

> He said Naiman received a sizable inheritance when his father died, which added to his fortune

how much of it can be attributed to frugalness remains questionable.

a great deed, nevertheless.

> how much of it can be attributed to frugalness remains questionable.

All of it. Most people that luck into wealth spend it all if they are not schooled in the arts of finance. A couple of shopping sprees, a bad investment here and there, a bad fund manager and it's all gone.

I mean, the guy had a career in banking, he's not someone off the street who won the lottery. He could also have inherited $30M, then lost most of it. The title makes it seem like he was clipping coupons and eating ramen.

"Banker-turned-social-worker leaves $11M to children's charities" would be a more honest headline.

Yes, but given that the publishers live by the number of people that visit the websites clickbait should be assumed. It's rare that a title downplays the content of the article, and if this is a lie it is a pretty subtle one and one by omission. I'd give them a pass.

> have inherited $30M, then lost most of it. The title makes it seem like he was clipping coupons and eating ramen.

He was doing that. He was also working multiple jobs. He also had an inheritance. It was all of these things.

Yet there are many frugal people in the world who have never been millionaires.

Sure. It's necessary, not sufficient. The only way to get and stay rich is to not spend all of your money. It may seem obvious, but it's a step that many high earners seem to forget.

One necessary step is to have a source of money. If you don’t have money in the first place you can’t waste it.

Spot on. Spending less than you earn is a prerequisite to accumulated wealth. Going the opposite direction is a formula for poverty. In both cases, it works without regard for the level of income.

So if you work at Walgreens, and save all your extra money, which amounts to $37 a week...

{citation needed}

Rather than "most", I reckon there are very few people who spend that much wealth, and they all have articles written about them.

around 70% of lottery winners end up filing bankruptcy. Lots of professional athletes go broke as well. The rich don't always get richer, most people will revert to mean if they essentially got lucky

https://www.cleveland.com/business/index.ssf/2016/01/why_do_...

Always worth it to delve into how a statistic was computed. In this case, the organization cited as the source of the 70% figure itself disclaims it:

""" Over the past couple of years several news organizations have attributed a statistic to the National Endowment for Financial Education (NEFE) stating that 70 percent of lottery winners end up bankrupt in just a few years after receiving a large financial windfall. This statistic is not backed by research from NEFE, nor can it be confirmed by the organization. Frequent reporting—without validation from NEFE—has allowed this “stat” to survive online in perpetuity. """

(https://www.nefe.org/Press-Room/News/Research-Statistic-on-F...)

I think the most important thing here was that Alan had a good heart and donated all his money to charity very willingly, he could have spent it all at the end of his days. I applaud his efforts.

I'm glad he bought the FR-S, so he at least enjoyed something for his years of labor.

As for accumulating $11M, it's not surprising. Decades of spending less than you earn, combined with wise investing, are known to produce riches even for modest earners. (Of course the inheritance must have helped. But I bet he'd be well off even without it.)

As an accountant my observation is, the skills required to make money and spend money are very different.

The time and effort most people put into the former is much greater over a lifetime than the latter.

In this case you can see what happens when the rule flips.

Social workers don't earn $11M in a lifetime, and are unlikely to earn $2M total - this type of wealth cannot be amassed by frugality.

This is irresponsible journalism.

From the article:

"Naiman became a social worker after leaving a career in banking."

"Naiman received a sizable inheritance when his father died, which added to his fortune."

In this case the article says he got a couple million from his parents. He was also a banker as well.

Suppose he was just a social worker. Suppose you saved 30k from your job and invested in amazon when it started. It would be worth 30 mil today. But that would require being frugal and not pulling that money out and leaving the compounding effects to work.

I mean it would also require the foresight of going all in on one of the biggest companies of the decade, and keeping it through the rest of the industry was falling apart. This argument is fairly akin to "Suppose he won the lottery."

I just used Amazon as an example. There are plenty of companies that have had huge gains. My point is if you are a good investor you can turn small amounts to a large amount.

> this type of wealth cannot be amassed by frugality

It can be frittered away by a lack thereof. I’ve seen lots of bankers blow through unseemly quantities of wealth due to a lack of financial planning.

To my mind, it doesn't actually suggest that at all. It only suggests "Everyone is shocked that a guy who held his shoes together with duct tape had that kind of dough. WTF??"

You're not wrong.

But it's important to note that the key to amass wealth is investing not collecting paychecks.

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