Hacker News Reader

Comment by xvector | Hacker News Reader

How should one go about doing this?

Realistically, most people can't and/or shouldn't do this by building a business or working at a startup. Both of these are very risky and won't generally accomplish what I think the parent comment implies. Instead, the more reliable way is to invest as much of your income as you reasonably can in securities like stocks and bonds so that over time you are indeed making money doing nothing. Also, if your company offers stock options, opt for those if you think the company is going to do well in the future.

How does the reasoning of buying stocks and bonds work over time given the current crisis has wiped out all the gains for many people made in the past several years utilizing this strategy, and before that was 2008 which did the same?

Tends to work well, outside black swan events.

Yes, if black swan events happen every 10 or so years, and the black swan events wipe away all the gains of before... is that really helpful advice?

For people who never want to look at their balances and don't have a coherent strategy? No, it's terrible, use ETFs and target funds.

The S&P 500 has been a solid investment, historically speaking, even with the black swan events. It has more than tripled since 2009, and doubled since 2007 (before the 2008 drop). And with dividends it's even better.

This idea that black swan events keep knocking out all the gains just isn't true, looking at the numbers. But if you don't like stocks, buying real estate and renting it out is also a good option.

You don't need to make gains. You need to spend significantly less than you earn. If you can work for 4 months and survive for 12 then you're there.

Compound returns are a nice bonus if they come, but not necessary. Sensible frugality is the important part.

This doesn't work for people who want to have children, who may have healthcare conditions, who need to take care of their parents, etc. Spending significantly less than you earn won't mean much if inflation means anything you earn is worth less year over year.

You need to maintain value or decrease at a very low compounded rate.

You don't need compound gains.

> This doesn't work for people who want to have children, who may have healthcare conditions, who need to take care of their parents, etc.

I'm not sure what this has to do with my point. You need to save more than you earn. If you can't or don't want to, so it goes. Not everyone's a winner.

Step 1. Make sure everyone else don't do this or else equity will be worth less than wages and drive actual wages down.

Step 2. Make sure you yourself are exceptional as far as step 1 is concerned.

Step 3. Make money while asleep.

You wouldn't really. Because the current projections assume most people will "rent their time" and a minority lean towards equity.

It's like saying "everybody should buy second hand things to save money", ignoring the fact that the saving comes from many not buying second hand.

You need to FIRE. Don’t necessarily need to retire early if that isn’t your thing, but being financially independent is key.

See https://reddit.com/r/financialindependence

Naval podcast is pretty good: https://www.youtube.com/watch?v=jemPACNo1_I&list=PL5QAQBV5zC...

Reply on news.ycombinator.com