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Comment by rantanplan | Hacker News Reader

> it's easy to lose a billion dollars

20 $50 million donations to various groups and $1 billion dollars is gone. You could probably do that in 5 years and still not come out as effective.

The average american makes ~2m in a lifetime, 1b$ is 500x that. "Losing" 1b$ is ludicrous unless you are actively looking to lose it (or don't care about it, like musk & al).

How do you lose what 500 people make in their lifetime?

Yeah, but the average American also isn’t making $50 million donations to keep a pet project going.

Let's say your net worth is ~100k. That's equivalent to a 2.5k donation. Investing 2.5k in a pet project is pretty common, and you don't find yourself in the streets for doing so.

I think people that say it's easy to lose 2b$ don't have a clear understanding of the amount of money that is. It's a crazy amount for one person.

I think you’ve lost the context. If signal does not figure out revenue, they will require more $50MM donations. Using your analogy, that would be like you spending $5,000 or $10,000 when you originally only planned to spend $2,500. Perhaps you wouldn’t flinch, but many would pull the plug after the first or second time, especially if disappointed about some aspect of the project. Your project is at risk by relying on your continued good graces, even though you may technically be able to afford more investment. Likewise, signal is at risk if it requires periodic investment of millions from Acton, even though he can afford it and currently supports the project. Since he donated a few percent of his net worth, it’s a better situation than if he had donated, say, half, but signal still needs to take the risk seriously.

Look at what happens to lottery winners.

There’s a world of difference between a million and a billion.

Just physically moving that amount of cash is difficult and takes time. Even those lottery winners don’t blow the whole lot in less than a year.

> Just physically moving that amount of cash is difficult and takes time.

...that's why it isn't moved physically?

Forget it in your pants, and it went in the washing machine.

You know, same problem as everyone else, really.

That's why they're making all of the cash money plastic, so these billionaires can stop accidently laundering their money. Genius!

Sure but even a meagre 8% return on $950M is $76M. Buying and holding SP500 index funds in 2021 would have returned more than triple that, at 26% or so.

You can give away 50 mil a year and still get tens of millions dollars richer if you're sitting on $1B.

It's only "easy" to lose $1B if you have absolutely no idea what you're doing.

Since when is an 8% return "meagre"?! I get it, the last year had a crazy stock price increase, but it was an outlier.

The average SP500 return for the last 50 years is north of 10%, so I consider 8 to be meagre.

4%. 4% is the number. Don’t count on anything over this.

The next 10 years? 0%. We’ll be lucky if the market is flat in the next decade.

10 year treasury bonds are essentially risk free, as they are guaranteed by the US Treasury. Current 10-year yields are a bit less than 2%, so that's essentially your minimum return there.

Assuming that interest rates remain above inflation, which is already no longer true. What's the point of earning 2% a year when the USD is losing 6% a year in value (and that's likely far undercounted).

The point is it's possibly the most secure investment available, so that's why it's a good proxy for the risk free rate.

Whether or not you want to invest at that rate is entirely a separate conversation.

Is that 4% inflation-adjusted?

Usually yes. In times of inflating asset prices, the value of the investment tends to inflate with it.

Usually yes. But … not every year exactly, so it works best when viewed over a longer term.

A meager 8%. You have betrayed your total ignorance when it comes to anything having to do with money. You have no idea what you’re talking about. The only investment that will give you 8% is an extremely risky one and that’s not an appropriate vehicle for a billion dollars. And you say this in the world wide environment of negative interest rates…

The reason not many rich people lose their money is because becoming rich is hard and you have to be smart to do it. You don’t have to be good or moral but you have to be smart. Even then there’s a ton of washout among new millionaires. But you don’t get to a billion by accident. Look at all the people who make tons of money through some other means than intelligence — lottery winners and football players — they all lose their money even if it’s millions. Sorry bud, the system isn’t rigged. Life is just hard.

>The only investment that will give you 8% is an extremely risky one and that’s not an appropriate vehicle for a billion dollars.

Buying SPY returns on average 10% or so, year over year.

Do you consider the S&P500 to be "extremely risky"?

>Sorry bud, the system isn’t rigged.

I feel like you replied to the wrong person? Between you and I, the only one who brought up the question of whether "the system" is rigged or not is you.

Or, you know, a one $1 billion dollars donation and it's gone as well :D

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