Comment by jkolio | Hacker News Reader

Comment by jkolio | Hacker News Reader

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People might reply, "Well, take the risk," without acknowledging that risk is two-dimensional. There's a range of success and and range of consequences. Something traditionally considered "high risk", like investing millions of a billionaire's money in a start-up, might have low consequences for the direct investor. It sucks if the start-up fails, but they're still a billionaire, probably. Their lifestyle doesn't change substantially. Compare to a low-income worker choosing a car: maybe a cheap used one that could break down at any time, or a more expensive one is less likely to break down (if you stay up-to-date with expensive maintenance), or a much more expensive new car that is unlikely to break down (but that puts them in a substantial amount of debt). In every case, there's a way for the prospect to go sideways in a manner that would likely end with the worker losing their job, with (statistically-speaking) no savings cushion. However you rank the risk of each (at least one being the lowest financial risk), you have high negative potential consequences.

My impression is that people who say "take risk" literally always mean "take bets where you have little to loose and a lot to gain". And they look down on people who took actual risk and lost.

What "take risk" means is that you should try to be entrepreneur in situation where you can fall back and be well paid programmer again if it does not work out. Or that you should risk someone elses money.

EDIT: I guess good rephrase would be that "take risk" usually means "overcome irrational fear when you are in perfectly safe situation". That is what actually people mean.

They also look down on people who could not take the risk, calling them cowardly, lacking boldness, entrepreneurial spirit, etc.

"Sell everything and fund my startup" is fine when you've got a 12 month emergency fund, living in a paid-off home, , and you parents are able to bail you out. It's not fine when failure means you're penniless and homeless.

Further: it's much less of a risk when you have a metaphorical rolodex of wealthy friends from university or business school. You're not cold pitching - not even slightly. Doors open for you, instead of being slammed in your face.

Yet they'll tell you shit like "Try hard enough and you will succeed! I worked long and hard, people saw that, and were willing to invest. Good hard honest work is rewarded."

The people working on their startup 12 hours a day who don't have connections have no idea that the bit left out is that "people were willing to invest in my idea because we chugged beers together in the basement of Sigma Chi."

This nails it. If Elon Musk loses 220 billion, he still does just fine. If a subsistence farmer in a remote place loses his couple hectares cassava crop, he and his family risks famine.

Wow, that’s an insane fact. Right now, the internet says he’s got $232 billion. So he could lose $231.9 billion and still be really really rich.

> Something traditionally considered "high risk", like investing millions of a billionaire's money in a start-up, might have low consequences for the direct investor. It sucks if the start-up fails, but they're still a billionaire, probably.

That's not so much about being a billionaire, but about diversification.

Fortunately, even people of very modest means have access to diversified index funds these days.

If you have a few thousand stocks in your index fund (eg like VWRA or VT), then in doesn't matter how risky any individual stock is (like the startup in your example), as long as holding them has positive expected value.

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