Hacking debt
johndcook.com
johndcook.com
That said, I definitely support his statement that people should have some hacking / learning time budgeted, even if only to avoid the scenario I mentioned above.
If you want to learn technology X, the best way to do that is to build something with it. You want to build something that is motivational in itself, something that is useful or fun. Building something useful is real work.
Interestingly, at that point the psychology goes from motivational to avoiding extra stress altogether.
By considering the present value of savings, you are able to judge the relative difference between a loan that recognizes savings in 30 years vs 10 years, for example. Future interest rates are important here because it reflects your opportunity cost of paying down debt (ie you could be saving this money in a risk-free investment instead). Lastly, taxes are extremely impactful because, for those who qualify, paying down a tax-deductible mortgage or student loan ultimately lowers your after-tax income.
Although my site is still somewhat beta, I invite folks to come sign up for free and give it a try.
[1] - https://beanjockey.com
1) Pay all your debt now, unless you have a sure way to make money at a higher interest rate CONSIDERING INFLATION (ie if you hold debt at a fixed 2% annual rate and can access 3% guaranteed placement, don't pay your debts if inflation is <1%)
2) Never make any debt ever again UNLESS it is for a productive investment. A productive investment is something that will pay the amount due + interest + leave you something to leave on. Physicial capital (tools) is an investment. Today you must have a really good reason to buy your own server instead of paying-as-you-go for a virtual server. Education may - or may not be, it 's a complex question (credentialing may mean you need paper diplomas more than the actual knowledge)
3) Leave beyond your expenses, save and invest. There're various websites with suggestions on how to do that exactly.
The most important thing is the endgoal : no debt, money in the bank, freedom to work on jobs or projects you value, without the short term constraints of putting food on the table.
When in doubt about making a debt, go see 2) - purchasing property to flip it on the market is taking a risk. If you have followed 3), it's a risk you can take.
Now let's translate that to development debt :
1) you should fix your code now, unless there are more productive uses of your time. Fixing old complex code is like fighting inflation - don't bother. You may win some battle but can't win the war. Fixing new code however is a good idea, while it's still clear in your head.
2) you shouldn't have made a technical debt in the first place, except to ensure a sale or quick money. if you did, you'd rather have a good reason and some profits to show
3) code in a "beginner me could understand that" way. Remember it takes someone twice as intelligent to debug some code, so make life easy for yourself.
The end goal is the same : code that work, with the freedom to repurpose it, without the short term hassle of fighting bugs everyday.
When in doubt about creating technical debt, go see 2) - feature creep to try to secure a sale is taking a risk. If you have followed 3) and your code base is clean enough, it's a risk you can take.
EDIT : Downvotes, really? At -1 now ?? Please tell me how I am not following the guidelines and not contributing to the discussion.
EDIT2: falcolas, sorry, but I see technical debt just like real life debt. It is a powerful and dangerous tool, and if one is looking for solutions on a blog where a guy advise playing around for the fun of it you're not doing to lower your technical debt - you're going deeper into technical debt.
In his own works : "hacking debt" : "Some portion of a career should be devoted to hacking. Not 100%, but not 0% either. Without some time spent exploring and having fun, people become less effective and eventually burn out.".
Huh? "hacking debt" won't resolve the "technical debt" - that's completely unrelated. I just don't and can't agree with his approach of playtime for the sake of it. One should remember the dead simple advice posted above (and heavily downvoted) before trying to do better. Not everyone is a rockstar or a special gem needing daily bouts of playtime to keep inspiration. Most however need to keep a training routine and consider which technical debt is worth taking on, and which is worth leaving aline.
BTW, as I posted 2 weeks ago (https://news.ycombinator.com/item?id=5508906) :
"Take a military analogy - if you're not doing something "shippable" (ex: fighting), you are training to maintain or raise your potential for when you will have to get in action - or at least to maintain discipline."
That's not playing for the sake of playing or having fun. That's playing with a goal.
Some people over-emphasize this. Generally speaking, 10k in debt, 10k in the bank, at a non-usurious interest rate is far more stable than 0 in debt and $3.50 in the bank.
I'd contend that debts south of 5% fixed interest rate should be HIGHLY considered as "not worth paying down" until your retirement account is fully loaded with enough cash to retire TODAY as this is a very strangely low rate, and one that will be over the life of most loans in that tier, at or less than inflation (looking at historical levels of inflation)
You're not going to be able to borrow at 4% when inflation is at 5%, but you sure can keep on to that 4% debt from now for 10 years, and instead bank extra payments or invest them
That's not usually the advice financial counselors give. Dave Ramsey, for instance, would probably say keep $1k in the bank and pay pay off $9k of the debt and [snowball] the remaining payments.
Also, assuming you can get a 12% ROI over the years, and accounting for inflation, you'd be left with 12%-5%-4%=3%
Is that hypothetical 3% gain worth keeping the debt, which has risks of its own? e.g. you are incapacitated due to an accident, or you incur a huge medical bill that you need to split into payments, but you can't pay much because, oh "i just have this loan at 5% that's not worth paying off.
Actually, if something bad happens you've got $10k in the bank. So when you are incapacitated, you've got several months' of living expenses -- or you can pay off the medical bill outright.
The common "pay it all off; no debt ever" advice that I've seen given out for free on the internet is geared toward people with tons of debt. This advice is not great for persons with small amounts of debt, good cash flow, and a healthy emergency fund. When you reach this point, you have the option to use debt as a tool, and you have the ability to negotiate with lenders to get better terms. (Implied here is that you can negotiate better terms because you have the ability to simply pay cash and walk away from the debt-negotiation table.)
10k isn't ENOUGH in the bank IMO for most people living in SF. It's probably closer to 20k, but 10k was just a random number I pulled out to demonstrate flexibility of cash on hand. Then again, CA has really tenant friendly eviction laws, so maybe not...
It doesn't have to be ACTUAL cash, just near cash holdings not strongly effected by volatile securities (such as the stock market)
Not paying on a debt for an extended period of time (that is, not having any installment-based debt) will harm your credit. This is one of the more ridiculous and infuriating parts of building credit for those of us who don't want to accrue massively expensive stuff but actually want to be able to do things like purchasing cars or homes that aren't 20 years old or shacks in backwoods Mississippi, respectively.
What you describe would be great advice for someone who has already established credit and/or acquired those investments/purchases that benefit from or require it and has the time and money to do things like flipping property. For the vast majority of the credit-affected world, that's not even close to the case.
The article is two paragraphs related to programming and technical debt - worth reading on it's own merits.
If you can get 3% nominal and hold debt at 2%, it doesn't matter what inflation is, since your debt isn't in inflation-adjusted dollars. Indeed, the higher the rate of inflation, the less it makes sense to pay off debt. If you have debt at 5%, and your real rate of return is only 3%, it might still make sense not to pay off that debt if inflation is > 2%.
Paying off debt is not risk-free, in the sense that paying down loans now is a bet on future inflation being low.
A mortgage payment includes a fixed amount of "principal + interest". The interest portion is calculated each month based on the outstanding principal.
Every dollar of principal you pay early reduces the amount of interest you pay in every payment thereafter.
You are correct that you still have to pay the same monthly payment, but it is knocking off the immediate next payment (which is high interest, low principal), rather than knocking off the last payment (which is high principal, low interest).
Paying additional principal near the beginning of a mortgage thus makes a lot of sense (it eliminates interest on that amount for the next 360 months).
To your point, yes, next month's payment has a higher ratio of p:i, but you have not "saved" anything...yet. In the end, the extra payments you make are just going towards reducing the maturity date of the loan. You are correct that the relative impact of making these extra payments early on does have a tremendous influence on the total interest saved over the life of the loan (and determines how many minimum payments you will chop off the end of your term). I didn't make that clear in my initial comment.
He's essentially talking about directed, productive work versus undirected, creative work. You need to spend some of your time mastering new skills. Trying new techniques out. Otherwise, you're going to burn out.
It's kind of like work-life balance. You can't work every waking hour. Well, he's saying that he's one of those people who can't WORK every working hour. That when he pushes himself in linear, goal-oriented tasks, that it catches up with him eventually. (Hence the "debt" part of what he's trying to say.)
Google calls it 20% time. Time you're supposed to spend on things other than your assigned duties.
There are lots of reasons to do it.
And it pretty much has nothing to do with reducing technical debt. It's a poorly written article that doesn't even explain its terms very well, so it's understandable that you wouldn't understand.
I call that raising one's potential in my comment, and that's not playing: in your own words, that's mastering new skills and trying new techniques.
Besides the minor disagreement on which are the right terms to use, I agree with your conclusion : the article is poorly written, and fails to address the core issue about technical debt.
It does not propose any simple solution, and can be summed up as "do some hacking, play and your technical debt with magically resolve itself" - to which I don't agree.
(The analogy I made with "real life debt" was to insist on the reasons why an undirected approach to technical debt was not the best idea)
It's about something TOTALLY NEW he wants to discuss. And he's borrowing a term we're familiar with, and testing the waters to see if he can use a similar term to describe this new concept.
Your response is so inappropriate, it's like if I responded to your post about technical debt with a rant about how your post didn't really address the problems of our NATIONAL debt, and didn't touch at all on our history of abandoning a gold standard, fiat currency, rentier capitalism, China playing with its currency valuation, and how "In God We Trust" offends atheists.
NATIONAL debt has nothing to do with TECHNICAL debt has nothing to do with HACKING debt.
"and your technical debt with magically resolve itself"
NO. THE ARTICLE DOES NOT MAKE THAT CLAIM AT ALL.
Financial debt exists. Technical debt exist too (especially if you make a living maintaining old code :-). Lack of training exist (skills deteriorate)
Hacking debt ? Sorry, but once again "huh" ?? How is promoting a kind of glorified slacking helpful?
You seem to have a far better understanding of it than I may have, so please describe this "totally new" concept termed "hacking debt", and also provide some proofs or links about the detrimental consequences it might have.
Otherwise, I would like to take this opportunity to present you my new concern of "cinnamon-roll debt": I postulate that not frequently eating cinnamon rolls has bad consequences for a coder. Of course, I won't provide any proof. Also, I'll let people discuss that concept on HN to try and make some sense about it. I'll plug the term with A/B tested SEO words, like "technical debt". If it doesn't work, I'll present a new concept of "magical-rock debt" - about how not having a magical rock leads to coders burning out.
PS- you're right, the article does not directly infers that playtime will solve technical debt. It just says "people become less effective and eventually burn out". However after reading it again, my impression is still that it is presented as if it could be helpful, and as if "hacking debt" was a real problem. IMHO it's not, and it's bad advice.
Initially, I posted a TLDR with a simple analogy, then saw the downvotes and a lack of understanding, so I tried to provide more details to explain why I think the basic concept is wrong, besides the analogy. Yet, in the last 5 minutes I still see 4 downvotes.
Never mind.
I guess casting wild ideas is more recognised than examining how they could be wrong and proposing simpler fixes. There may be a market for lion-repelling magical rocks. I've got one and I've never even been chased by a lion! Also, it prevents burnout, and my productivity has never been higher!
I'm out.
This is a friendly forum for the exchange of ideas, not a peer-reviewed journal.
You're proposing simpler fixes to a completely different problem. And you provided an INACCURATE TL;DR of a seven-sentence article. Hence, the downvotes.
Product development yields things like better vacuum tubes. I whole-heartedly agree with the article's position that companies are foolish to demand that 100% of their developer's efforts are spent on product development. I think any company that tries to be innovative should encourage unstructured development.
Some companies call them hack-a-thons. For one thing, they breed loyalty, camaraderie, and morale among the employees. Look up hack-a-thons, if you have any interest in retaining employees. With your attitude, I'm not so sure that applies to you.