I haven't read the book, but does it really say this?
> He also tells of how he can back out of contracts by inserting a clause “subject to the approval of my partner”, where said partner was actually his cat. That is called “fraud”.
How can you take anyone seriously who does a thing like this?
It is the sort of advice people who will never be in those positions hear and think it must be part of how rich business people operate. It is basic knowledge porn, like Malcolm Gladwell books, but with less sophistry.
From what I've learned about how rich business people operate, they don't even tend to bother with contractual shenanigans like this; if they perceive that they have the upper hand in a situation, they'll just effectively say, "fuck you, I do whatever I want".
> they don't even tend to bother with contractual shenanigans like this; if they perceive that they have the upper hand in a situation, they'll just effectively say, "fuck you, I do whatever I want".
This is how promises with anyone works. It's ultimately about trust and character.
This is basically a restating of how high-level rich people deals work; the contracts might exist, but it's really all down to trust and a handshake. If you do screwy things, you may find nobody willing to deal with you at all, contracts or no.
Bingo. If you really want to screw someone in a deal, you probably can regardless of contract. But, do that enough times and no one will work with you.
Yep, and it helps explain why you can have some rich guy complain about another rich guy who "screwed him over in a deal" for an hour, and then he casually mentions he has to go to lunch with him for a new deal. It's just business.
Malcolm Gladwell at least references actual studies -- there is a lot of hype and "science news reporting" BS in there, but there are at least kernels of ideas.
This is taken out of context, and the author of the blog post should keep reading:
(taken from the same paragraph about the cat)
"I make this absurd statement to illustrate how absurdly easy and simple the game is. So many people make things too difficult and take them too seriously."
The book had actual garbage advice, live repeatedly suggesting to invest in real state. In contrast to the sensible advice on savings and living below your means, this one was simply "become a real state speculator". When the real state bubble burst, probably a handful of its followers were in a position to make bank from it.
In fact, any author who claims to tell how to become rich, but is still not filthy rich, is a scammer. Most of the content in these kind of books could be resumed in one or two pages, but that wouldn't sell.
I also haven’t read the book, but I’ve seen some of his speaking. He tends to make a lot of incredibly oversimplified observations about basic debt instruments, and then acts as if they’re utterly profound insights. If an interviewer ever pushes him a little, he seems to just get defensive and kinda looks as though he doesn’t really know what he’s talking about. He’s certainly given me the impression that he’s just a conman that doesn’t have any more than a one-inch-deep understanding of any of the topics he loves to yap about.
But he is right about Dave Ramsey. Ramsey has a completely irrational perspective on debt, and often gives some very stupid advice on topics relating to it.
To be clear, I think both of them are frauds (though one a lot more than the other).
If you’re being crushed by debt, following Ramsey’s (frankly commonsense) advice would probably be beneficial. If you have any other situation, his advice is going to be harmful to you. Especially compared to the advice you would receive from a real financial advisor, which Ramsey isn’t (though I’m sure a lot of his followers would be surprised to learn that).
I think Ramsey takes it too far, but then I think about his audience. I can gamble and drink alcohol without getting addicted. But for people who are addicted they usually need to completely stop. I see the same thing with those who are not able to manage their spending or debt. They need shock and extreme measures to get back to a good spot.
He's an entertainer with a decently large following. There are worse things he could be telling people to do other than save money and get out of debt.
His entertainment is providing financial advice, which (while I'm sure he follows all the applicable laws) he's not qualified or licensed to provide. He's not necessarily a scammer, and I'm sure his advice is helpful for a lot of people, but he gives everybody the same advice, and for a lot of people it's very bad advice.
Genuinely curious what part you think is 'very bad'? Maybe it's not all optimal, but very bad doesn't seem like what he's pushing. Admittedly it's been a long time since I've listened to him, but I have a couple friends who followed his methods and are in much better financial shape now.
He’s incredibly averse the debt, which is just his ideological stance, and this leads him to provide very bad advice. You’re not that likely to go bankrupt following his advice (it’s not impossible, I’ve seen him advise some very questionable house sales), but you’re much more likely to turn 65 and realise you can’t afford to retire following his advice, than you are following advice from an actually qualified adviser. If you had some extra disposable income today, and some low fixed rate debt, Ramsey would advise you to pay it down, even though almost any other investment would be an obviously better choice.
Providing people financial advice is regulated for a reason. The advice needs to be tailored to the person and their own circumstances. Ramsey never does this, he only has one script. If you happen to be a person who’s going to benefit from his approach (which I’m sure there’s a lot of people who would), then that’s good for you, but whether his advice is good or bad for any particular person is just up to chance.
This is very irresponsible, a very morally dubious way for somebody to make their money, and leads to him providing plenty of just objectively bad advice.
Dave Ramsey's advice is sub-optimal, but he's aimed at people who can't handle money, and is telling them to focus on crushing their debt.
It's not an optimal strategy for people who can handle the abstraction of interest rates, inflation, etc., but if his followers could handle those concepts, and had the impulse control to back it up, they wouldn't be heavily in debt to begin with.
It's reasonable advice for the demographic that needs it, and in that sense it's fine.
The HN tech bro crowd, who knows enough, and has enough cash, to run Christmas Tree option calls, has no business following Ramsey's advice.
IMO contracts are no different than a handshake anymore. They have so much fine print nobody, not even the judges you will spend a fortune arguing in front of, knows what anything means anymore.
It's somewhere in between those extremes. It's true that some things that go into a contract aren't actually valid because they infringe on rights or aren't within the authority of its parties. It's also true that some things are only valid if they're mentioned in the contract, because they might not be a typical part of doing business (e.g. things like fees or handling disagreements in arbitration hearings). It's also true that some things are implicitly in the agreement without being mentioned in the contract.
It's worthwhile to be aware of what's called the Reasonable Person standard. If you own a business it is worthwhile to be somewhat familiar with the corporation law in the jurisdiction the company is incorporated in. And it's always useful to have a lawyer you can ask some questions, if for no other reason than to have some chance of avoiding those expensive (in $$ and time) arguments before a judge. But I'm not a lawyer so don't ask me.
He also encourages people to attend finance seminars and get involved in network marketing.
The audience for most personal finance books are people with absolutely no experience with personal finance. People with no experience read a book, conclude that it is filled with expert advice, and then recommend it to others. You kick this off with things like an Oprah episode and the momentum carries itself.
His podcast was recommended to me by a colleague. I listened to a single episode and realized it's just the ramblings of a guy who made money with zero concrete advise on how to do it yourself. And of course tons of complaints about taxes and regulation.
Every currently rich person has done a million fraud-like-but-maybe-not-actually-fraudulent things like this and that's how they're rich, so it's not completely insane. You definitely don't get rich by staying within the white painted lines. This particular one is more on the insane side of the spectrum... but do you remember that Elon Musk had a large golden parachute contract at PayPal, meaning they had to pay him a lot of money if they let him go, and then he made really stupid decisions so they had to let him go, and give him a lot of money?
That's a pretty broad statement to make, especially with the implication that the only way you can become rich is by basically committing borderline fraud.
If you want to get rich, spend less, save and invest more. Nothing about that is fraudulent, and many would argue you'd have a more fulfilling life in the process.
Marx-dogmatics are stuck in a dumb peasant mentality and think that making a profit is inherently fraudulent, and that everyone else should just break even.
Spending less and investing isn't going to make you rich. It can certainly help, but it's definitely not going to get you rich unless you have a large amount to begin with in saving and investing.
Secondly, any of the "holier-than-thou" wealthy people that primarily just have good jobs seem to overlook the fact that they are enabled by an entire cadre of people stepping on others and committing those grey area border-line frauds. Much like how we overlook the sordid conditions in foreign countries to enjoy cheap (or expensive) products. It's extremely unlikely that there exists a major corporation that isn't exploiting loopholes, maintaining a legal team to skirt regulations, and engaging in practices that are legal but ultimately not beneficial to their customers.
It's not wrong to make a profit, but there's a level that's fair and reasonable and in many cases the profit margin is correlated to the morality of the provider. The willingness to harm others for profit is a necessary component to become rich in all but a very few edge cases.
Price is what you pay, value is what you get. If a contractor has a brand new truck, never hire them. Without fail the best work I have had done was by the businesses with the worst presentation. The shoddiest, felt like a scam, was always by the flashiest companies.
Advertising at its core is a way to create a falsely inflated sense of value to justify a higher price. The primary way to get rich is to prioritize profit over providing a fair value.
Even Doctors are provided with their high salaries only by an artificial limitation of supply and a variety of opaque exploitative practices.
Yeah, that's reasonable. Assuming the game isn't exploitive or loaded with dark patterns and things like that. How often does that happen though?
It's always possible to dig deep enough and find questionable moral things, in this case, it would be about the platform, how customers are reached etc.
But that's far from my point, it's not reasonable to expect someone to avoid all creations derived through profits.
It's that the overwhelming majority, 99.99% of people who become rich are directly engaging in these questionable practices or are very directly supported by those who do.
Even making the video game likely makes you dependant on Microsoft, Apple or Google and the ills of their rise, but I see that as far enough removed that yes the solo developer could be considered reasonably ethical.
But again, how often does it happen?
In the US there are 1.4 million people with a net worth of over 10 million. How many of them were solo developers with a non-exploitive products that didn't sell out to someone who made the product exploitive?
This seems unwarranted. Even if many rich people grifted their way into that position (for whatever definition of 'rich' you prefer) some proportion will have ended up that way through a combination of skills and luck without actually acting immorally.
Is this true though? Leaving aside those with inherited wealth. If you imagine in purely competitive business situation, with poor enforcement of blue collar crime prosecution globally - seems likely the least ethical competitors would win out a supermajority of the time.
The most unethical competitors get investigated and „…find out” eventually. The money-optimal strategy is to only act badly when one can get away with it and stay under the radar. (The sanity-optimal strategy is to always act lawfully.)
It's entirely true because it's easy to prove that any normal decently paid occupation with thrifty savings will result in rich, at least by a normal standard.
If by "rich" you mean "Elon Musk or Gates" then you may have a point.
"It's entirely true because it's easy to prove that any normal decently paid occupation with thrifty savings will result in rich, at least by a normal standard."
The phrase 'normal decently paid' is doing a lot of work here. You absolutely will not 'get rich' on the median wage in almost any developed country, irrespective of your 'thrifty savings'. Given the rising cost of housing, and the increasing inaccessibility of home ownership, anything but an income well in excess of that accessible to a supermajority of people is unlikely to result in housing security, let alone wealth.
Without trying to antagonise, I do think this perspective arises from an ignorance of how much more hackernews tech people earn than is actually 'normal'. For example, here in Ireland the median wage is €45,537. In the US it's $63,795.
With luck, continual employment from graduation, no major health challenges or other unanticipated life events and marriage or long term partnership, it may be possible to one day own a home on these salaries. It's virtually impossible to be 'wealthy' or 'secure' in any usual sense of the word. Given the two recent recessions, and the changes in family composition very few people I know are in these circumstances. Most are renting in precarity.
Again, if the median is $63k, that means half are below that; if you're at the median and you live below the median, you're saving money. 23% live below $35k, so if you make $63k and live like you make $35k, you should be able to save at least $10k a year or more.
Of course, choosing to spend your money on divorces and child support greatly hampers things (and those are choices, even if you feel it's the only reasonable one).
> so if you make $63k and live like you make $35k, you should be able to save at least $10k a year or more.
You're discounting tax. At least in Ireland, as a PAYE worker (employee) your take home would be 32,228. Given rent, food and bills, it is not remotely realistic to assume savings of that level. Still less save for a deposit or a house or apartment, climbing onto the property ladder. Can you live below your means, sure? Will this provide enough capital to meaningfully invest? On its own absolutely not.
It's much harder for me to guesstimate tax and expenses for the US, but I'd assume similar is true.
You're also assuming no children - which is a pretty grim, but realistic assessment given these income levels. At a median income level having children now actively puts you in poverty.
The USA actually has some of the most advantageous tax policy for low-wage earners (and those with children, even more) in the world. And by low-wage earners I mean anywhere from way below the poverty line to ... barely scraping by at $400k a year for some of them?
You start with the Earned Income Tax Credit - which basically takes your 0% federal rate and refunds even more to compensate and overtake social security tax.
Then you have ACA subsidies that eliminate healthcare costs (or greatly reduce it).
And then there's the Child Tax Credit - up to $2k per child. This one isn't refundable so you end up having some room.
All of this is just on the tax form - this does NOT count any of the other assistance available.
The surest way out of poverty in the USA - assuming someone is actively trying their best and not wasting anything, time, talent, treasure - is to be stably married and have some kids.
(All my comments are around the USA of course, I have no experience of Europe or Ireland in particular - but everyone online always assures me that Europe is a paradise compared to the complete hellscape that America is ;) - so I assume y'all doing pretty well. If not, come on over! We have some statue about it.)
I'm genuinely curious - how could having children possibly be a way out of poverty? Unless you're making the assumption that they'll be in an economically better position than you and 'take care of you in your retirement', or similar? 2K per child per year isn't going to approach the cost of raising a child. Which seems to be closer to 20k per year - https://ifstudies.org/blog/the-true-cost-of-raising-a-child
I really don't know what you're suggesting here... We're discussing the possibility of attaining wealth by saving / investing on a median income, and you simply haven't supported the assertion that that's possible or likely with anything you've posted.
As someone actually living on an income in this ball park, I can assure you that tax credits aren't money, they're just less tax debt. And that the concept of having kids on a low income would actually be terrifying.
> I can assure you that tax credits aren't money, they're just less tax debt
But ... they are? Money is fungible; if you owe $1k in taxes and you get given $1k in cash, that's the same as if they just make your tax burden go away.
And it's clearly obvious that it can't cost $20k a year to raise a child, as many families are below that in income ("In 2022, there was a total of 7.4 million families living below the poverty line in the United States.") - if it costs $20k to raise a child, and there are 11.6 million kids in poverty in 2022, then the average poverty family has 1.5 kids, costing $30k a year - but the poverty line is between $23k-27k for a family of 3.5! So the kids cost more than total income, which is patently absurd.
Anyway, the whole point of it is - are you the lowest earner in the country? No? Then someone makes less than you and lives on it. If you mimic them, you will have something to save.
But people don't want to do that. They want to say "woe is me, everything is shit, might as well buy that burger" and continue as a debt-slave to the corporations.
As to the first, the benefits of children are somewhat financial, if you take advantage of them and you'll be too damn busy to spend any money on anything but. But the "stable marriage" part may be way more important.
Sure, I could earn a few million that way. Is it rich? If a house goes for one million, and you have two million, you have the equivalent of two houses. You presumably only want one house, and if you're wise, you don't engage in the kind of thinking that might cause you to spend the rest on a Ferrari or a Rolex, so you have practically unlimited money left over for daily purchases. You're very comfortable. You're also 60 years old. Money rich, time poor.
Still... is it really rich? It's upper middle class. You want for nothing, financially. However, you're going to have to work about 50 times longer to start to get into the big boy's club. The gap between the middle class (even at the very upper end) and the truly rich, at this present time, is beyond human comprehension in that way. See you when you're 3000 years old. People who have that much money did not get there by working.
Again, it depends on what you consider rich to be.
Most people consider rich to be about "twice what I earn/have" and it slides.
I think rich is much better looked at from the time perspective - if your time is yours and not unwillingly sold to others; you're rich. If your time is not your own and you have to sell most of it to live, you're not rich.
And yes, I would put anyone who can comfortably retire before social security kicks in (so, early retirement/FIRE) as at least rich-adjacent.
I know a dude with a 7th grade education who amassed millions via hard work and thrift. Don't think you have to play millionaire games to make millions. Mostly you just need to not overtly waste your income.
Supposing I worked for my whole life I could retire with a few millions. Then I'd be 60, and then eventually dead, having spent my whole life working for the actually rich people (who have 5 orders of magnitude more and didn't work for it) instead of doing things I wanted to do, in order to get them to give me a tiny fraction of their wealth. Is that good?
> He also tells of how he can back out of contracts by inserting a clause “subject to the approval of my partner”, where said partner was actually his cat. That is called “fraud”.
How can you take anyone seriously who does a thing like this?