And yet, that worthless fraudulent garbage is one of the few ways to get rich.
The worthless fraudulent garbage is an even a better way to get poor. Which is why there is a financial test to make such investments: “does this person have that kind of money to piss away?”
As Mason said to Dixon, “ya gotta draw the line somewhere”. Percentage of wealth as a measure misses one key aspect: accumulating a million dollars isn’t that hard. You can either work a middle-class job and not piss away every penny as fast it comes in, or you’re so loaded that a million dollars is what you keep in the checking account for emergencies. In the former case, you don’t get $1MM being an idiot at finances. Yeah, that leaves out the gal with $900K, but see first sentence. For the latter, you lose $500K, who cares? You’ll still eat tomorrow.
Of course there are numerous counter-examples. Rap artist M. C. Hammer comes to mind. A rich person can afford a bad investment or two, but not a string of them.
> You can either work a middle-class job and not piss away every penny as fast it comes in
"Middle class", using the conventional definition of 67%-200% of median household income, is about $40k to $110k a year. The median within that range is about $65k. Let's say you pay about 25% in taxes, and manage to save 1/3 of what's left. That's about $16k/year, which means it would take that household an entire lifetime to save up a million dollars.
which means it would take that household an entire lifetime to save up a million dollars.
Well, then, I guess they best not be pissing away what little they have on dodgy ICOs. I mean, perhaps I’m wrong on the math, but you still haven’t convinced me of the case that those making $65K/year should get to dump their retirement money into dodgy investments. Rather, you’ve furthered the case against.
> That's about $16k/year, which means it would take that household an entire lifetime to save up a million dollars.
~23 years if you add $16k a year and compound at 8% (below average S&P return for our lifetimes). If you increase contribution along with pay increases the time to a million will be less, small changes in return % also make a huge difference.
Not exactly overnight, but also completely doable.
The line of thinking here seems to be that, to get to $1M, you probably have learned a lot more than someone making only $50-60k a year. So not only would you have the capital, you'd also have the common sense not to make a poor investment.
People with a million dollars are no better at detecting bad investments than people without. If anything, they're worse because they imagine themselves to be far more sophisticated than they actually are. I've witnessed this time and again.
Frankly I think there's also some sort of "sympathy level" in the law.
If a little old lady living on a fixed income loses all her meager savings to a huckster we feel a lot worse for her than if a Wall Street 1%er with three houses loses all his savings to the same huckster.
Which might not be the fairest or most logical way to legislate, but laws are about feelings as much as anything else.
The worthless fraudulent garbage is an even a better way to get poor. Which is why there is a financial test to make such investments: “does this person have that kind of money to piss away?”