It Is Not About the Money, Silly, It Is All About the Time - <AUTHOR> http://jacquesmattheij.com/it-is-not-about-the-money-silly-it-is-all-about-the-time <comment><USER2> Some sensible advice here, but also ignoring all debt is not a good idea. I used to have a similarly black-and-white view, but now I realise that debt is simply another trade-off to be considered.

Remember, your life is precious. Don't live your 20s and 30s as an ascetic just so you can retire to a golf course in your 50s. I spend a lot now (but not beyond my means) because these are some of the best years of my life, and I know that there's a very significant probability (not guaranteed, but large) that my earning potential will continue to increase for the next 10 years at least (I'm 28).

I have made an informed, calculated decision to evolve my spending like this. My utility function is simply that $100 is worth more to me now that it will be when I'm 35. Ergo, borrowing (limited) money can be a net utility positive.

<comment><USER3> > I spend a lot now (but not beyond my means) because these are some of the > best years of my life,

I agree with the second part of the statement, but not with the first one. In my life, there is almost nothing that could be further improved by spending more (or a lot of) money on. Currently, my biggest expenses are rent (allows me to live in London and have a very good job) and food (I buy the best, mainly because I believe that bad food will tax my body in ways that will only become apparent in several decades - but I eat home-cooked food as often as possible, so it's quite cheap). Other than that, I spend very little. I enjoy reading (books are cheap, so is internet), good conversation (again quite cheap, no need to spend 100s in bars), nature (parks are free), dance and sports (climbing, running, bodyweight training, skiing and surfing - the last two are a bit more expensive, but you don't need to buy your equipment if you're not doing it that often). If I lived in a smaller town, I would probably have a used car to travel in the countryside. I'm probably really lucky, but I really don't see the appeal of most of the more expensive stuff/experiences.

<comment><USER2> I agree with most of what you say; different people have different tastes though.

Like you I spend most of my money on rent (I also live in London) and food - in the case of rent, probably 50% of that is paying for location. I moved recently to be closer to work, and now I walk to work in 25 minutes rather than spending 45 minutes+ on the tube. This costs me several hundred a month, and it's worth every penny. It gets me back 30-60 minutes a day of time, I get extra exercise, and I get to enjoy being outside in the sun. It has literally made a significant difference to my happiness.

Outside food and rent, the other main expenditure for me is travel - I have friends around the world, and enjoy exploring new places, so I spend a few thousand a year at least on travel. I could certainly cut back some of that by staying at cheaper locations, but that's a trade-off I'm willing to make.

I think the difference between myself and a lot of consumers these days is that I spend primarily on _experiences_ , not _posessions_.

</comment></comment></comment><comment><USER4> I've noticed that people on the poorer side of the spectrum have made peace with the fact that there are (many) circumstances outside of their control that they are simply unable to address. They don't try by buying the rafts of expensive insurances that middle class people often insist on mostly because they simply can't. Its almost a zen thing.

It costs time and money not just to acquire things, but to hold onto them once you have them as well.

<comment><USER5> > rafts of expensive insurances that middle class people often insist on

Could you explain more on what you're referring to when you say insurances?

<comment><USER4> Health insurance for starters. Poor people will likely have a (mostly less than sufficient) government option that they pay little for, hoping that they don't get sick.

Then comes the mandatory insurances of "ownerships". Mortgage insurance to cover loan default, required property insurance for that home, auto insurance (full coverage also required by your lender on a new car) etc.

Fearful insurances like disability insurance to cover the bills if they should become unable to work (wouldn't want to lose all my stuff). Life insurance so the kids have a comfortable life at the level they've become accustom to in the even of death etc.

There may also be liability insurances connected with their line of work.

Middle class people have a lot of insurances that often take a significant portion of their monthly budget.

<comment><USER6> To give a concrete example to artmageddon -

I drive a $450 car so I have the absolute minimum insurance on it required by law. Even after only one year of not paying for full comprehensive, I will save money if it gets stolen or burns to the ground and I walk away. (I do have high third party - so if I hit a Porsche, damage to it and people is covered). I pay $300/year for the car insurance I have.

I currently don't have any kids, so I've opted out of Life Insurance at work, instead getting more money into my bank account. In all honestly my savings account would cover my funeral expenses, so why would I want my family to get $250k in the event of my death? It's not going to make them happier.

I also opted out of the health insurance at work, so I get a bigger paycheck. I'm 32, fit and strong, and I can count on one hand the number of times I've been to a doctor in my life. Obviously this circumstance will change as I get older and have kids, and I'll re-work my approach.

EDIT: I live in Canada - basic health care is more than good enough.

<comment><USER7> Just a counter-point to your no health insurance view. I opted for health insurance while I was a healthy early 20s guy in grad school. $110/month, and 2 months later I needed my gallbladder removed. The surgery would've cost me $15k out of pocket. So with my premiums and copays I ended up paying a total of $2k for the surgery (effectively) and saved about $13k. At that age and employment status (stipend and free school with a research assistant position, but that wasn't much) I would've been fucked. As it was I lost nearly a month of academic progress that I had to make up because of the excruciating pain and isnomnia it induced. As a healthy 20-something male, the savings covered my insurance premiums through the rest of my 20s. And in that time I had other injuries [1] whose treatments (surgery or PT), again, dwarfed the cost of the insurance I continue to carry.

[1] I've had 2 infections since I was 14: food poisoning and an ear infection, every medical thing I've needed is the result of injury or organs gone mad. You just can't predict these things, a good immune system does not prevent you from needing medical care.

<comment><USER8> I paid cash to have my gall bladder removed. It as 1500 Euros. I really don't know why the same procedure would cost 10x as much where you live (assuming a simplistic conversion rate, which is not correct, so maybe 8x) compared to where I live. And nowadays that's not even an option any more because we all have mandatory health insurance with deductibles that are mostly designed to keep you paying for everything unless something major happens.

<comment><USER7> This was in the US. It's not cheap here for medical care, and there's really nothing that we get that's an improvement to justify the costs compared to the EU or Canada or, really, most other developed countries.

Also, this was 8 years ago. The numbers stuck with me because I was trying to explain why, a couple years later, I was paying out of pocket from my (at the time) meager salary for health insurance to my coworkers. They had grecy's attitude. And then one of the idiots broke his ankle jumping down some stairs. His parents bailed him out financially for that cost, which was small in comparison, and he failed to learn the lesson: Debt for unexpected medical costs is not worth the short term savings of skippig health insurance (in the US).

<comment><USER8> The reason I paid cash was very simple: because of a nasty little slip-up during my immigration into Canada I ended up un-insured (you have three months to apply for OHIP but being in the heat of a launching start-up I totally missed out of it). Many years later, on a short trip to NL I got hit with the gall bladder issue and I was rather pleasantly surprised that it was as cheap as it was.

<comment><USER7> An infographic [1] comparing the cost across states. Those high cost ones seem absurd to me. But I've read my EOBs on every surgery I've had. One hospital charged something like $200-300 for the stitches (maybe 20 stitches used) . Not stitching, the stitches. The personnel costs were listed separately. US medical costs are broken.

[1] [http://www.bernardhealth.com/woofstreetjournal/bid/197140/Ga...](http://www.bernardhealth.com/woofstreetjournal/bid/197140/Gallbladder- removal-How-much-does-it-cost)

<comment><USER8> That's a terrible situation.

Thanks for that graph, I had no idea it was this bad.

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER9> _Saving is so much easier than earning, and it's a habit that once built will pay you back for the rest of your life._

There's a weird cultural meme that's convinced the middle class that the road to wealth is saving. The road to wealth is earning. This is just kind of an obvious thing, but I guess there are benefits to convincing people who will never earn enough to be wealthy that there are attainable ways to go about it. I'll tell you this much, if buying an iPad makes you broke, then _not_ buying that iPad sure ain't gonna' make you rich.

This meme is just kind of annoying as it relates to the middle class, but it's downright dangerous when applied to the poor. It's useless to apply ideals of thrift to people making minimum wage, a level of earning at which no amount of saving can cover even predictable periodic expenses.

<comment><USER10> Investing $4000/month (which is what I do on a salary barely over $100k while living by myself in a 1 bedroom in the East Village, NYC and going out for every meal) at 3% will get you $1 million in 17 years. That means you'll be a millionaire by the time you're 40 if you start doing this right after graduating college.

3% happens to be the rate that stocks have historically appreciated above inflation, so by doing this you'll be a millionaire in _today 's_ money.

Don't believe me? Try it: [http://www.bankrate.com/calculators/savings/simple- savings-c...](http://www.bankrate.com/calculators/savings/simple-savings- calculator.aspx)

EDIT: For the poor, there are many structural problems that lead to a cycle of poverty, but it is possible to escape even that with very good money management. I dated a girl whose parents came to America on a raft, with a fifth-grade education. They slept outside the 7/11 where they worked at first (didn't have to spend any money on rent), and ended up owning a large portion of their town by the time they were in their 50s.

In short, don't knock thrift. Yes, earning more is always great, but savings combined with compound interest is magical.

<comment><USER11> $48,000 a year in investment is $18,000 more than the median _total_ income for an individual in the United States.

What you are able to do is exactly what the vast majority of Americans are unable to do.

<comment><USER10> Sure, but the article specifically mentions couples making $211k/year combined ($160k euros) spending it all. People making $30k/year obviously can't save as much as me, but they could save _something_. I saved money even when I was in college, working only in the summers and paying for food/housing myself. I think I made like $10k/summer. Of course, my lifestyle was much less extravagant than it is now - I never ate out and lived with many roommates.

</comment></comment></comment></comment><comment><USER6> During my 2 year drive from Alaska to Argentina, it took almost the entire trip for me to learn this lesson. At first in Mexico (and Central America in general) I genuinely thought people were just lazy and I would think "Why don't you get a job". The years rolled on, my Spanish improved, and I had many great conversations about this topic.

Finally, a great friend in Argentina explained the situation to me. It's all about debt. In the developed world, when we want something shiny (say, an iPhone), we walk into the shop, sign a piece of paper and are showing it off to our friends 20 minutes later at the bar. It's not a completely conscious thought that we'll be paying it off for the next 24-48 months while we mindlessly go to work everyday.

In the developing or undeveloped world, nobody can get credit, so when you want an iPhone, you have to save up for it and buy it outright. So you get a solid job, and start saving the ~$700 for an iPhone. Who in their right mind is going to continue going to work day in, day out for 6-12 months just to buy an iPhone that will be obsolete in a year anyway?

More realistically, after a week or three, you quit your job, and hang out with your friends & family, having celebrations and generally enjoying your time.

And so it is that "poor" people have so much more time to enjoy their lives, rather than going to work to pay off things they never needed in the first place.

<comment><USER12> You actually know someone who bought a phone on credit?

<comment><USER6> Almost everyone you know is buying their phone on credit.

You put $0, or $99 or $199 down, then you're in a 2 or 3 year contract.

Stop paying that contract and see what happens to your phone (Hint: They take it off you, your credit score goes to rubbish)

You don't own the phone, you're paying it off over many years.

To buy such a phone not on credit, you'll pay something like ~$700 up front, and it's yours for life.

</comment></comment></comment><comment><USER13> I'm getting tired of all this "live debt free!" nonsense. There's good debt and bad debt, and people like this should learn the difference before giving financial advice.

<comment><USER14> OK, well look around. Do you know a lot of people (is it possibly even most of the people you know) who have 2 or more car loans, and at least one home loan?

That's the "norm". That's what "everyone" does (everyone who is in a first world country and has a decent job).

Is that somehow "smart debt"? Really? What's so smart about it?

It is smart for whomever loaned that money out ... they get back free money paid consistently over the years. How is it smart, in 90% of the cases, for the borrowers?

Our culture tends not to see this in the same way fish don't see water.

<comment><USER15> > Is that somehow "smart debt"? Really? What's so smart about it?

Regarding a mortgage and 2 car loans, I'd like to offer a defense of why it's smart / good debt.

The primary reason that your mortgage is considered "good debt" is because the asset you purchase with that debt (your house) will typically appreciate faster than the interest you pay. I'm not including black swan events like the 2008 crisis. When you eventually sell, you'll be in the black.

Regarding car loans, the only type of "smart" car loan is 0% financing. A 0% loan lets you keep your money in your pocket for longer (and in that time, you can invest it however you see fit). 0% loans can be found depending on when you see the dealer. End of the month? Quota wasn't reached yet? Perfect time to negotiate.

I'm certain jaquesm's point is that lots of people get in over their head with their purchases, especially large purchases like homes and vehicles. However, DontBeADick's point has some validity: Taking on debt can allow you to realize further gains than you would have otherwise seen (basic leverage).

<comment><USER16> "The primary reason that your mortgage is considered "good debt" is because the asset you purchase with that debt (your house) will typically appreciate faster than the interest you pay."

Any money manager will tell you that what you just said is false. Excepting a few cities, when you look at the data and adjust for inflation, owning a house is not a particularly good investment ( [http://files.foreclosureradar.com/images/foreclosuretruth/Hi...](http://files.foreclosureradar.com/images/foreclosuretruth/History- of-home-values.gif) ). Add in that the average home loan lasts about 6ish years before folks sell/refi, the fact that interest/fees are front-loaded into the first 5 years of the loan, and that avg. annual maintenance on a house (NOT improvements) tend to average about 1% of the value of the home per year, it gets worse.

What it CAN be (if you're disciplined and lucky) is leverage and liquidity. Example: I have my house paid off. I get a mortgage on it, essentially getting a loan at 4% for $700k. Now I have $700k that I can make work for me-- a worthwhile idea if I can find a way to make more than 4% on that $700k via other investments (which are not remotely risk-free, but can pay off). Of course, what most people do when they re-fi their house is self-indulgent stuff-- buying a vacation home, a boat, home improvements that don't pay for themselves, etc.

<comment><USER17> It is fair to count maintenance as a cost but it is also fair to count rent you don't have to pay as a savings.

Compare (+equity -mortgage -maintenance -taxes) to (-rent)

</comment></comment></comment></comment></comment><comment><USER18> There can be totally valid reasons for not getting rid of your mortgage even if you have the opportunity - if you have something better to do with the money. If you are paying 3.5% on your mortgage but you can invest somewhere with a return greater than 3.5% after tax, why would you pay down your mortgage?

<comment><USER19> Dave Ramsey, who, for lack of a better term, one might describe as a "personal finance turn-around guru and radio personality", poses the question you ask in a different way. I paraphrase: "If you owned your house outright, would you go out and get a mortgage on it so that you could invest in the stock market?".

Financial management is about much more than maximizing returns. It's also about managing risk. For most people who have assets that they will depend on in the future, managing risk grows in importance as they grow in age. Taking on debt (a mortgage) in order to make speculative investments is a high-risk endeavor.

<comment><USER18> I didn't mention anything about the stock market. I said _if you can invest somewhere with a return greater than 3.5% after tax_.

Implicit in that was that the investment is risk-free i.e. it's a government bond or something. But it could be a risky investment, if the risk-return trade-off is high enough.

If I had the opportunity to invest at a 10% rate of return with a stdev of 5% then absolutely, I'd remortgage my house at 4% to do that!

<comment><USER20> 3.5% is not risk free. with interest rates this low, that kind of investment cannot be offered risk free. government bonds that have such roi are not going to be safe either.

<comment><USER18> Yes, that is why the sentence begins with the word "if".

</comment></comment></comment></comment></comment><comment><USER21> For all the people who are saying "there is good debt and bad debt" and stuff about not paying off your mortgage early: what you say makes mathematical sense, but there is also something to be said for achieving a certain level of simplicity in ones arrangements.

For example, I paid off my student loans before my car and my credit cards, way back when I had my own brush with debt servitude. The student loans were the lowest interest of the bunch, but they were also the smallest by that point. I would have spent less overall by paying off the credit card first, but I was able to pay off the student loan immediately. Eliminating it completely helped me on an emotional level stay engaged in my debt reduction. A mile marker, an "easy win".

Most people don't have the patience or willpower to work their finances in the most optimal way. Borrowing at X percent to invest at X+Y percent makes no sense for people who have difficulty remembering to pay bills on time; the late fees will destroy them. And the solution is not "just pay the bills on time", because that's already supposed to be done.

Better to live life understanding what you're capable of. I freelance because I know I'm not capable of getting into an office at 8am for more than three days in a row (actually, it's any set time), and most employers would prefer you to do it 365 days in a row. We already tried "get me up earlier" and that didn't work. Time for new solutions to the problem.

<comment><USER22> > _A mile marker, an "easy win"._

It's often called the snowball method, and it works very well for some people.

</comment></comment><comment><USER23> Have you read Early Retirement Extreme?

[http://earlyretirementextreme.com/](http://earlyretirementextreme.com/)

Very similar philosophy.

<comment><USER24> Also Mr. Money Mustache: [http://www.mrmoneymustache.com/2013/02/22/getting- rich-from-...](http://www.mrmoneymustache.com/2013/02/22/getting-rich-from- zero-to-hero-in-one-blog-post/)

He's a software engineer from Canada that never made more than $140 between him and his wife, and they happily retired when he was 30.

</comment></comment><comment><USER25> I run into this _all_ the time as I bootstrap my company. I have a deep temptation to try to do everything myself. And, a lot of times, I will do so. But, I have to keep reminding myself that there's way more value in outsourcing things. I have enough extra capital to do so, so there's no reason not to. But, it's a mental challenge to allow myself to drain the bank account, as I instead feel comfortable spending enormous time tinkering with things on the side. Trying to do all the code myself only takes more time. And time is _more than money_ in this business.

</comment><comment><USER26> A guy was blogging about it a while back :)

[http://www.forumromanum.org/literature/seneca_younger/brev_e...](http://www.forumromanum.org/literature/seneca_younger/brev_e.html)

</comment><comment><USER27> One things I don't see mentioned is the use of a mortgage as kind of a forced savings plan. For a bunch of reasons, it is really hard for people to plan/save for the future. That's why there is thousands of years of parables and social convention exhorting people to save and not be in debt (i.e. if it was easy to do, everyone would do it). Buying a larger-than-strictly-necessary house with a mortgage is a way to start applying current money to a need in the future. By making a mortgage payment, they aren't otherwise spending that money on more frivolous items. In 30 years time they'll at least have something tangible, instead of fleeting memories of vacations. Whether that trade of as an individual is worth it is debatable, but on a societal level, it probably is.

I think there is a similar, more short-term story with IRS refunds. People could have their paycheck deductions arranged so that their "refund" was nothing. But if it comes out "unvoluntarily", then they are excited to get it back in a lump sum, even if this is the mathematically sub-optimal solution.

<comment><USER6> By the time you pay off the mortgage you will have paid 3-4 times the value of the property because of the interest. So on a $400k house you will have put $1.2mil - $1.6mil into the savings account, but you'll only have a ~$500k property to show for it (IF the house appreciates, which it hopefully does, fingers crossed). That's a seriously inefficient way to save.

<comment><USER22> FUD. The number is less than 2x, not 3-4x.

Loan amount: $500,000

Interest rate: 4.5%

Total paid: $912,033.56

[http://www.bankrate.com/calculators/managing-debt/annual- per...](http://www.bankrate.com/calculators/managing-debt/annual-percentage- rate-calculator.aspx)

You're forgetting two other things:

1.) A portion of interest paid is tax-deductible (rent is not).

2.) $1 today is not worth $1 30 years from now - your payment stays constant for 30 years, but your dollars gain more buying power.

<comment><USER8> You're missing the point that you are _also_ paying the principal.

He didn't say 'extra' just paying 3 to 4 times. And that 4.5% can be improved upon but only if you go variable rate, if you lock it down for longer it can get quite a bit higher (or if you are considered a higher risk client, such as someone who is self employed).

<comment><USER27> >You're missing the point that you are also paying the principal.

Just so everyone is on the same page. The original 30 year, $500k loan that Domenic_S is proposing, at 4.5% interest has a monthly payment of $2533.43. After 360 of those payments (30 years * 12 months per year), all the principal and interest will have been paid off.

360 * $2533.43 = $912034

$912034 / $500000 = 1.82

</comment></comment></comment></comment></comment><comment><USER28> "Maybe it is because I don't allow any advertising at all into my life..." ...How does he manage this? Advertising and marketing have become a major, major, nearly pathological personal issue for me, to such an extent that I sometimes fantasize, on the train on the way to work, for example, about the ability to temporarily turn off my ability to read.

<comment><USER8> No TV, no radio, a pretty heavy assortment of ad blockers for my browsers and I refuse to visit people that won't switch off their TV when they have guests or I leave if they don't. Yes, that's rude. No, I don't care. If TV is more interesting than real life people then the real life people have the option to go elsewhere.

<comment><USER29> Out of curiosity, do you not watch TV series or movies (on a monitor), or is it just cable TV that you don't watch? What about popular music, news, video games and other cultural expressions that all subtly promote materialism?

<comment><USER8> Movies from the net, popular music: what my friends recommend + a collection I built up over a lifetime of buying CDs and LPs, news: nu.nl (no ads there with adblock+ghostery+some tweaks), don't play video games and I don't know what other cultural expressions that promote materialism would be, specifics would help here. Product placement in movies is hard to avoid but super easy to spot, I make a point of _not_ buying anything advertised in that way if I come across it.

</comment></comment></comment></comment><comment><USER30> I'm tired of seeing "people who are in debt waste their money" or "people who are in debt live beyond their means" as the default explanation for indebtedness.

I'm in debt. I have debt for a car, furniture, and medical expenses. (despite the fact that most of my furniture was acquired for little cost, and insurance covers most of my medical expenses) I also have a new MacBook Pro (I'm a developer), much to the chagrin of my baby boomer parents, who also think I should drink less Starbucks coffee. There's not a lot of understanding amongst the older generation that rent is high, food is expensive, and that's where most of the money goes, which makes it hard to pay off the debts. Starbucks represents about 1% of my income, the MacBook will be under 2% of my income over the 3 years I'll probably have it, and I'll make back probably 40% of that when I sell it.

<comment><USER31> Huh. Starbuck habit of $5/day (conservative?) over a 200-day work year amounts to $1000. Have to spend $100,000 to make that just 1%.

<comment><USER30> 1% of income not 1% of spending. Also I spend considerably less than $5/day at Starbucks, way less.

</comment></comment></comment><comment><USER32> One thing I heard once that has stuck with me: When you earn a dollar, you pay 30-40% tax on it, but when you save a dollar, you keep the whole thing. It pays to push on both the revenue side and the expense side, but one pro of putting effort into expenses is you keep 100% of the reward.

</comment><comment><USER33> A lot of talk about mortgages here. I think as long as you do the math and let that guide your decisions, you'll come out ahead.

Take this year, for example. I happen to have a mortgage that I could pay off completely later this year without penalties. I've been saving to do just that, and parking the balance in the market until the day comes to pull the trigger. But what's this? I'm up 11.6% on the year thus far. It's hard to come up with an argument for not letting it ride a few more months and watching to see what happens.

Granted, there's always risk in the market, and using the fund today would net me a cool 4% risk free. But still...

<comment><USER34> Paying down a mortgage is probably the safest, guaranteed bet. Not everyone can get lucky on stocks or bear the risk of being unlucky. If there was an available investment opportunity with a higher risk-adjusted rate of return than my mortgage interest rate, I wouldn't want to pay down my mortgage either.

If I got all the money back I lost gambling on index funds and other "low risk" investments, I'd probably be able to pay mine off today.

EDIT: guaranteed -> risk-adjusted

</comment></comment><comment><USER35> "When I look around me I see people making endless purchases of stuff they don't actually need [...] I don't understand any of it."

Oh really, you don't? Then you should do some reading on signaling[[http://wiki.lesswrong.com/wiki/Signaling](http://wiki.lesswrong.com/wiki/Signaling)] and evolutionary psychology.

Humanity is driven by sexual pressure, and a big factor in that is social status. Most of the time people don't make purchases with their neocortex, but rather with their "reptilian", so analysis about their lives are out of the question.

</comment><comment><USER36> "Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and six pence, result misery." Charles Dickens, in "David Copperfield", published in 1850.

The notion of living within your means is not a new one. It's something that ought to be taught all the way through school. It's that important.

</comment><comment><USER37> If you pay off mortgage you need some plan for the extra money every month. If you save and invest it that is one thing, but if you just spend more freely (waste it), you are not better off. Economically, the best way is to not buy too much house, and invest all extra money into equities (index funds) over 20-30 years. If there is no extra money to invest, then you have bought too much house.

<comment><USER38> This is the best advice I've seen in this thread. A great thing about having a mortgage for many people is the forced savings of paying down the principal, but you want to maximize _that_ virtue of home ownership by not over-buying - which brings with it proportionally higher taxes, utility costs, maintenance costs. Buy the smallest cheapest house that doesn't suck, and make sure you have auto-invest transfers to a brokerage account set up to get that excess out of your grubby paws. Mostly you'll just spend it on crap. If you _do_ want something important (e.g. a car), you can buy it cash, but it's painful to pull a big chunk money out. That's what you want.

</comment></comment><comment><USER39> > someone explained to me in a very serious tone of voice that getting rid of > your mortgage is stupid because it is a deductible, better to wait with > paying it off when you sell the house in 25 years

All else being equal, if you can deduct that from your taxes and spend the money on something else - like, say, index funds - you're going to be better off financially, no?

<comment><USER8> Index funds do not have a guaranteed rate of return but mortgages do have a guaranteed rate of expense.

<comment><USER40> Was just thinking the same thing. Keeping the mortgage and investing on index funds is the same thing as "leveraging up" your investments. AKA, it's the same as saying "let's borrow 1k from the bank at 3.5% and put it into the SP500".

<comment><USER41> Taking the mortgage was the thing that leveraged you to begin with. Investing in the market rather than paying it off at an advanced rate merely serves to not further reduce your leverage.

<comment><USER8> You have to consider the rent-vs-buy situation of that particular market in order to really evaluate the decision of whether or not taking a mortgage is the right thing to do.

<comment><USER38> Bingo. For my recent move I made a spreadsheet to calculate the financial impact of rent vs. buy. I had to guess at a lot of factors __, but in the end it was a no brainer. Do the calculation!

 __Cost to Buy: estimated lost investment returns on down payment (after taxes), estimated lost returns on monthly payment (cumulative), financing costs after tax deduction, real-estate taxes after deduction, insurance, HOA fees, utilities, maintenance, estimated increase in value, cost to sell. Compare this against rent and utilities over the same time span, factoring in likely increases in both rent and utilities.

<comment><USER8> The utilities will be on both sides of that example so you don't need to factor them in until you start improving a property that you've bought with insulation and such.

<comment><USER27> >The utilities will be on both sides of that example

In a "perfectly efficient" economic world it would seem almost all of those categories like taxes, insurance, mortgage interest, and maintenance are really on both side of the equation. The landlord will still have to pay taxes, etc., and pass them along to his renters. In essence, buying a house seems like it would be a getting rid of the middle man situation in the cases where you don't need the special advantages of short term usage that renting presents. Buying a house would just be a special situation of becoming a landlord and renting to yourself.

So I'm wondering what specific instances there are where renting makes more long term sense than buying. I can think of a couple:

\- The unsophisticated landlord. A little old widow or someone who has inherited a rental property, and isn't charging the market rate. Is there a good way to identify these people, and get a cut of the increase in rent that they could be getting? Maybe they don't know how to advertise or evaluate market comparables? Or is there a way to identify them and get a commission for sending savy renters their way (saving the renters money)?

\- Rent Control. I'm not sure how this works in practice (or in theory for that matter). I'd think that this would reduce the availability of rental units, driving up the cost eventually. If you were renting at the onset of rent control, you got lucky, but for someone newly looking for a place, you maybe don't get the benefit?

\- Property tax ploys. In some jurisdictions, I'm under the impression that property taxes aren't adjusted to the current market prices (or there is a large time lag). Therefore those property owners have a tax advantage not available to new entrants to the market, so they can afford to compete on rents. The business opportunity here would seem to be identifying people in this situation, and convincing them to move to lower cost location and renting out their current homes.

What other market inefficiencies are there which would tip the scales toward renting? Is there a business opportunity in allowing people to rent houses that private parties want to sell? What I mean is a service, where a renter goes out and finds any house for sale on the market they'd like to rent, then I'd step in and arrange the financing, the property management, etc.. They'd pay monthly rent and wouldn't have the burden of home ownership, but they would have housing options that wouldn't normally be available. Are there already companies that do this?

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER41> The author mixes the notions of debt and over-consumption. These aren't even close to being the same thing. There are very valid and financially beneficial reasons to take on debt.</comment>


Show HN: Submit your ideas for improving HN - <AUTHOR> http://hnwishlist.com/ <comment><USER2> [http://hnwishlist.com/posts/54520ba4-f32e-473a-8590-365e893f...](http://hnwishlist.com/posts/54520ba4-f32e-473a-8590-365e893fe7f7)

("Implement a real name policy")

Seriously? Why does anyone think this is a good idea? Can't we just stomp this one out for good?

I really miss noms de guerre. It saddens me that we moved away from handles and pseudoanonymity being a default.

Says the guy using his real name.

<comment><USER3> I think Hacker News' name policy is just about right. Its public enough that we don't have things going on like 4chan, but its not public to the point people are afraid to comment their opinions.

<comment><USER4> > Hacker News' name policy..

Did I miss something? I can't find any username policy in HN's guidelines.

<comment><USER5> Well, it _has_ usernames. That's a policy in and of itself!

The policy, then, is completely implicit: you can have any valid username which may or may not reflect your own name.

Oh, and you can't change them after the fact. As far as I know. That would be a nice feature...

</comment></comment></comment></comment><comment><USER6> The greatest opportunity for improving HN lies with _us_ , not with the site.

Here's a good place to start:

<http://edweissman.com/how-to-participate-in-hacker-news>

<comment><USER7> That's quite a statement. On a scale from "terrible" to "ideal", the discussion on HN is a lot, lot closer to ideal than the UI/experience is:

UNKNOWN OR EXPIRED LINK

C'mon, this is 2013... paging dynamic results shouldn't be an issue.

What makes HN great _does_ lie with us, but I strongly disagree that it's also the _greatest opportunity for improvement_.

<comment><USER8> Maybe you weren't around awhile so you don't know the backstory. Link expiration is partly because the servers back then wasn't able to keep up with datascraping, for example when we made the only useable search engine for a few years.

</comment></comment></comment><comment><USER9> Nice idea. A couple of bugs I noticed while poking around on the site:

The sign in box seems to break Firefox's ability to save the username and password.

When signed in, the "Change password", "My Account", and "Sign out" buttons have three different clashing visual styles.

Please consider adding downvotes; for instance, I'd like to downvote ideas like [http://hnwishlist.com/posts/ae15555a-f3c1-43f3-8a80-cef2a22e...](http://hnwishlist.com/posts/ae15555a-f3c1-43f3-8a80-cef2a22e8dad) or [http://hnwishlist.com/posts/54520ba4-f32e-473a-8590-365e893f...](http://hnwishlist.com/posts/54520ba4-f32e-473a-8590-365e893fe7f7)

Also, a little more far-fetched: if you don't mind doing a bit of page- scraping, you might consider letting people link hnwishlist accounts to their HN account. Just have a profile field for an HN account, and let people prove their ownership of an account by putting something like "hnwishlist username: $NAME" in their profile temporarily. Then you could do things like offering upvotes and downvotes using the same karma thresholds as HN.

<comment><AUTHOR> Thanks for the feedback! And until I implement downvotes, maybe you could add quick comments to explain why you think those are bad ideas?

</comment></comment><comment><USER10> Mobile friendly site. I can never view this site while on my cell phone without having to pinch zoom.

<comment><USER11> Well, I often zoom it on the desktop computers too (depending on OS/Browser settings). :)

It could be like killing two birds with one stone actually, because making it mobile friendly quite likely would make it friendlier for non-mobile uses too.

</comment></comment><comment><USER12> I don't have an account there, but it's worth pointing out that alternative sites like <https://lobste.rs> do exist.

</comment><comment><USER13> Is there any interest in a 'RES' styled enhancement suite for HN? I'd like to think that many of these (and other previously proposed) suggestions/wish lists, someone has already created something to deal with the issues on a client side level rather than trying to get PG to try and change something that works good enough for him.

</comment><comment><USER12> This is all fantasy. PG runs this in his spare time off a single server. Every feature I saw on the list has viable workarounds. Yes, it'd be nice if they were supported out of the box. But I don't think the lack of native features is negatively impacting the _content_ of HN, which is the most important part.

So what's the argument of the site? "Hey PG, we know you're busy funding startups and stuff, but we're mildly inconvenienced by some UX decisions you've made with that experimental site you run on the side, and were hoping that you could take the time to implement these seemingly-minor features that've been discussed on HN for years. In exchange our happiness while using the site will be somewhat increased, and we will instead whine about HN's lack of modern CSS and Twitter Bootstrappiness and what have you."?

<comment><USER14> Yes, PG would have to do all of this himself, because there's no way a hundred developers would leap at the chance to contribute to the HN source and make fellow developers happy.

<comment><USER8> You actually described the reality very well despite your condescending sarcastic tone.

<comment><USER15> I would leap at the chance to contribute freely to the HN site to make fellow developers happy, yes.

</comment></comment></comment></comment><comment><USER16> Nice implementation of a suggestion/voting site.

My suggestion is singular: Let posts be tagged for startups, and bootstrapping, so I can filter everything else out.

I'm happy to geek on my own time but what I come here is for startup content and less interesting/novelty stuff.

<comment><USER17> Tagging has been requested here multiple times, is controversial, and has never been implemented.

I, for one, am very much in favor of it. I'd love to be able to filter out topics I don't find interesting. It would also effectively address a lot of griping about supposedly off-topic submissions.

<comment><USER16> I wonder what is so controversial

</comment></comment></comment><comment><USER18> I really like the fact that your site seems to work well even with my reduced window width.

If you're looking to seed your site with other ideas there are many existing add-ons and clients and etc.

Searching Github for ["hacker news"] returns something like 700 hits. Obviously, most of those are not relevant, but different searches for ["hacker news" client] or ["hacker news" extensions] return over 100 projects where people have implemented features that they feel improve HN.

The Chrome webstore, and the Firefox add-ons page, also have many projects that people feel improve HN.

There's also the userscripts site, and userstyles site, also having many changes to HN.

</comment><comment><USER19> Love the positive thinking. The full screen comment feature alone allows for such a better experience when getting into discussion. Looking forward to a lot of great ideas coming out of this!

</comment><comment><USER20> There _is_ a feature requests link at the bottom of the page...

</comment><comment><USER21> You know what? Improving HN is a waste of time. Why can't we just migrate to a better link aggregator, such as Reddit? It would basically fix everything (including design, mobile friendliness, lack of good apps, lack of API, etc), at no cost.

I'm sure it would be easier to convince Reddit to let subreddits behave like HN than trying to keep HN up to date with the modern world.

Just my two cents.

<comment><USER12> Having PG as a commenter, mod, and admin is a tremendous asset. HN also benefits from the close ties to YC in general--it'd be a bit tricky to tell all the YC folks that they need to post not on news.ycombinator.com but over at reddit.com/r/therealhackernews or whatever.

<comment><USER2> HN doesn't benefit from close ties to YC. YC benefits from close ties to HN.

YC folks will post to whatever is considered the de rigeur nerd/startup news site, which over the last couple of years has become HN - having migrated from reddit (and slashdot, before).

There will be another one, in due time.

</comment></comment></comment><comment><USER12> >I use hnnotify, which works really well but relies on scraping. I'd love to see official functionality that works pretty much identically to hnnotify.

If it's working "really well", why do you care about the fact that its implementation is a kludge? It seems like we already have a good-enough solution.

<comment><AUTHOR> Maybe at some point whoever is behind hnnotify will decide they don't want to pay a huge Sendgrid/Mailgun/whatever bill anymore and shut it down.

There's also the simple problem of discoverability. I never knew about hnnotify until now, since it's not part of the main site.

</comment></comment><comment><USER22> I'm sure most people will dismiss this with "just use email," but I'd love to have an inbox where people could message me. In situations where a comment thread is better suited for a one on one convo, it'd be great. Also a nice way to keep your email private unless necessary.

</comment><comment><USER23> I'd like to see, if not both the up votes and down votes of a particular comment, a score of how "diverging" the ups and downs are. I think it would be very interesting to see when a particular comment is "divisive", (borrowing a common political buzzword)

</comment><comment><USER24> If there will ever come a day when I can ditch the Chrome's HN+ plugin to make HN look good, it will probably be with that. So I'm all for it. Great idea.

</comment><comment><USER25> Sacha you are a beast! You're always putting our new projects. I'm starting to notice your designs even before I see your signature too.

<comment><AUTHOR> Thank you, that's quite a compliment!

</comment></comment><comment><USER26> #1 Following users after liking a user's post or comment. (not publicly)

</comment><comment><USER27> sub HN, like subredit.</comment>


WeWork's 17th employee: I was not offered options - <AUTHOR> https://twitter.com/tristajaye/status/1162471350851817472 <comment><USER2> So she did what every HN thread on the matter says, with good reason : focus on your actual job and salary, not on equity that may or may not have some value some day.

Dont get me wrong it appears the reason she ended up with none is not ok, but would that thread have been made if wework had ended up being one of those "failed" startup and those equities never gain any value?

Would she have preferred to get equity but a lower salary (either at that moment, or on further yearly negotiation) if wework had ultimately failed? Or if like here she left long before she could use it?

Don't think about what could have been with such things, equity as a lowly employee at a tech startup is very much like playing the lottery. If you're not directly invested in it such prefer the hard cash of your salary and don't let survivor bias make you regret that one time things could have been.

<comment><USER3> If you are joining a startup, you should be there to get equity. This is the main financial reason to join a startup. If you prefer cash, join a established company.

</comment></comment><comment><USER4> It's very common for young people to not understand financial matters like options grants. That doesn't mean it's okay to benefit from their ignorance, especially as the company is now making a large number of people very wealthy.

IMO it's a matter of doing the decent thing over the legal thing. Certainly if I was making a zillion bucks like the boss of WeWork I would find a way to pay the early employees who missed out.

<comment><USER5> I think it's common for young people to not understand: your employer is not on your side.

You are making a legal contract which your employer is trying to extract a maximum amount of profit from, while passing on risk, and has more experience and understanding of how to negotiate to that effect.

<comment><USER6> > your employer is not on your side

Maybe that's true for most venture-funding backed startups, but it's a bit of an unfair generalisation. There are plenty of employers out there that don't want to suck their employees dry. Some companies have a more long term vision, and the easiest way to retain employees for more than a few years is to not exploit them.

<comment><USER7> I agree that it's a somewhat unfair generalization that paints a harsh picture. The core point of the argument still holds though, I think. A cynical response might be to say that the difference is the employer is accounting for longer-term replacement hiring/training costs, rather than short term value extraction. The optimization has new parameters but the structure of the relationship is still fundamentally transactional. I don't really think that's how things generally run, though.

Both parties should want a place that's enjoyable to work over the long term, yet sometimes the company will have to make hard decisions. Priorities slip or people are straight-up unable to avoid, say, laying off half the staff. Framing and context matter, as always. "Your employer is not on your side" is hopefully not a statement about the day-to-day interactions with your boss, or even a statement about company values, but it can serve as a reminder that there's always a line somewhere, and, intent aside, your best interests may simply fall on the wrong side.

</comment></comment></comment></comment><comment><USER8> Someone please explain this to me: You apply for a job, you accept the job, and you work to perform your duties as is expected of you. Options are a perk that some companies offer. How is it acceptable in any way to believe you are owed something more than what was agreed upon? Personally I'm getting really tired of reading stuff like this where people see what others have and immediately feel they are owed the same or more.

<comment><USER9> I think it's the contrast between what she got vs what others got. The initial terms of employment don't have anything to do with it.

At some point wework decides to grant options to some of their 120 employees -- basically a form of bonus. From her perspective, she's been working just as hard, productively and creatively as many other people who were granted the bonus, and had been there longer than most.

The terms of the initial employment offer aren't really relevant since it sounds like various other people who weren't guaranteed options nevertheless received them (people couldn't have been guaranteed options under a plan that didn't exist when they hired).

<comment><USER8> Agreed. However, the company had the right to give or not. To assume you personally are owed something because someone else has it is a fairly new and large cultural issue within tech. You don't see this coming out of any other sector. It's like my children saying that they are owed my money in their inheritance. It's my money, I can choose what to do with it. Within bounds, anyone has the right to disagree with their employer, change jobs, or start their own company. But never feel that you are owed something.

<comment><USER9> Of course they have the right. That doesn't make it a good idea! A company should be smart, insightful and take the long view with compensation decisions.

Anyway, you're using the word "owed" but the twitter thread doesn't, so I'm not sure we're talking about the same thing.

</comment></comment></comment></comment><comment><USER10> The way I read it - she was being not-so-subtly hinted to search for another job.

No way in hell the management wouldn't realize how refusing a 4-year old employee any options would look on her end. Zero is zero. It's like leaving a 1c tip at a restaurant. So this was most certainly done on purpose.

<comment><USER11> Or more likely management didn't care whether she looked for new employment.

I've been through three of four of these situations and every time there is a list of positions that management deems important enough to grant options. It was always clear how not being on that list is perceived and that people might quit and some consideration was made to not risk losing some they considered important enough.

I bet it wasn't the author's title but the author. The COO knew who she was and didn't think she was important enough to grant options. Saying it was because she had the wrong title seems like a coward move.

I never felt good being on or off the list or making the list. I think it's better to award some amount to all early staff. One of the myths and legends of tech that I loved hearing as a kid was the Microsoft secretary who is not a millionaire.

Options grants like this describe the character of a company. I don't think it's impossible to work in an org like this, but it should be a factor in choosing to stay or choosing to join.

<comment><USER12> This is a good interpretation of the event as I understand it.

Culturally, it would be a good move to grant all employees before x date a token number of units so they felt validated. $1k worth of units to a few dozen employees is a rounding errors worth of dilution but would pay many intangible dividends to the culture.

I do think, ultimately, the bulk of incentive equity should go to those most likely to make significant contributions.

</comment></comment></comment><comment><USER13> She wrote in the thread that people received 1000, 2000 shares. They are trading at about 35$ now. Who knows, they could skyrocket a few years from now and be worth millions, but at the moment they are worth a good amount of money but not a life changing one. Nothing to be sad about.

I worked for a startup many years ago (so they called themselves but being a phone operator before virtual ones they had to start big, 2k people and more.) They offered me options but I asked for more salary and less options. It turned to be the right decision because they got close to the IPO but never really did it.

</comment><comment><USER14> Are you entitled to equity in a startup for being there early on? How is being "naive" and accepting a contract an argument for being mistreated? Am I being too skeptical?

</comment><comment><USER15> Her personal story aside, which I can imagine must feel a bit bitter, I am of the opinion that equity should only ever be given to employees who have a crucial and direct impact on the success of a business. If I join as a COO into an early startup then I take risks, play a crucial role in it's evolution and therefore deserve some equity to incentivise the best performance I can do. However, if I'm an account, even if I'm employee no 2 I would never expect equity. Doing accounts is not crucial and has nothing to do with the actual startup itself. If they pay a normal salary for an accountant then any accountant could just take that job and replace me. Why should the business owners who must have taken huge risks themselves ever give a piece of their hard earned cake to an accountant? Doesn't make sense, they get a fair salary for their work and that is all they deserve.

So there's always two sides to everything. Not everyone always deserves what others have. That's a common misconception today where everyone looks for reasons to claim how they've been treated unfairly.

EDIT:

Before more people jump at my throat, I want to clarify that I am not talking about not compensating employees well because of a stupid reason like they can get replaced or something. That's not at all what I'm saying and I thought that was pretty clear. EVERYONE should get a great salary and great work/life perks, BUT when it comes _specifically_ to giving away OWNERSHIP of one's business, then IMHO _just being a great employee_ is not reason enough. I just don't think that everyone should own some % of a company just for rocking up every day and being nice to their colleagues. That's all.. if you disagree with that, then fair enough, but then say that, and don't try to teach me that people should get compensated well, because I never said otherwise.

<comment><USER16> This comment is so horribly wrong that it's hard to know where to start.

1\. "Doing accounts is not crucial". Um, yes it is. Doing accounts is very, very important. They are a way of understanding the truth of your business, keeping your cash under control, satisfying legal obligations.

2\. "If they pay a normal salary for an accountant then any accountant could just take that job and replace me". People are not interchangeable. A good accountant (one who is competent at their job) is your table stakes, after that you have to consider how well that person works with others and how they contribute to the culture of the company. A start up is not about the visionaries or engineers it's about an entire team that makes a company grow and work well together. Viewing an accountant is not contributing to the company culture is not just plain dumb.

3\. Also, accounting is way more than just filling in a spreadsheet. When you look at the effect of AR and AP on the business you quickly realize that this stuff matters.

4\. Everyone in a startup could go somewhere else. And everyone is taking some level of risk (e.g. they could have gone to a more stable company that provided better long term job prospects). Everyone deserves to participate in the risk/reward.

So, reward people that you want to stick around at the company. Give everyone some equity, given everyone some upside. A business owner who sees someone like an accountant as a drone doing a job for pay is missing out on the larger picture of building a healthy company for the staff and getting the best from that person.

<comment><USER15> People are not interchangable, but their skills very much are. Accountants are not being treated as drones. Whether you think their importance is extremely crucial in an early startup or less crucial it doesn't matter, because all of that is taken into account when paying them a _fair_ wage. That is de facto the definition of fair. So nobody needs to feel offended. You deliver a great job and we pay you a great salary according to market rates and your experience. This is how the world works.

If a coffee fetcher or accountant would come to a startup owner and say I want a piece of your company for making you coffee or filing your tax returns then they better back up why the business owner will not just ask someone else to do it at this point. It's not that they don't value their contribution, but it's just not a reason to give away a piece of your ownership of your own company where you've put blood and sweat into it.

However, if a subject matter expert comes to me with the same request, and the market is such that there's already very little people of that qualification available anyway, and their contributions are seen as make or break the company, then the conversatoin will certainly be very different.

This is just the free market, no matter how you feel about this, it won't change. There's obviously the argument that the free market doesn't serve us well, but that's a different conversation and out of this context here.

<comment><USER16> I think you miss my point that the accountant is part of your team. They are doing more than just the job of accounting and help build the company culture. The culture, teamwork etc. are intangibles that will make a big long term difference.

You are certainly within your rights to decide to keep all the equity to a small number of people but you'll be building a very different company than one I would want to work for.

For example, I am very happy that my Executive Assistant has options in my company. She's an integral part of my success and doing my job every day. There were lots of candidates for her job but we chose her. And I'll be ecstatic if one day she sees upside from having taken the job working for me.

<comment><USER15> > She's an integral part of my success and doing my job every day. There were > lots of candidates for her job but we chose her. And I'll be ecstatic if one > day she sees upside from having taken the job working for me.

So why don't you give her that upside? As a business owner you can pay her whatever you would like her to see earn one day. Just do it, there's no inherent reason why equity has to be given away. Of course if you prefer to pay her a promise of _maybe_ one day cashing out, but equally not cashing out at all, then I wonder if you _really_ value her contributions today as much as you make it sound here. Honestly, people can run amazing companies and treat their employees really really well from day one, not one day when they win the lottery.

EDIT:

BTW congrats on the IPO!

</comment></comment></comment></comment></comment><comment><USER17> The fundamental power dynamic of equity is always difficult for employees. Non C-level employees practically never have the negotiating power to demand equity. However, I've seen several occasions where founders have constantly promised their staff equity (whilst underpaying them) and never followed through. Dangling equity is a great tool for dick head founders.

</comment><comment><USER18> If its true that everyone else at the company got options but her thats pretty upsetting. If she was reporting directly to the COO and they had a good working relationship then that person should have fought for an exercise grant or eliminated the position.

</comment><comment><USER19> I fail to see her point. There's always lack of transparency in equity allocation. If there exist a startup with a transparent cap table, that's surely exceptional.

</comment><comment><USER20> Equity is like a superpower in negotiation with employees. Because it is zero sum among them, it neutralizes collective bargaining—the most effective form of negotiation they have.

So it's not as black and white as, she should have done this or that differently, or someone should have made this or that disclosure or even helped her out. Equity is pretty magical in how it makes people misbehave and turn on each other.

And feeling mad that she got a raw deal is the right emotion here.

</comment><comment><USER9> Ouch.

For what it's worth for her peace-of-mind, I really doubt they would have given her options if she had made a push.

Essentially, the decision had already been made. It's not impossible that they could have been convinced to change their minds, but it would have required some new or unexpected leverage to make it happen. (They would have already factored in that she could have become disgruntled or quit.)

It certainly doesn't seem fair, though.

</comment><comment><USER21> Well, pessimistically it might not matter much either way. The employees with stock currently will likely be subject to a six month lock-up period after the IPO date. And it's quite likely that the house of cards that is WeWork won't survive that much scrutiny as a public company, and the price might be so low by the time anyone below the executive level can sell.

<comment><USER22> Add to that dilution when owners can print more shares for investors and different types of shares (aka preferreds) when a common employee often gets nothing because all the money go to preferreds.

</comment></comment><comment><USER23> How many women were at the company at the time and how many of those received equity?

</comment><comment><USER24> I understand this person is upset and likely bitter, but claiming that she remained "naive" about options after 4 years in a startup, when they started granting them (tweet #15), looks rather odd to me. There's gotta be more to the story than written.

</comment><comment><USER25> >By no means do I feel entitled to equity

I think she does come off as entitled. I also think she has every right to feel that way. #17 is really early. I'd go so far as to say she deserved it.

It feels like ops people are generally under-appreciated in tech.</comment>


After the Crash: How Software Models Doomed the Markets - <AUTHOR> http://www.sciam.com/article.cfm?id=after-the-crash&print=true <comment><USER3> A friend of mine does financial software modelling that is used in a number of major banks. According to him these models have predicted a major crash for the last couple of years. They weren't able to see when the crash would occur, but they could see that certain relationships such as household income/mortgage payments were diverging further and further from a historical mean.

<comment><USER4> Just observing the property value increases in my area made me nervous. I could observe no inherent basis for their magnitude. Housing was experiencing a surge not reflected in the broader economy; it was feeding upon itself. The penultimate "house of cards".

There was no sustaining model for the demand. The population wasn't increasing that rapidly, and people's productivity (or earnings) wasn't rising in a fashion to enable them to afford to occupy an ever increasing quantity of living space.

<comment><USER5> nitpick: the word "penultimate" means "next to last."

<comment><USER4> Thanks. Guess I'm getting a bit sloppy in my phrasing.

Or maybe it was my subconscious? If so, I'm not sure I want to know / learn what is the ultimate house of cards. The current one is already proving challenging enough for me. ;-)

</comment></comment></comment></comment><comment><USER6> The more I learn about this crisis, the more I am convinced it all came down to one thing, and one thing alone: leverage.

Now, the situation is obviously complicated and can't be pinned down to one factor like that, so let me be clear: I'm not saying that one fact explains every last detail about the crisis. What I _am_ saying is that the grotesque overleverage we saw was sufficient to cause _a_ crisis. Exactly how it manifested depended on computer models and dumb loans and all the other little details. But the situation where banks and large financial entities were leveraging 30x meant that a crisis of this type was inevitable; the only question was the details.

When you set up a scenario such that any 3% drop in asset value has driven you bankrupt and 4% means you're in horrific debt, you have _already lost_. How exactly this loss manifests, and how many smart people there are with computers trying to put off the day of reckoning there are hardly matters; epic failure (and I mean that in the original sense, not the meme sense) is inevitable.

Did the geeks tell the banks to overleverage? Quite possibly. If so, then yell at them too. This article doesn't support that claim, though. (In fact it's very vague in general.)

</comment><comment><USER7> There was an article on HN a month or so I can't find a link to which discussed how a number of major banks didn't properly update their models to knowingly take greater risks. It explored how a number of banks were using outdated models to allow them to bundle risks to create short-term profits at increased risk without upsetting the feds.

So, sure, the models were wrong but was the reason the inability of the modelers?

</comment><comment><USER8> Seriously? Any chimp with half a brain - including me - saw a crash coming. I didn't need software models, and I may have been unable to pinpoint it, but all you had to do was use a little common sense.

When you're pretty confident that you're making market - more or less - <USER2> yet you can't possibly understand how your peers afford $500K houses and 2 $40K cars, the writing is on the wall.

</comment><comment><USER9> I bet Nicholas Nassim Taleb is getting a lot of calls these days... Seems his criticisms of economic quantitative modeling have been vindicated more than he probably wished to see.</comment>


NYU ARISE High School Summer Opportunity - <AUTHOR> http://engineering.nyu.edu/k12stem/arise/ <comment><AUTHOR> If you have a younger sibling, child, or just know some youngster consider passing this opportunity along. Also here is another program for young females: [http://www.girlswhocode.com/applynow](http://www.girlswhocode.com/applynow)

I wish I had more information about such programs when I was in high school. Now that I have internal information from my company, I thought I share with the community.</comment>


Green Threads Explained - <AUTHOR> https://c9x.me/articles/gthreads/intro.html <comment><USER2> I enjoyed the expedient writing style. The author did a great job of expressing the essential knowledge without too much verbosity. It's very clear what the skeleton of the project consists of, and the known unknowns are labeled (i.e. "this is how this works, you can read more later [here]").

Some may find this directness unempathetic, but I consider it as the opposite: the writing seems precisely aware of exactly what the reader wants to know at any given time and what questions he or she would be likely to have on their mind.

<comment><USER3> Curious about which bit someone might find unempathetic? It all seems pretty straightforward to me.

<comment><USER2> I just meant it subjectively. I assume some might not like this expedient style as a matter of taste, because most publications/articles/tutorials are not written so concisely.

</comment></comment></comment><comment><USER4> Related: Early (almost prehistoric by software timeline standards) versions of Java used a green thread implementation, but this was dropped in Java 1.1 in favour of the current native OS thread model. Some background:

[https://softwareengineering.stackexchange.com/questions/1203...](https://softwareengineering.stackexchange.com/questions/120384/why- not-green-threads)

<comment><USER5> Java had a quite lousy implementation of green threads, that hurt performance more than enabled parallelism. (What isn't explainable by it being early, since there were earlier green threads implementation that didn't suck. Looks like it just wasn't a priority for Java developers.)

There's nothing anywhere restricting green threads to a single OS thread. Most modern runtimes will automatically multiplex the green threads into as many OS threads as your computer can run.

<comment><USER6> > Java had a quite lousy implementation of green threads, that hurt > performance more than enabled parallelism

1:N green threads (which Java had) aren't intended for parallelism and provide none. They provide concurrency only.

M:N green threads (e.g., Erlang processes) provide parallelism.

<comment><USER7> Java had a mixed model where it could use LWPs or kernel threads, and switched over around Solaris 8 because things like stat() were still blocking and had no async counterpart, so were difficult to deal with.

I dug up this fossil the other day, trying to get a fix from Sun for this very issue:

[http://d.hd.org/JavaThreadsCommentToSun19980820.html](http://d.hd.org/JavaThreadsCommentToSun19980820.html)

<comment><USER8> Is this solved in Go? A while back Go required programmers to use rate limiters, otherwise it would spawn unlimited kernel threads for blocking syscalls.

<comment><USER9> It's capped at 10000 threads (configurable). Note that Go uses asynchronous I/O where possible.

</comment></comment></comment></comment></comment></comment><comment><USER10> It's occurred to me that asynchronous programming is essentially just very lightweight green threads with the added benefit of scheduling tied directly to I/O.

Synchronous programming is typically much more natural. It's too bad no languages have opted to abstract this away. Of course I suppose coroutines are kind of that.

<comment><USER11> Erlang does that. The logic inside erlang processes look synchronous but outwardly its all async.

For example you can send a message to a different process, even running on a different machine and wait for the reply right there in the next line. It doesn't hold any OS threads.

<comment><USER12> Intriguing thought, async to what?

If a program needs the input before continuing doesn't it need to wait and therefore hold the program flow and therefore stop, even in erlang?

<comment><USER11> >If a program needs the input before continuing doesn't it need to wait

Erlang applications are developed using message passing Actors which are implemented as very light weight processes/green-threads.

So your process that sent a message can wait for the reply synchronously. It doesn't hold anything up in the overall application.

You can have hundred of thousands of these processes running in a node.

Do check it out. It is very liberating. Why it is not vastly more popular is a mystery to me.

<comment><USER12> While it's possible to have thousands of these processes running, it's completely up to the problem domain for it to be useful. If it wouldn't be bound by the problem domain you wouldn't need to write actors either.

</comment></comment></comment></comment></comment><comment><USER13> I recently did a similar thing [1]. The major difference I did was to store the registers on the stack instead of a separate structure. The stack _is_ the thread structure.

I also have a version for x86-32 bit and x86-64 bit (and they work under Linux and Mac OS-X). The assembly code isn't much, but it took a while to work out just what was needed and no more.

[1] [http://boston.conman.org/2017/02/27.1](http://boston.conman.org/2017/02/27.1)

</comment><comment><USER14> In the code listing on the 4th page [0], why is MaxGThreads and StackSize wrapped in an enum? I would use an enum when I might want some values to be mutually exclusive. Seems like these values aren't even used in the same context? I would use static const ints.

[0] [https://c9x.me/articles/gthreads/code0.html](https://c9x.me/articles/gthreads/code0.html)

<comment><USER15> Because in C (as opposed to C++), a static const int is not a compile-time constant (so you can't use it in places like switch case labels).

</comment></comment><comment><USER16> Interesting. I hadn't heard the "green thread" term before. Does anyone happen to know how this compares to Windows' "fiber" mechanism? I can't recall whether fibers actually run in user land.

<comment><USER17> A Fiber is a cooperative multitasking strategy. As such, a fiber _must_ yield at some point to allow other fibers to do their work.

Green threading is just the idea of doing the scheduling of threads in user- space. It can be preemptive or cooperative. Fibers and green threading aren't mutually exclusive, afaik.

<comment><USER18> Are there actual examples of green threads that are not cooperative?

All the implementations I've seen are cooperative.

<comment><USER19> Haskell has green (N to M) threads that are pre-emptive. As does Go (but it calls them coroutines). Erlang (but it calls them processes) I'm not sure about. Maybe it only re-schedules on message sends and receives?

<comment><USER20> Erlang does a different thing called "reduction-counting": the active process in a scheduler-thread gets a budget of virtual CPU cycles (reductions/"reds"), tracked in a VM register, and part of the implementation of each op in the VM's ISA is to reduce that reduction-count by an amount corresponding to the estimated time-cost of the op. Then, the implementation of the _call_ and _ret_ ops in the ISA both check the reduction-counter, and sleep the process (scheduling it to resume at the new call-site) if it has expended all its reds.

(If you're wondering, this works to achieve soft-realtime guarantees because, in Erlang, as in Prolog, loops are implemented _in terms of_ recursive tail- calls. So any O(N) function is guaranteed to hit a call or ret op after O(1) time.)

If you're writing an Erlang extension in C (a "NIF"), though, and your NIF code will be above O(1), then you have to ensure that you call into the runtime reduction-checker yourself to ensure nonblocking behavior. In that sense, Erlang is "cooperative under the covers"—you explicitly decide where to (offer to) yield. It's just that the Erlang HLL papers over this by having one of its most foundational primitives do such an explicit yield-check.

<comment><USER21> If loops are implemented as tail calls, doesn't the call opcode get optimized away thus preventing the reduction checker from being run?

<comment><USER22> It marks the point just before the call as a yield. That yield remains after optimization.</comment></comment></comment></comment></comment></comment></comment>


Show HN: Binary to UTF-8 encoding. - <AUTHOR> http://www.github.com/nemasu/utf8encode <comment><AUTHOR> Got this idea last night, coded it up in a few hours. Code quality is terrible, was going for more of a proof of concept. Anyways, the overhead is pretty bad, BUT you can use things like <Insert social network here> now to store files. Although < Aforementioned social network> may mangle the UTF-8, so it may not work.

<comment><USER2> What is the benefit of this over uuencode or base64/base85 encoding to perform the same use?

<comment><AUTHOR> Not much, only a few super niche cases I can think of, and you can also use yEnc, but this is cooler. :)</comment></comment></comment>


OkCupid's Unique Approach to User Onboarding - <AUTHOR> http://www.useronboard.com/how-okcupid-onboards-new-users/

<comment><AUTHOR> I really love what OkCupid's doing for onboarding new users. They incorporate quizzes and ratings to make it a breeze.

<comment><USER2> You should check out Tictail user onboarding, I'm sure you will like it. They really take in account the kind of audience they are trying to reach out.</comment></comment>


Performance Reviews Can Kill Your Culture - <AUTHOR> https://fs.blog/2019/11/performance-reviews-kill-culture/ <comment><USER2> > The success of one person means the failure of another.

In ideal world perf reviews should not degenerate into this. In real world, it is a zero-sum game. One example is that the budget for giving increments/hikes is always limited. To reward one individual means giving less to someone else. Second example is that of promotions. As you go up the ladder, there are fewer positions and competition is more. I can't see any other way but to stack rank the employees. The criteria used may be flawed, but that does not mean that ranking is not needed.

Talking about criteria: if its too objective people will game it, if its too subjective then all sorts of human factors come into the play.

Finding a solution for this has always been a holy grail and every now and then a company claims that "they-do-it-differently". Even if a company does this really well it only says about that _point_ in time. It is a different thing to sustain that year over year. All companies have issues in their perf review. They only differ in toxicity.

</comment><comment><USER3> My take is that they are inherently bad for the relationship, as they are:

a) asymmetrical

b) biased and subjective even when they're framed in terms of metrics

They are essentially a star rating of how compliant an employee is and how much the employer likes them.

</comment><comment><USER4> A review that's anything other than "great year, keep up the good work" is a sign that you need to move on.

Good management doesn't enumerate how you suck. Good management tells you your priorities, helps you eliminate blockers, cheers you on, and tells everyone that will listen how awesome their team is.

<comment><USER5> That's completely absurd - a good review should highlight and summarize the feedback you've been steadily getting on how you can be a better and more effective employee. It should definitely highlight your success, but it shouldn't paper over what you could be better at. How the hell else do you improve? I've never had a report who didn't ask for more feedback, and the vast majority of people genuinely want to know how they can grow and become better what they're doing.

This article talks a lot about forced ranking - I agree that is a pox on humanity. But actionable feedback is the lifeblood of improvement.

Frankly, management that doesn't give actionable feedback and instead just tells you to keep doing precisely what you're doing is a sign you need to move on, because they don't care about your future.

<comment><USER4> Helpful feedback is welcome, especially when solicited. But it doesn't belong in an official review, and should be timely, not on some yearly basis.

When your manager puts a negative word on paper, you know it's over. Or, put from the other direction, if you're a manager, don't crap on your people and expect them to stay.

</comment></comment></comment><comment><USER6> For all of the good points made in the article, the suggested fix is very weak. I am not a fan of performance management as described in the article. You end up sacrificing teamwork.

Depending on how much money is at stake you will see all kinds of toxic behavior. On the other hand if you don't aggressively send signals for poor performers you are left with a bunch of unmotivated people.

One of the better ways I've seen it work is to reward employees through quarterly bonuses depending on their performance. You'll quickly know where you stand in your boss's and organization's eyes.

<comment><USER7> > On the other hand if you don't aggressively send signals for poor performers > you are left with a bunch of unmotivated people.

I never understood this rationale... It's lacks accountability all the way back to the beginning of the employer-employee relationship. Why did you hire these folks in the first place?

</comment></comment><comment><USER8> This article sounds much like the view of W. Edwards Deming, who called for the elimination of the annual performance appraisal. His rationale was, "The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of performance."[1]

[1] [https://blog.deming.org/2012/10/dr-deming-called-for-the- eli...](https://blog.deming.org/2012/10/dr-deming-called-for-the-elimination- of-the-annual-performance-appraisal/)</comment>


Become an entrepreneur and start your digital agency brand on Fulfilli in - <AUTHOR> https://fulfilli.com/build-a-top-digital-agency/ <comment><AUTHOR> If anyone has any questions about agency business development, I'm happy to chat.</comment>


Peru recovers priceless Inca manuscript stolen during occupation - <AUTHOR> https://www.france24.com/en/20200221-peru-recovers-priceless-inca-manuscript-stolen-during-occupation <comment><USER2> That's awesome, I hope they digitize it and translate it soon. I definitely want a read.</comment>


EVE Online Investment Scam Revealed - <AUTHOR> http://www.phaserinc.com/index1.html

<comment><USER2> This isn't the first time this happened. I remember this story:

[http://slashdot.org/story/06/08/23/1918246/EVE-Online- Rocked...](http://slashdot.org/story/06/08/23/1918246/EVE-Online-Rocked- by-700-Billon-ISK-Scam)

which was funny because the guy basically just ran a 'bank' where you just gave him the ISK in game. It was a dead-simple Ponzi, pay interest out of (some of) new depositors' cash.

And then when a lot of people started trying to point out that it was most likely a scam, he pretended to be offended and said, "If you're going to call me a scammer I might as well take the money." And he did.

Then he proceded to buy a really fast ship and repeatedly bounty himself for lulz.

This is all what I remember from reading about it at the time, I've never played, myself.

</comment><comment><USER3> So they got around 1 trillion ISK, or around $21K worth of game-time cards (30 days each). For comparison, it costs around 80 billion isk to build the largest ship in the game. For that money they can pay for a large-ish military campaign lasting 30 days or so.

This ISK would be hard to launder back into real money, as CCP does not allow the conversion of ingame -> real (though the opposite route is allowed).

<comment><USER4> >This ISK would be hard to launder back into real money

Not true, I know of several Russians that live off the game with far less ISK.

<comment><USER5> reddit AMA?

<comment><USER4> Yeah right, last thing they need is people inquiring/crowding into their livelihood. They didn't like me very much anyway.

I was a merc paid to fuck up their operation by enemies of one of their allies.

<comment><USER6> how many degrees of separations is that?

<comment><USER4> Not that many. The Russians were providing virtually the only capital support the antagonist had at the time so harassing them and shutting down their supply chain and income sources made a _lot_ of sense.

Our small team ops were effectively force multipliers in terms of how many capitals we disabled or harmed the operation of.

</comment></comment></comment></comment></comment></comment><comment><USER7> I think there is a lot of good to come from things like this in a game like EVE (I do play from time to time). One is that hopefully some of those 4252+ people will have leaned to be more careful in the real world.

</comment><comment><USER8> Seems rather pointless. To provide a legitimate service for 8 months and then abscond with the money because there are no legal consequences isn't much of a challenge, experiment or lesson to anyone.

The only surprise is that they waited 8 months instead of 8 weeks to do it. (I would have rewarded a few points if they waited 8 years.)

<comment><USER9> Pointless? They got 1 trillion ISK.

<comment><USER8> In exchange for 8 months of at least moderate effort. Two people couldn't have come up with $21,000 in earnings over 8 months? (The $21,000 figure taken from the comment above me.) And they could have made that money in non-virtual currency that they could have used outside the game.

If this was to run an experiment about greed or investor naivety that would be another thing, but that doesn't seem to have been the case here.

<comment><USER10> They did it while playing a game. And there's a certain thrill in scamming people, certainly.

</comment></comment></comment></comment><comment><USER11> This already happened several times over the course of EVE's history. Ponzi schemes are frequent and occasionally the succeed in epic proportions. I don't understand why people keep falling for these. : every two years or so it is mentioned.

<comment><USER12> _> I don't understand why people keep falling for these._

The same reasons people fall for them in real life.

<comment><USER11> I must say I reacted in the same way when I read about Madoff. The fact that people who are supposed to inspect investments would fall for such a scheme was one of the first nails that was put in the esteem I had for economy specialists.

<comment><USER13> The Madoff case is a little different because Madoff himself had a tremendous reputation. People weren't throwing their money at some shady anonymous figure, he was supposed to be incredibly successful.

Still unwise of course, but a little more understandable.

<comment><USER14> But he did not have that name before he started his scheme, right? Same with all the EVE bank scams... none of them were all that famous and started "from scratch" and at first just baited people with normal operations.

The difference is that Madoff never EVER had any real business to begin with and basically just distributed money around and made sure enough was coming in to cover it.

</comment></comment></comment></comment></comment><comment><USER15> So they created an in-game mutual fund paying weekly interest? Is that all there was to the scam? Maybe I'm missing something, but the site to newcomers doesn't explain what they _did_ to convince players to invest in them.

<comment><USER16> _"Maybe I'm missing something, but the site to newcomers doesn't explain what they did to convince players to invest in them."_

Promote it in local chat windows until you get a few bites, and then let "word of mouth" help grow you organically. The first few people were the brave ones. They were rewarded well in order to offer a bit of social proof to other players. If your friend did it and doubled his money, it must be safe! After all, what kind of scammers would actually give any money back?

</comment></comment><comment><USER17> I assume this was a Ponzi scheme that worked out really well. Whether or not it's 'allowed' or 'legal', I won't touch.

What I learned from this is that if you have a problem with a company, and it's not resolved, make sure you write it on the internet in a place that won't disappear. For others to see. At best, you might get 'fixed' to shut you up. At worst, others have a warning to go by.

<comment><USER18> Yes, a very good ponzi scheme, and yes this is 100% legal and allowed in the world of EVE. Frankly this is one of the things I love about this game, it allows people to show their true colors. It's also the reason I don't play it.

<comment><USER19> IANAL, but regardless of game rules that sounds a lot like wire fraud.

<comment><USER20> Would you also suggest Monopoly players be indicted for operating unlicensed banks?

<comment><USER21> Who are you playing monopoly with? Last time I checked you don't have to pay in real cash to get your funny money.

<comment><USER22> Actually, you do. A set of Monopoly money costs about $20 (and includes a free board).

<comment><USER23> Unless you find the PDFs of the money: [http://www.zieak.com/2008/08/19/print- your-own-monopoly-mone...](http://www.zieak.com/2008/08/19/print-your-own- monopoly-money/)

</comment></comment></comment></comment></comment></comment></comment><comment><USER24> Too bad that EVE Online only seems to get into news for that kind of thing. I haven't played it, but I occasionally dream about the possibilities of less regulated MMORPGs, which EVE seems to be.

<comment><USER25> It also gets into the news for people doing awesome non-scammy things. Take the assassination of Mirial for instance: [http://www.computerandvideogames.com/180867/features/murder-...](http://www.computerandvideogames.com/180867/features/murder- incorporated/?site=pcg)

</comment></comment><comment><USER26> Financial planning in a game? Is this semi-required busywork or are most players having fun with it? Why this and not paper trading (or real) investments outside the game?

How much work would it take to turn EVE into a Libertopia? Could an MMO like this exist without griefing and scams being so common?

<comment><USER27> Isn't a libertopia (reading as a libertarian utopia) a place where griefing and scams are able to run rampant, the thought being that the free market will sort out the issues in the long run? Of course people get hurt in the short term, but that's just natural selection at work...

At least, that's my understanding of a pure libertarian philosophy - still not sure how the philosophy gets around the people at the bottom of the social pile getting crushed, or even that it tries to.

Running a virtual investment vehicle (legit or scam) actually sounds quite fun for a certain type of person. I find the mechanics of scams, cracking, social engineering etc. quite fascinating but have no desire to actually con people out of money. Running a ponzi scheme in a virtual game world sounds like a fascinating way to see the mechanisms at work - same with the whole virtual currency space in general.

Seems like it would also be of interest to economists and social scientists - previously it's only been possible to do postmortems or theoretical discussions of certain economic issues (truly libertarian societies, ponzi schemes, etc.) but being able to watch them form in such a simple world must be quite exciting for researchers in that area.

<comment><USER28> As it happens, CCP (the company that runs the game) employs an economist who advises them on how to keep the in-game economy stable (so that commodity/game item prices are not subject to so much volatility that people give up and stop playing), and he also produces quarterly reports for the players on how the economy is functioning. There have been some academic papers written on virtual economies, it's an interesting theoretical tool.

</comment></comment></comment><comment><USER29> Can't you exchange ISK for dollars? How is that not fraud, in the real world?

<comment><USER30> Game companies make absolutely sure that in-game currency isn't the same as IRL money, because then players would have to declare in-game property on taxes etc. and the game servers would be like banks or something. It's much better for everyone if you can't do that :)

<comment><USER11> And yet it is possible to exchange ISKs to BTCs, then dollars.

<comment><USER31> That's only a step up from barter, though. You could exchange ISK for live chickens if you could find someone interested.

<comment><USER11> The liquidity of BTCs is notoriously better than that of live or dead chickens...

</comment></comment></comment></comment></comment><comment><USER32> can someone define these for me? ISK, PVP.

<comment><USER33> ISK is the in-game currency. PVP means "player vs player", its where two human players are competing against eachother- contrast with PVE (player vs environment) where a human player is opposed by computer controlled AI enemies.

</comment></comment><comment><USER34> I wonder how much this was directly inspired by Madoff?

<comment><USER35> This has been done many times before in game.

The note worthiness of it is the amount and that they've explained how they played the system without being immediately accused of running a scam.</comment></comment>