Ask HN: What did you do when you suddenly got rich? - <AUTHOR> My company just went through a transaction that increased my net worth by >$5M.<p>When this happened to you - what did you do?  How did you handle it?  What did you buy and what kind of financial planning/investments did you make? <comment><USER4> \- Maxed out insurance (home, car)

\- Set aside a large amount for taxes, invested it in US Treasury Bond (get an estimate of your taxes from an accountant)

\- Got an accountant

\- Read up on QSBS (this can save you a lot of money if you got stock when the company was small enough)

\- Got a last will and testament drafted and signed. Also asked our probate lawyer about stupid things people do with money, so as to avoid those mistakes.

\- Got a financial planner. Also asked about stupid things people do. (At your scale, probably ok to just do standard ETFs and bonds. Note that don't buy in all at once, diversify not just the investments but also by time, so you're not buying all into the stock market at once. This also gives you time to think and reflect about how you want to use your money and what legacy you want, while also getting some returns on investments)

\- Set up a donor advised fund (you can donate stock directly to one and get a big tax break)

\- Made a donation and got something cool named after two of my long time mentors

\- Read book Silver Spoon Kids on how to talk to one's children about money (our financial advisor gave this to us)

\- Read a lot about wealth and power in the United States, in particular sociologist and psychologist William Domhoff's "Who Rules America?" [https://whorulesamerica.ucsc.edu/power/wealth.html](https://whorulesamerica.ucsc.edu/power/wealth.html) (I stumbled on this by accident, but found it a fascinating read)

Time is on your side here, so don't rush into anything. I was really lucky to have a brother who already had high net worth, so he was able to give a lot of guidance and discussion of tradeoffs.

<comment><USER5> > Maxed out insurance (home, car)

This isn't a problem I'm ever likely to deal with, but what was the thinking behind this one? I'd have thought >$1 mil in net worth is the time to _cancel_ any insurance you have (maybe not health) on the basis that you can self insure now.

<comment><USER6> It's absolutely not about the replacement cost of stuff. It's about protecting your assets from lawsuits.

<comment><USER7> Insurance makes lawsuits against property it covers -- more likely, because insurance increases chances of plaintiff to get paid.

</comment></comment></comment></comment><comment><USER8> Standard advice:

\- Set aside money to pay taxes FIRST.

\- Invest in mostly conservative instruments, as if you were a retiree.

\- Keep a small position in risky stuff to capture some growth and get it out of your system.

\- Diversify

\- Keep quiet about it, don't get talked into crazy investment schemes. Think "old money" rather than "new money."

\- Treat yourself a bit, recognize when you've hit "enough." i.e. more doesn't bring happiness. The number is lower than most realize.

\- Remember mom, and others instrumental in your success. Everyone else can apply to your scholarship foundation, haha.

If your expenses are "reasonable" you could live off interest/dividends for the rest of your life. Donating time and charity to whatever causes you see fit.

<comment><AUTHOR> Agree re: put money away for taxes - I've made the mistake of not doing that in the past and it leads to more problems.

As for conservative - general plan is to put enough money into 3-fund portfolio to be 'set for life' \- then be a bit more aggressive with the rest. Agree with diversify. Keeping quiet is good - agree re: think like old money.

I do need to figure out how to treat a bit. Today we decided to splurge on $120/visit weekly housekeeping - too extravagant?

I plan to work for the next 30 years because I like it. I'm around 40 - <USER2> we'll see how it all goes.

<comment><USER8> > too extravagant?

Doesn't sound too bad if you've got millions. Those little things add up though in the long term. Just ask MC Hammer. ;-)

</comment></comment></comment><comment><USER9> Most people who get a lot of money all at once blow through it in 7 years. There are many broke lottery winners and NFL players.

$5M is not rich today. $5m is a lifetime of moderate income if you're really careful.

The classic advice was that you could spend 4% of your net worth per year. Today, it's probably only 3%. Yields are lower.

You don't have to do anything immediately. You can park it in T-bills, brokered CDs up to the FDIC limit, and big index funds.

Any investment where they call you is lousy. If it was any good, it wouldn't have paid marketers.

Avoid financial advisers who want you to trade a lot. Trading for individual investors is, overall, a lose.

Don't buy a restaurant.

<comment><USER10> > Don't buy a restaurant.

I'm curious about this. Could you please explain more?

<comment><USER11> I almost bought a restaurant. Even the good ones like McDonald's aren't great. They're a lot of hard work to keep alive, very low profit margins, easily influenced by little things like 6% tax.

It's the kind of thing you put half a million dollars into and earns about $10k/month on average, loses $10k/month on a bad month, and teases you with the possibility of making $100k/month on paper.

It also requires a lot of accounting and dealing with minimum wage workers who have to be trained in basic etiquette, like not sleeping during rush hour and not throwing drinks at rude customers. Which is not really the niche for many of us.

<comment><USER12> I would respectfully disagree on the categorizing of McDonald's as "restaurant" (let alone "good").

<comment><USER13> I suspect muzani was referring to it as an investment vehicle, not a rating on the food.

How often do you see a McDonalds closing for good?

<comment><USER12> >I suspect muzani was referring to it as an investment vehicle, not a rating on the food.

>How often do you see a McDonalds closing for good?

Ow, come on, he posted:

>I almost bought a restaurant. Even the good ones like McDonald's aren't great.

It can be read both ways, one of which sounds (to me at least) funny.

However if we are going to be picky, a McDonalds (or better a McDonalds you can actually buy) is a franchise:

[https://en.wikipedia.org/wiki/Franchising](https://en.wikipedia.org/wiki/Franchising)

and whilst McDonalds (the parent company) isn't going to close for good, I know people that managed to lose money attempting to run similar franchises.

In such a setup, all the technology, the supplies and the marketing (besides quality standards and training of personnel) come from the franchisor, so the "added value" by the franchisee is relatively low, and compensated accordingly.

Some data (maybe accurate, maybe not):

[https://work.chron.com/average-income-fast-food-franchise- ow...](https://work.chron.com/average-income-fast-food-franchise- owners-24587.html)

<comment><USER11> I meant "restaurant" as a system that converts raw food into money.

McDonald's, franchise or not, counts. Though to my understanding, they're not doing the franchise model as much anymore and are managing it themselves instead.

The linked article supports my view and is actually a little more profitable than expected. It quotes _20%_ net profit, which is amazing when most of the restaurants I see make close to 0% net profit.

Franchises add quite a lot of value. The hardest things in running a restaurant are marketing, product development & training, and supply chain. They supply all of these. If you want 'passive' income, franchises are the the closest thing to it.

<comment><USER12> >Franchises add quite a lot of value. The hardest things in running a restaurant are marketing, product development & training, and supply chain. They supply all of these. If you want 'passive' income, franchises are the the closest thing to it.

Yep, the whole point is that "they" decide (and can calculate at the third decimal point, remember it is "their" business and "they" have decades of experience in it) how much is what you bring home.

A "franchise" is also the closest thing to being between a rock and a hard place, you have more or less fixed prices (sale prices) and fixed (by them) costs, the only variables you can somehow manage is volume of sales (and it depends mostly or more than anything else on location) and personnel costs (which is anyway in most countries regulated by Law).

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER14> \- Paid off the mortgage \- Bought another section, built an ideal house on that over a couple of years \- Went to Disney World, took the nieces and nephews to Disneyland (yeah, I'm still cheap) \- Sent mum to the UK for a holiday

10/10 would slave away at a startup again (actually that's a lie, once was enough). We didn't owe any money other than the original mortgage, so there wasn't really anything else pressing to spend it on. Already owned a number of guns, motorcycles, and a basic sports car. No real plans to spend the rest, it's in the bank/bonds.

Basically I'm still living the life I always have, I just have a giant workshop now in which to play with my toys and pursue my hobbies. I think if this had happened 15 to 20 years earlier in my life, I'd be looking at things differently, but at this point I just plan to retire a bit earlier than I would have and not change much else. My father was also very savvy financially, I suspect he would have some pertinent ideas.

I now work for a small company as an integral cog in a relatively low pressure environment. I get to build things every day, come and go as I please, and my contributions are respected and valued. It's lovely :-)

<comment><USER15> Paying the mortgage is usually a bad idea. Assuming we are taking about the US, mortgage interests are tax deductible up to 750k (there are also deductions in most other countries), you already paid the mortgage origination fee, and usually you pay an interest rate that is not too high (if it is, you should consider renegotiating your mortgage, rather than paying it off).

<comment><USER16> From a pure math perspective, sure. But clearing the mental weight of a mortgage off your list of liabilities has value in itself to a lot of people.

</comment></comment></comment><comment><USER17> A couple years ago I came into about $200M (seriously), and let slip more than I should.

Really it just turns every conversation into a roundabout request for money. People are definitely nice to you and ask you onto all kinds of boards, funds, etc.. but it's a hassle. You start to worry a little bit at least about personal security, especially if you have kids. You also worry about ruining them forever. (Also, watch out for temptation that could ruin your happy family life... suddenly you're extra "attractive" it seems.)

On the bright side, you can try and get really big projects done, Elon musk- style. Just knowing you have the money helps a lot in getting meetings, raising more money, etc.

I'd just put it all in an s+p 500 index fund. Though of course I haven't followed my own advice. I wouldn't worry too much about dripping it in either, maybe put half in over a month and the rest over six months. Long term you're pretty likely to wish you'd invested sooner rather than later.

Set up some estate planning stuff and buy a model 3!

<comment><USER18> _I'd just put it all in an s+p 500 index fund_

That's a lot of money to invest in the health of one country's stock market -- a successful terrorist attack (think a dirty bomb in NYC or even multiple cities) could wipe out a significant portion of that overnight - it will likely recover eventually (as it did after 9/11), but that's a time when you'll want access to your money

I'd diversify across countries, and maybe precious metals.

<comment><USER19> Many of the companies on the S&P500 are global businesses whose value is based only partially on the US market.

Also, if something big happens in the US (9/11), stock markets tend to take a hit globally.

That said, I'd still diversify into a few international indexes.

</comment></comment></comment><comment><USER20> Congrats! I'm in similar situation couple of years ahead of you. There are good recommendations about the practical side of things in this thread. I like the bogleheads approach of simple index investing.

The actual transition was thrilling for me especially because I never anticipated that my life would still change once more at this age. The joke is of course as I had heard before, but never truly believed, that actually nothing changes. I wish the possibility of finding out that money really does not make you happy to as many people as possible.

I refrained from doing anything for almost two years. First big thing I did after that was to stop paying rent and got a decent apartment. Most sensible things to do with money are incredibly boring. And the fun things lose some of their charm if they become really affordable and common. The whole thing hinges on desire to have something you can't reach.

So the choices are to either up your game or decide that maybe this is enough. For me the jump was so big that my hedonic treadmill maybe got damaged.

I never was so materialistic, but I used to maybe value experiences and dream about ability to set my own schedules. Now I'm afraid that those as well are a mirage. Just a trendy pastime for people like me who have had always quite easy life.

I think the less known secret about money is that nothing needs to be done about it.

Sorry to everyone reading who are in a tough spot. I am aware that this is super tonedeaf.

<comment><USER21> Quoting Dalai Lama's reply to a question by a journalist about if Dalai Lama would counsel a rich or a poor person - "Rich person, of course. They know wealth does not change anything."

Warren Buffett Quote: "Money is not everything. Make sure you earn a lot before speaking such nonsense."

</comment></comment><comment><USER22> 1) [https://www.bogleheads.org/wiki/Managing_a_windfall](https://www.bogleheads.org/wiki/Managing_a_windfall) (the Bogleheads community is _great_ )

2) Read this book: [https://www.amazon.com/Investors-Manifesto-Prosperity- Armage...](https://www.amazon.com/Investors-Manifesto-Prosperity-Armageddon- Everything-ebook/dp/B002U3CBY8) (or anything else by Bernstein, for that matter)

3) Try to steer clear of people/firms who want to manage your money for a hefty percentage fee. They're one step above crooks, sometimes not even. In the wise words of John Bogle, "you get what you don't pay for."

Good luck, and congratulations!

<comment><AUTHOR> Very familiar w/ Bogleheads and agree that it's a great resource. Will check out the book.

The advisor I'm looking at is 0.35%-0.7% depending on lots of things. Is that 'hefty?' The Bogleheads mentality is certainly that one can do it themselves. I'd like to believe that this particular RIA is plugged in to certain investment opportunities, but not sure it's worth the risk. If I did do that, I might allocate 10% of post-tax money to speculative things like private investments etc.

<comment><USER23> From what I understand, private funds, especially hedge funds traditionally charge 2% of assets under management and 20% of profit.

As far as financial advisors go, that doesn't sound insane, but remember if the advisor is investing your money into mutual funds, etfs, private equity, or hedge funds, those will each charge a nice fee on top of that seemingly small .35%.

<comment><AUTHOR> Good point. However, as I understand it Vanguard's funds have < 0.2% management fee, so hopefully smaller than .35, e.g. [https://investor.vanguard.com/etf/fees](https://investor.vanguard.com/etf/fees)

But you're right. If manager charges 0.5% and fund charges 0.2% I'm still losing 0.5% of principal and 0.2% of my gains per year.

I don't see a reason for hedge funds. In my mind those are folks who have a proprietary edge on the market due to location, information, or experience.

To me, private equity ("PE") are folks who know how to reshape companies.

I spent a fair bit of time working w/ and for and sort of as a VC - that is a fun lifestyle but their risk adjusted and fee adjusted return is not impressive:

[http://www.industryventures.com/2017/02/07/the-venture- capit...](http://www.industryventures.com/2017/02/07/the-venture-capital-risk- and-return-matrix/)

The weighted average of table "Early Stage Venture Returns" shows about 2.5X on money with an assumed period of 10 years.

That's about 10%. When I invested $400k in venture capital in 2000 [timing...] it was worth $250k total return by 2018 - so not as great.

<comment><USER23> This is true about vanguard fees being low. Ideally your advisor would only use Vanguard, but if they try to get you diversified into more exotic etfs or mutual funds, expect to pay a fee closer to 1% to be invested in that fund.

> But you're right. If manager charges 0.5% and fund charges 0.2% I'm still > losing 0.5% of principal and 0.2% of my gains per year.

Be careful with your math here. It sounds to me like you think .2% fee is only on gains, however it also it on your principal.

Here is a concrete example.

You hire an advisor at .35% per year. In one scenario, they invest you in Vanguard S&P 500 for .04% a year. You will pay .39% a year of your principal in fees. In another scenario they invest you in a hedge fund fully, where the hedge fund charges 2% on principal and 20% on gains.

Here you will end up paying 2.35% per year, EVEN if you are losing money. And if you gain money. The hedge fund will take 20% from that. So best case you are paying 2.35% in principal fees, and pocketing 80% of the profit. Worst case, you pay 2.35% to lose money.

Two extremes of the fee spectrum, so likely you will end up somewhere between the two.

Be wary if you advisor tries to push you away from Vanguard and into a different brand (they can have incentives that don't perfectly align with you). For instance A Charles Schwab advisor might push you to use a Charles Schwab branded s and p Mutual fund with .25% fee on top of his .35% fee. When the actual fund is exactly the same as the Vanguard one that is only .04% fee.

<comment><AUTHOR> You raise a good point, I am wrong you are right. Of course the costs are on the entire principal, thank you for correcting me.

Investing in PE/Hedge/VC again is not likely for me. So I agree, with an advisor at .35% and vanguard at 0.04% - it's .39% per year. With 10M invested in VSTAX under these numbers, maybe it gains 4% but i pay out .39 or almost 10% of the gains. Far better than the 2% - but we are on the same page.

Agree that the advisors can have misaligned incentives - I trust the two I'm working with though based on relationships who trust them, so I'm fairly certain they are altruistic, a bit.

By the way, really good podcast on Hidden Forces with Ben Hunt for Demetri Kofinas about the "awesome renumeration" for money advisors, as long as you're right :)

</comment></comment></comment></comment></comment></comment><comment><USER24> Much financial good advice here. Let me give you some life advice.

Cut the sugar. I presume you are American and your entire culture pretty much made you a sugar addict so this will be hard but do it. Your health depends on it. Yes, all diet advice is suspect but this is not: stop eating anything with refined sugar and high fructose corn syrup in it. With much less money than that you can already afford to hire a chef if you don't like cooking/baking.

Slow down. Destress. Learn to enjoy for real a fresh, local strawberry. Enjoy every bite. Grab a book, read on the beach at sunset. These things won't take a lot of time but now you can afford that little time and you don't need to stress on your next mortage payment, job etc so you can really enjoy these moments.

<comment><AUTHOR> agree. now that the pressure isn't there to get cash/retirement taken care of, it is a great idea to invest more time and energy into diet, exercise and health!

</comment></comment><comment><USER25> I got some hot cash several years ago unintentionally. After that, I set up 3 goals:

1\. Maintain high quality life

2\. Improve skills for my career

3\. Meet more interesting friends

With these three goals, I did these:

1\. Maintain high quality life

      1.1. I bought myself a lot of insurance, both financial and life
      1.2. One nice apartment
      1.3. Put about 20% to some low risk fund

2\. Improve skills for my career

      2.1. Best keyboard, chairs and ... as a developer
      2.2. Books
      2.3. Donate some open source projects and make friends with contributors

3\. Meet more interesting friends

      3.1. Host regular meetups of great developers in China
      3.2. Go to a nice gym as I find people who work out hard and keep self-discipline are normally class-a players
      3.3. Get much more opportunities when focusing on what's next than what you're paid

<comment><USER26> These are all things you can (and should) do on a regular software engineer's salary, don't need to wait for a $5m windfall.

<comment><USER11> Depends on what regular software engineers in that area make. I had to basically sell a startup to afford a nice computer desk and chair, lol.

</comment></comment></comment><comment><USER27> I'll just leave this here: [https://www.reddit.com/r/AskReddit/comments/24vzgl/you_just_...](https://www.reddit.com/r/AskReddit/comments/24vzgl/you_just_won_a_656_million_dollar_lottery_what_do/chba5nw/).

<comment><USER28> The parent did not market this link enough but OP please read it! Especially if you are not already on your path to financial independence or not really bothered with investments.

This is a writing about people suddenly got money and how they got destroyed by it and how can you avoid it. What can happen in your family because of it. How and why to be quiet about your wealth.

Entertaining and great read and always the first thing I remember when somebody wishes for a jackpot.

<comment><USER27> You're right, I could have done a better job explaining what this is about. Thanks for doing that part for me!

</comment></comment></comment><comment><USER29> It depends on your goals and lifestyle.

$5mm+ is tremendous. Could last you a lifetime. You could try an annuity. Pop this formula into Excel or Google Sheets: =pmt(3%/12,50*12,5000000). A very conservative 3% annual growth rate can afford you $16k in monthly withdrawals for 50 years. The downside is, of course, you'll be drawing down on your wealth til zero.

Purchasing real estate for the rental income can yield more attractive returns. First off, you can leverage yourself up. Then cash-on-cash returns - in well selected locations - could be in excess of 10% (easily). Your principle in real estate is afforded some level of protection and may even grow as the economy and country grows ..standard investing caveats apply.

</comment><comment><USER30> Some good tips about managing a windfall from the Bogleheads froum.

[https://www.bogleheads.org/wiki/Managing_a_windfall](https://www.bogleheads.org/wiki/Managing_a_windfall)

With that amount of money, you're set for fatFIRE as well.

[https://www.reddit.com/r/fatFIRE/](https://www.reddit.com/r/fatFIRE/)

<comment><USER7> > [https://www.reddit.com/r/fatFIRE/](https://www.reddit.com/r/fatFIRE/)

Thanks - fatFIRE is a great reading recommendation. FatFIRE stories are insightful and help to re-evaluate my goals.

</comment></comment><comment><USER31> First off, unless you were really early, you are going to need about 1.5-2M of that for taxes, so plan for that.

That said, I put the remainder of a similar outcome in 60% stocks (VTI 75% + VEA 25%) and 40% short term bonds (VCSH). The stocks give you growth and the bonds give you stability. Rebalance this once a year and you are done. You are financial secure. Don't get sucked into crazy complicated schemes - <USER3> and more diverse is better

</comment><comment><USER11> * bought an Alienware, work chair, and 4K monitor (for work purposes I swear)

* spent about 20k renovating a home office

* subscribed to Joox/Spotify and purchased all the games I once pirated

* donated 10% to charity

* gave a fat envelope full of cash to my wife (she was so shocked that she suspected me of having an affair)

* gave money to my mom

* bought bitcoin and other crypto

* got a will done because bitcoin isn't covered by inheritance laws (also for religious reasons)

* considered investing into a restaurant, but it was too much work

* invested most of the rest into startups which all failed

* paid for funeral fees for dead companies when partners passed the ball

* looked for a job after burning through it all

<comment><USER32> Would you do it this way again?

<comment><USER11> Background story: did a startup as a CEO+CTO. 100 hours a week, mostly because I had to play two roles. It seemed easier to find a CEO than CTO.

So we were burnt out. Sold the startup. Made 750% ROI in a year, which is a good investment. Planned to reinvest that money into startups for maybe even a 300% ROI.

The plan was to go CTO route and rely on someone else to play CEO.

It didn't work out - most people were decent at business skills, but terrible with product. Some could build a million dollar traditional business, but couldn't make it in the startup space - they were too cautious, too scared of committing, or wanted passive income. There people with sales experience, who are great at forming strategic partnerships with big corporations, but don't dare talk to the customer.

So that was a mess. I regret expecting others to do well when given the trust and opportunity, even if they had done well in the past. I regret following logic over instinct, and following people who were not "animals" like Paul Graham suggested.

I'm working on a startup now, but it's the unsexy idea I had 3 years ago. At least I get full control over product and customer development.

<comment><AUTHOR> Betting on the come with all the winnings is dangerous. Sorry you lost things. Good to put some away for sure.

Glad you are working on something you enjoy and have the level of control you're looking for!

</comment></comment></comment></comment><comment><USER33> The standard advice that is recommended for windfall recipients is to stash it in a savings account and sit on it for 3 months. The goal is to avoid making any rash decisions based on euphoria.

You can use that time to read some books on wealth management. Two classics are The Four Pillars of Investing and The Bogleheads' Guide to Investing:

[https://www.amazon.com/Four-Pillars-Investing-Building- Portf...](https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio- ebook/dp/B0041842TW)

[https://www.amazon.com/Bogleheads-Guide-Investing-Taylor- Lar...](https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore- ebook/dp/B00JUV01RW)

It is also a good idea to not tell anyone, unless you want to be bombarded by requests from family and friends for loans, invitations to invest in weird ideas/schemes, and so forth.

</comment><comment><USER34> First of all congratulations. The great thing about being rich is that you only need to get rich once, then you need to preserve it.

I'll focus my comment about things often overlooked:

Insurance. Medical, home, car, and umbrella insurance. KEEP GOOD MEDICAL INSURANCE.

Work hard on your privacy. People with deep pockets are juicy targets for lawsuits. Start an LLC (with a name not associated with you) and transfer things like real estate to it.

Investments: there are tax-free investments such as muni bonds. Invest in rental properties (under your llc). There's no shame in sticking a bunch of money into an S&P 500 index fund. Capital gains are wonderful.

When you speak with an accountant, tell them specifically you're interested in tax deferment and protection strategies.

For your children's education: look into front-loading their 529 plans.

If your accountant doesn't mention this type of stuff then find another.

<comment><AUTHOR> agreed re keeping it is harder than making it. Made a fair bit in the past and didn't keep it.

Agree re: insurance - raised umbrella to +$3M and car to $1M. Perhaps raise home though umbrella helps that?

Agree re: tax optimizing.

For 529 front loading, there's apparently a way to do a 5 year- averaging that allows you to put 6 year's worth of 529 in. In my state a certain amount is tax deductible, so I'll factor this in.

Accountants seem good at calculating - not so good at ideas. I'm expecting my RIA/Advisor will help here, but I'm on a track consistent with what you've said - thanks!

</comment></comment><comment><USER35> I have not gotten quite that lucky, but still lucky to catch a unicorn early enough to have gotten to ~1m at a youngish age.

Have you actually liquidated the funds? Or is that the value of your stock? I think a more interesting question for this audience is what to do when you have pre-IPO "unicorn" shares. On one hand, if you wait til IPO there may be a big "pop". OTOH, it could drop below what it's trading at in private markets. I think about diversification a lot too.

I haven't felt the need to hire a professional at this point, just put most of my liquid NW into a robo advisor (I use the Schwab one) and forget about it.

</comment><comment><USER36> I went through it all in less than 2 years and ended up hoarding the things I enjoy very much to this date. I have no regrets (never), coming into millions in thirties is an incredible life experience and the vacations, scotches, watches, cars, homes and other toys are all things I have enjoyed very very much. I also learned to buy forever things which has changed how I see consumption completely. It also led to some amazing opportunities to meet very interesting people in strange places. Overall, I cannot emphasize how much fun it is to spend a few million dollars in 12-18 months without being fixated with savings.

<comment><USER37> > Overall, I cannot emphasize how much fun it is to spend a few million > dollars in 12-18 months without being fixated with savings.

Not sure if I understand you right, so I'll just ask.

Did you just spend your millions? And you still presumably have to work?

<comment><AUTHOR> I'm not the poster, but in my case, I don't plan to spend the Millions, I absolutely plan to work. You might have some folks working you worth >$20M if you work in Silicon Valley.

</comment></comment></comment><comment><USER38> Not exactly the same, but here's the advice for if you win the lottery: [https://www.forbes.com/sites/deborahljacobs/2012/02/11/10-th...](https://www.forbes.com/sites/deborahljacobs/2012/02/11/10-things- to-do-when-you-win-the-powerball/#106f4e037755)

Much of it involves don't make big lifestyle changes, invest smartly, get lawyers/financial planners together to protect yourself, and pay off any debt you have.

</comment><comment><USER39> Welcome to the world of high consequence tax filing! As you may already know, penalty severity for tax mistakes are pegged to the dollar amount. This includes very large fines and possible prison time for "willfully" incorrect taxes, or not disclosing a foreign bank account, for example. I read the tax code, and do my own taxes first. Then send them to an accountant for verification and filing.

</comment><comment><USER40> I like this finance website. Some of the advice surrounds improving your financial standing, but much of it is just about how to live well, and how money does and doesn't play into that.

[https://www.mrmoneymustache.com/blog/](https://www.mrmoneymustache.com/blog/)

</comment><comment><USER41> Almost a decade ago I made a similar amount in an IPO event being an early employee.

Company of said IPO dropped fairly hard in less than a year (you may be able to guess which one). I'm still not poor by any means but seeing $5~6M turn into $1~1.5M doesn't feel great. Especially since, $5M is retirement money, and $1M is not, so I was literally looking at myself going from being able to retire to not being able to retire.

My advice would be that if this asset of yours could be volatile at all by any means (e.g. is a stock of your employer or even your own company), liquidate and diversify as much as possible as soon as possible.

Then do everything else that everyone else on this thread said about investing, insurance, etc.

(using throwaway because my main account is somewhat recognizable)

<comment><AUTHOR> I agree with you. I'm trying to decide how quickly to diversify, and also if I want to buy stock for LTCG (conclusion, I don't).

Agree - 'life' money change to 'car' money is disheartening.

Good perspective, thanks!

</comment></comment><comment><USER42> It was an order of magnitude or two less but: Stopped chasing external jobs. Started working on aggressively non-commercial personal projects while living simply. My main splurging has been that my laptop upgrade cycle got faster than every five years for a little while.

Also a couple of cross country moves, once to Seattle because I missed the west coast and it was a compromise my SOs would make, then back home to New Orleans because Seattle's cost of living was skyrocketing and I missed the sun and wanted to live somewhere I could pay the rent with what I make off those personal projects.

</comment><comment><USER43> I have a friend who received a similar windfall at a young age. He bought multiple super cars for himself, paid off his parents mortgage, bought his sister and girlfriend a high end SUV, bought a house, spent a lot partying for two years, then invested most of it in a new business that is struggling. He's renting out his supercars now. He told me that it's not as much as you think and it's not easy to reproduce that kind of result.

</comment><comment><USER44> I don't have personal experience with a windfall of that size, but I've found that Bogleheads usually has decent advice: [https://www.bogleheads.org/wiki/Managing_a_windfall](https://www.bogleheads.org/wiki/Managing_a_windfall)

</comment><comment><USER45> There is some really good basic guidance on dealing with windfalls, available on Reddit's personalfinance board: [https://old.reddit.com/r/personalfinance/wiki/windfall](https://old.reddit.com/r/personalfinance/wiki/windfall)

I recommend you read it all and take some time to digest it.

Don't do anything rash -- in fact, don't rush to do anything right away unless it's necessary. Necessary things include:

* Figuring out what your tax obligations are.

\- You should get someone to recommend you a competent CPA who has dealt with this situation before. You want someone who will proactively help you sort out your tax situation starting NOW, not wait until tax time. But I would _not_ suggest a "wealth manager", or even a "financial advisor" at least to start with -- find someone who will just help you with the immediate tax consequences, and who will deal with you on a flat-fee basis with price given up front. A competent CPA should probably be able to handle this on a bare- bones basis for less than $1000, but _if_ you can get someone who comes highly-recommended and has significant experience with the specific issues you're facing, and can help you navigate the situation, paying a small multiple of that for more good advice won't kill you.

\- Note that you are going to owe estimated taxes, which need to be paid quarter-by-quarter, not at tax time. At the federal level, you will not be subject to penalties, regardless of your income this year, as long as you prepay (in payroll withholding plus estimated tax payments) 110% of _last year's_ tax obligation. However, if you are in the state of California there is no such safe harbor for _state_ taxes if your income exceeds $1 million in a given year (which it will). (See [https://www.bdcocpa.com/resources/articles/43](https://www.bdcocpa.com/resources/articles/43) .) So make sure you pay California estimated taxes as promptly as you can manage. (But also, don't panic if you end up being charged penalties. For stuff like this (i.e. not fraud) they are generally quite small relative to the amount of taxes owed, especially if you aren't that late.)

* Figuring out your liquidity situation:

\- Are you getting the money in cash, or liquid securities (i.e. that you will be able to sell easily), or illiquid securities (i.e. that you cannot reliably sell?) If your employer has been thoughtful towards you, you won't be in the third situation, which can be very messy come tax time. (If you are in that situation, there are people who can help advise you, but you'll want to start thinking _now_ about how you'll pay the taxes.)

\- If you're getting securities (i.e. stock shares) that come to you in some sort of brokerage account, it's fine to _leave them there_ while you decide your next steps. Make sure you're able to sell enough to cover your tax bill, but you don't need to actually sell anything until you discuss it with your tax advisor.

\- If you're getting cash, you will probably want to open a brokerage account to put it in (don't stick it in your checking account.) Charles Schwab and Fidelity are fine general-purpose brokers. Vanguard is good if your plan is to invest the money in low-fee index funds and then not touch it, which is generally a wise idea.

<comment><USER45> Oh, and don't post all over the internet about it. ;-) But I see you're using a throwaway, which is a smart move. As the reddit PF link will also tell you, don't go around telling everybody about it. In fact, for now don't tell anybody but your spouse (if applicable) and your tax advisor. You can always tell people later, but you can never un-tell someone. You'd be surprised (or not) at how people can get when huge sums of money are at stake. Even if people know you are getting an IPO windfall (or what have you), be vague and downplay the amount. Don't promise anybody anything. This goes 10x if they are asking you to.

<comment><USER46> > for now don't tell anybody but your spouse

Depends. One could not mention it at all, and spend their 9-5 at a some-what serious fictitious company where you work on your dreams, but 50% of the time just hang out with your best friends.

But if your story leaked, it probably wouldn't go over as well if your spouse was going to a difficult job every day.

<comment><USER47> I'm going to assume you're not married. That's a horrible idea.

</comment></comment></comment></comment><comment><USER48> Nothing spectacular: Pay off flat mortgage & rent it off, build a house in the neighborhood (parcel prices gone crazy here now), buy a new second car (nothing fancy, like some Renault or other) and keep living as nothing happened (work, but less stressful etc.) Maybe I would also buy 1 or 2 small flats to rent near the university at nearest city etc.

<comment><AUTHOR> How has the real estate investment turned out?

</comment></comment><comment><USER15> I am moderately successful, and thankfully I have accumulated some wealth over the years, as opposed to a single big hit like in your case. Despite I can't claim to be rich, I have been fascinated by understanding how to manage my money better, and hopefully I can offer some advice here.

In random order:

1) Take it slowly. You don't need to rush into investing, buying stuff, getting a new house, etc, all in two weeks. Slow, thoughtful decisions will usually be better than rushed ones.

2) If you are not financially literate, try reading some good books on the subject, and IMHO, not necessarily the most popular ones. Picking the right ones is NOT easy. There are several lists of "best financial books" or "best personal finance books", and reality is that you should read 15-20, and stick to the 2-3 that you really liked.

Financial literacy will allow you to take much more informed decisions about everything.

3) Depending on your age, where you live, and if you have kids or not, you might want to consider "estate planning", a broad category that includes, among other things, establishing "trusts" (legal entities) or similar and granting some amount of money to the trust, in order to get some tax advantage, and clarify what's going to happen to that money when you will eventually die of very very old age.

4) If you know a few friends who are also rich, talk to them and ask them to share their experience with you.

5) Don't tell others about your wealth, or don't be too specific about how much you have. A >$5M wealth creates issues, and provides strong incentives for people to try to manipulate you.

6) If you are married, share this burden with your spouse - I think it's a good idea to keep her posted, to tell him/her NOT to share too many details with friends and family, and possibly to get both of you financially literate.

7) There's a lot of BS around. Be very wary of any advice, including mine. (especially mine!) Be really, really skeptical about any claim by anybody. Remember there's no free lunch out there.

If you are considering investing in a 12% guaranteed annual return, well, let me tell you, it doesn't exist on Earth (both guaranteed and 12% together).

As a rule of thumb, take inflation + GDP * (1 - long term capital gain taxation) as the threshold beyond which you should start to be wary of any claim.

For US, currently: 1.6% inflation + 3.10% GDP[0] * ~0.75 = 3.92%, which means: any investment that is both guaranteed and above a 4% annual return, you should start being skeptical.

8) Try to invest in things that you understand well, or otherwise try to invest in things that are tax-optimized and dumb-proof (e.g. investing in an index is relatively simple to understand, can be done in a tax-smart way).

9) understand diversification. Key to this is that diversification should apply to your goal in life, and your risk-aversion. E.g. if you're 25, you might want to take a bit more risk, as riskier bets tend to pay slightly better over the long run, if you can take several of them (because comparatively less people are willing to play in risky territory). If you are 55, you might want to settle with a more conservative approach. Etc.

10) Big mistakes are usually made when investing in real estate. Try to separate the "emotional", irrational purchase of your main home, with the "investment" part. I wrote about the "rent vs buy" dilemma last year, it might be a useful read to get started. [1].

Finally, if you want this money to make you happier, the thing is, it probably won't, unless you're really really disciplined about it. Mae West used to say "Money isn't everything, if you have it". Once your basic needs are met, it's very hard to use money properly to be happier over a long period of time.

I personally try not to obsess too much about money, I try to use it to buy me "time" more than anything else, and I also try to use it to relieve me from issues that would make me anxious. I also try to remember that I won't bring any money with me in my grave. I am not great at doing all of this, but I keep trying.

Hope this helped.

[0]: [https://tradingeconomics.com/united- states/gdp](https://tradingeconomics.com/united-states/gdp)

[1]: [https://medium.com/fabrica/the-rent-versus-buy- dilemma-12-im...](https://medium.com/fabrica/the-rent-versus-buy- dilemma-12-important-questions-5f5a7d1815f)

<comment><AUTHOR> 1) Slowly makes sense but I need to diversify - which I probably will do more quickly than slowly.

2) I'm fairly literate financially but need more depth and breadth.

3) Revocable trust and wills are in the works.

4) Asked friends for recommendations, agreed!

5) Agree. I've told one person (outside of work folks who are in the same situation) and that was a mistake.

6) Spouse is fully informed and has delegated all decisions to me. Oooof.

7) Good advice re: expected safe return!

8) Agree investing in simple things. Investing in America or the World with a diversified portfolio makes sense.

9) agree with diversification and risk tolerance as a function of dynamic market.

10) Real estate seems fun but not really - too many societal changes and troublesome renters.

Good point that you 'can't take it it with you' \- interesting to see that as an actual issue to deal with.

Great input - thanks!

<comment><USER15> Happy to have helped. Good luck. :)

</comment></comment></comment><comment><USER49> When did you join the company? What percentage did you own? That's a nice payday, congrats.

</comment><comment><USER50> Keep in mind that you almost certainly now need to pay taxes 4x/year because your taxable income just jumped by a significant amount this year. Get an accountant to make sure to avoid paying $1000s in IRS penalties for underpayment

</comment><comment><USER51> Move to Ireland for 2 years to become a resident, there you only pay 10% tax over the capital gain if you meet the "entrepeneur relief" criteria. Not sure if this works as a US citizen, but works for many.

<comment><USER52> I'm upset by this. Why is it paying taxes so repelling after you acquire wealth?

<comment><AUTHOR> 3 Reasons:

1\. The taxes wealthy people pay is both higher in amount and higher in percentage that non-wealthy folks.

2\. The way the tax money is spent is inefficient

3\. Because it is legal to minimize taxes, and to waste money is bad.

Lots of wealthy people are charitable. It's preferred to spend money through charity versus give it to the government to spend in their preferred way, which can often include buying votes.

</comment></comment></comment><comment><USER53> Couple of years ago, Big payout:

\- Paid / Allocated money for all taxes

\- Legal tax evasion planning for future, a lot planning prior to transaction, I don't want to give $1-10M in tax. I would rather move to a country that I can avoid tax completely or lower it significantly. There is no country in the world that's worth paying $5M extra to just to live IMHO.

\- Separated wealth into multiple banks and 2 countries (reduce risk of investment)

\- Went to an expensive holiday and flew first class for the first time :)

\- Bought a lot hardware, treat myself with simple things. Like hobby hardware, cutting edge hardware. I realized buying an expensive car cost $300K buying hundreds of hobby stuff doesn't even cost $50K and brings me more joy. I was a nerd I guess now I'm just a rich nerd.

\- Helped relatives a lot, just gave plenty of money

\- A lot of Sadakah (charity) & Zakah (mandatory in Islam, 2.5% of _wealth_ goes to poor every year)

\- Invested a lot in real estate, all in cash. Safe long term investments (if you know what you are doing, I have family who does this)

\- Invested in 4 companies. 2 early stage tech companies and 1 brick and mortar old school business. 2 are very risky and expected to give a return in 5-10 years, if any. Many countries

\- I'm going to give a very unpopular advice, spend your money. I mean really spend it. I'm not saying burn it (i.e. parties, private jet and yacht) but spend it on stuff that makes your daily life better with the right economical balance. For example fly in first class but don't get a private jet.

\- Put something like $2M cash aside, for whatever the future brings

Most satisfying thing I've done was to help less fortunate. To me $0.5M is couple of percentages in a rich person's increasing wealth but splitting that money to tons of people in 3rd world countries means hundreds of people's live will be so much better. If I were to spend it for myself my life quality might have gotten better by 2% but spending that for other people means hundreds (or even thousands) of people's lives will be 20-100% or infinitely better. (What's the % of life quality improvement when you can start drinking healthy water? or afford food?). Did you know $30 can make someone see again through cataract surgery? [0] When I learned it kind of shocked me and made me question my life and where I spend my money.

AMA about charity :) And if you hit jackpot please go and help someone unfortunate, I don't mean someone who cannot afford a new iPad for uni, I mean someone who cannot afford food, clean water, or life changing operation. Think about numbers and efficiency before doing charity and deciding where that money goes.

P.S. I'm a Muslim therefore I don't use interest. Which means majority of the traditional investment models don't work for me. That's why I invest a lot in real estate and businesses (who doesn't use interest) rather than stock market, funds, bonds etc.

[0] [https://www.cbmuk.org.uk/get- involved/donate/](https://www.cbmuk.org.uk/get-involved/donate/)

<comment><USER11> Muslim here. Interesting to hear. I had to avoid a lot of investments, because they weren't so clean. Forex felt like gambling, and many options felt like riba/usury.

Real estate seemed a bit off. Lots of friends would take huge loans and rent it out for a little more than what they were paying in bank loans; also felt like usury. But it should be fine if you've paid it all in cash.

Probably the big thing I regretted was spending about a year and a lot of cash on a startup which partly donated to temples. Made me realize that wealth really comes from Allah.

<comment><USER54> > Probably the big thing I regretted was spending about a year and a lot of > cash on a startup which partly donated to temples. Made me realize that > wealth really comes from Allah.

Could you elaborate what your regret was in this case? I'm confused and don't quite understand what you mean by this.

<comment><USER11> There's a long story behind this.

One of the fundamentals of Islam is to worship Allah alone, and only ask help from Allah alone. The second part is extremely difficult - it's easy to just assume that wealth comes from clever financial planning, hard work, or that knowledge comes from a mentor. But this is egoistic. Especially when you've gone moderately rich off a crazy gamble, you're more likely to dismiss God's role in answering prayers.

The story was that someone proposed a startup with some sinful attributes. Think of it as sort of like working for Playboy - you can justify to yourself that you're just taking a supporting role, more interested in the tech, the culture, the articles, could do some good with the money, etc, etc. But the core purpose is still sinful.

The plan seemed foolproof. There were contingencies. If the plan failed, I'd still make $X. If it failed really hard, I could bring the code I wrote back to another startup I was a director of.

But everything went wrong. The team was horribly incompetent, and couldn't dedicate any time. My backup plans fell apart. People who I trusted backed out. The whole thing was depressing, and I found it hard to get any work done, despite my best efforts and ability.

I went in thinking that I had the resources and experience to no longer need to rely on God (or luck), and was proven wrong.

</comment></comment></comment></comment><comment><USER55> I'm not in this position, I've thought a fair bit about it since it's in the realm of possibility. This is what I'd like to believe I would do:

Buy 30yr Treasury Bonds with enough of the cash to generate ~$200K/year passively for the next 30 years.

Then proceed to continue my normal life. I'd treat the extra income from the bonds like a raise, invest it smartly, buy things as I would normally. Except now I have an immense buffer to stop current work and/or the freedom to pursue other interests.

But I wouldn't change anything in the first year of such a cash influx.

<comment><USER56> Wait. You'll need closer to $8 million invested at 2.57% (30 yr current yield) to earn $200,000 a year. And consuming that every year means you'll destroy much of the real value of your hoard over 30 years (you're not reinvesting something to cover inflation). Further putting it all into Treasuries is actually riskier than diversifying across multiple assets - foreign stocks, real estate, etc. If we go into an inflationary period and you're locked into a 30 year at 2.6%, you'll watch your fortune collapse and your stipend's buying power crumble.

</comment></comment><comment><USER57> I was in a somewhat similar circumstance via a very large inheritance. I'll start from the emotional side of things before moving into the financial side.

Emotionally, I was very shocked as I did not see this situation coming. Like you, I was also scared about making stupid choices. You probably had some idea that your shares had upside potential, but the money I received dropped into my lap with no warning and was approximately the same amount as what you received. My immediate advice is...do nothing. Wait for the shock to wear off and for you to acclimate to the situation. Don't tell anyone, don't run out and buy things, don't move assets; just keep on with your day to day life until you are ready to proceed.

Based on the fact that you are here asking these questions at all, my assumption is that the money likely will not change you much as a person. I still have the same friends and relationships that I had before I received my funds; my values are still the same; I'm still the same person. Most people who interact with me have no idea that I am as wealthy as I am. Who you were before you receive your money will largely be who you are now that you have received your money.

Economically, my general spending patterns have remained largely the same. The main thing I've found is that money is less about buying stuff (which I think is how most people without money view money) and more about buying time, cutting through bullshit, buying access, and creating opportunity. I feel much more free to spend money on education, conferences, vacations with my loved ones and friends, once in a lifetime opportunities etc. I'd encourage you to think about your funds this way too depending on your circumstances as I think it brings a lot more happiness than buying tons of shit you don't really need, a big house, cars etc. I'm not saying you need to live a frugal life, but I think excessive consumption gets boring quickly. You have "fuck you" money which gives you enormous power over how you craft your career and your life. Think hard about what you want to do. I still work but I've had the flexibility to explore career arcs that I would not have otherwise been able to with almost no risk.

I would be very careful about telling other people about your situation because it might alter your relationships. I think it's fine to say you are doing well at work, but definitely do not tell people you have 5 million dollars. You don't want people feeling jealous, resentful, etc. It can be helpful to have other wealthy people to talk to about issues and feelings. If other people you trust have money, feel free to talk to them. Alternatively, there are certain places that generally cater to the wealthy (eg social or country clubs, business associations, etc) where you can meet some people who will be in similar circumstances and will be happy to talk.

Moving on to what to do. I don't know how old you are or what your future earning potential is (meaning is there another chance for a payout this size), but in general what you do with five million dollars will not be dramatically different than what you do with a few hundred thousand dollars. I would seek out a wealth management group for a consultation. Make sure this entity is a fiduciary and are legally obligated to act in your best interest.

If you don't think you have more big payouts coming your way, then your strategy will likely focus on wealth preservation. If you think you can make more money you can be more aggressive. Either way, you will probably construct a well balanced portfolio of low cost index funds. Depending on your risk and needs, you could devote a portion of your portfolio to more exotic things like hedge funds or private equity or whatever. See what they say.

You have generational wealth, so if you have kids or are thinking about kids, you need to focus on general tax minimization and avoiding inheritance taxes (within the law of course). There are a variety of strategies that can be employed here, and a good wealth management firm can help you with that. You also need to think about how you will teach your kids about money given your new situation so that they have the right values.

<comment><AUTHOR> That's very kind of you to suggest it won't change me. I hope you're right and expect you are.

Totally love the idea about buying time. Not entirely clear about what to buy access for, but I'll ponder that.

Agree re: confidentiality. Age is 40, and expect to work for another 5-20 years or more.

Working w/ an RIA so things should be good there, totally agree they must be fiduciary.

Agree long term planning; not exactly sure that giving kids money is a great idea. Perhaps some/all college and help w/ house down payment - but life is a struggle (jihad - I'm not Muslim but that's the analogy I use). Agree learning how to teach them is a good goal! The Silver Spoon book looks good for that!

</comment></comment><comment><USER58> I wake up

</comment><comment><USER59> As everyone has said, the first thing to do is nothing. Well, that's not exactly right. You may think "No sweat, I'm in no rush to spend it" but recognize that most people that go broke... from bad investments. There's no dumber way to lose your money than investing in some stock that sounds good or becoming an angel investor or buying a bunch of rental properties or whatever "safer than the bank" idea you have right away.

Ok, that's easy enough... but pretty quickly you will realize that money is ALWAYS invested, whatever you do with it. Keep it in cash? Ok, you are investing in the U.S. dollar. And where should you put your pile of cash? FDIC only insures bank accounts up to $250k, so if someone grabs your login most of your money is just gone.

So it needs to go somewhere - index funds, CDs, mutual funds, etc. There are a lot of boring options with minimal differences and most financial advisers will encourage you to diversify money all over the place. I know some investment bankers and they say most of their high-end clients are more focused on trying not to lose money than make it with investing, so there is a very well-trod path to doing all this. Recognize that diversifying rarely protects you much from a sudden market downturn (check out 2008) as the economic engine is pretty well intertwined, so there is no need to go nuts trying to spread money everywhere.

Another reason to keep your diversification simple: pay close attention to the vig (the cut going to an adviser/investment vehicle). Not all index funds are the same and certainly not all financial advisers all the same. Especially when trying to be safe with money, too much can be scraped off by advisers. Flat fees are best for what you want, or you can do some research and do it yourself with some help from your bank. If you want to keep things basic for a while without any fuss, talk to an investment bank (like Schwab) and ask them to walk you through a simple distribution with cash equivalents and index funds. You can always adjust things later but please don't let your cash just sit in an under-insured deposit/savings account.

If you do feel the need to invest in stocks/business, read Warren Buffett's advice and make slow moves - a good rule of thumb is if you invest in a thing, make sure you would be comfortable if you couldn't touch it for 5 years. Anything less is not an investment but a gamble.

In CA, I also recommend umbrella insurance, not sure how it works elsewhere. The idea is if someone slips on your staircase and breaks their butt they could theoretically sue you for all your money - umbrella insurance covers your from that and most other things. Take small protective measures from unlikely but cataclysmic losses.

Finally, what to actually spend money on? There is one thing I read that has proven true at any price point: spend money on things that improve your everyday life. That might be getting something pricey for what it is, like an Ember mug that keeps your coffee warm, or something bigger like moving closer to work so you have an easier commute and gain more free time.

<comment><AUTHOR> I love the Ember idea! Agree on the vig! If I'm making 5% and they get 2% well that's just not fair!

Umbrella is looking good.

Great input, thanks!

</comment></comment><comment><USER60> I woke up, and realized that I was actually still poor.

</comment><comment><USER61> buy land get farming secure your food & home relax

</comment><comment><USER62> Bought myself a yacht

</comment><comment><USER63> Hey congrats man. Congrats.

</comment><comment><USER64> When this happened nothing changed, no Hollywood style lifestyle change happened for me.

I was still the same person, I took the money and invested some in SP500 and Tbills and bought a 20,000 sq ft land in India (my wife is from North India).

Started a business of branding and selling items in India (there is huge money to be made on Amazon India, you can't even find 10% of the inventory that's actually in the US)

<comment><AUTHOR> Wow that sounds super smart! Good for you!

</comment></comment><comment><USER65> Woke up

</comment><comment><USER66> You guys wanne be my friend? I need rich friends...

<comment><AUTHOR> At Buck's Restaurant in Woodside, CA there's a postcard on the wall (or there used to be) from a lady somewhere "else" who said since everyone there is wealthy - could they send her some money.

Let me ask you, shifto, if I can.. Why would you like to have, or as you say 'need' rich friends?

<comment><USER66> It was a tongue in cheek remark. I'm pretty well off as I at least have decent job in IT. I try and make life better for friends and family by spending my money. I just wonder how it would be to be on the receiving end of it all.

Also, my very rich friend will bootstrap my company no strings attached. He/she's the best! :)

</comment></comment></comment><comment><USER67> That's great, but when your great country brings the whole world to its knees, when the financial system collapses, all you have left is your eyes to cry. In the future, it will not be good to be too rich... Don't put your money in, buy a pair of air max to run fast;)</comment>


Ask HN: What can I expect to get out of an AI education? - <AUTHOR> I'm interested in learning about AI because I think it'd be cool to create something that is somewhat intelligent. That's what I'm hoping for. But I have a feeling that I'm going to end up getting a lot of abstract theory and only enough practical knowledge to create something basic like a recommender for related things on a website. So I'd really like to hear from other people who've done a masters or other specialization in AI:<p>What were you hoping for and what did you end up getting? <comment><USER2> I have no degree on AI, or any sort of specialization, apart from studying by myself. But I do work with AI, using different approaches and techniques. /disclaimer

My view of AI is that it is as complex as it is fascinating. It might seem easy to just download an artificial neural network library, feed data to it and then see what it spits back, but what data should you feed it? And you want it learn? Or should you use a genetic algorithm instead of neural networks?

Those seem like easy questions to answer with a handful of math formulas, but the formulas will help you more on giving you a firmer assessment on the scope of the solution space, how to measure if it is really progressing, when the AI is in learning plateaus, etc.

But the big reward is in how to creatively use AI. By "seeing" data in a new way you can ask different questions, and might get some interesting answers.

I'm telling you all this because my view on how and when to use AI evolves constantly to this days, and I've been working with it for about 7 years.

So start studying right now if you really like this field. Not only will the formal AI education become easier, but you will probably be able to get more from it if you get there with some experience.

</comment><comment><USER3> I have a Bachelor's degree in Computer Science, and I'm planning to complete my Master's degree in AI by September. Given what you just wrote I'm not sure following AI courses at a University would be best for you, since as you guess, there's lots of theory and not that much of practice.

In general, the practice you get is mostly related on the concepts -as in, implement this methods on abstract data and see how they work-, but the whole framework is setup so that you can in the end contribute to the advances in AI and develop new methods. If your goal is simply 'create something that is somewhat intelligent', I think you could easily read introductory books by yourself and implement existing methods. It would be a more efficient use of your time I believe.

In addition my particular Master was somewhat broad in scope, so that I learned something from very different fields (Computer Vision, Machine Learning, Decision Theoretic Control, Information Retrieval, Neural Networks..), but in the end I still don't feel specialized, and I'll probably (maybe not now, but after a couple of years' work) follow it up with a PHD.

</comment><comment><USER4> I can't pretend I have an advanced degree, or any degree actually, but I did attend college, and I have looked at a number of different university curricula. And I have been paying attention to the obvious headlines in artificial intelligence and artificial general intelligence.

The courses that I saw and discussion that I have had with post-graduates in AI or related fields is very different from the topics that were being promoted by AI headlines or at AGI conferences.

If you really care about having the most relevant skills and information, in this age of Google and other online search tools, you need to do research yourself. You are almost guaranteed to NOT get the latest and most relevant information if you limit yourself to the courses listed in some particular university catalogue. Certainly the researchers at those schools don't.

If you do a masters and let your thesis be dictated by whatever your professors think is relevant or that you should pursue, unless your professor is really working on the leading edge of something, you are unlikely to be there either.

</comment><comment><USER5> No masters or other degree but I've been interested in AI since the AI summer when LISP and Prolog were what the cool kids were wearing. At that point The pattern was already set. In 1962 a chess playing computer was an AI breakthrough. By 1987 I could buy a shrinkwrap chess game for my Amiga.

With time, today's AI comes to be seen as just clever programming and then ordinary programming like any other algorithm. 2012 saw computers which could beat any chess playing human in the world and the verdict was largely that success was due to how much hardware had been thrown at the problem not great AI.

That said, inference engines and logic programming and constraint networks are really fascinating and these days the tools and books are a web address and a modest download away.

Good luck.

</comment><comment><USER6> I'm curious as to what others got out of a masters in Comp Sci. I didn't study comp sci as an undergrad and sometimes feel like there are concepts I'm completely ignorant of. I wonder if a masters in Comp Sci leads toward being able to handle complicated application development.</comment>


Accelerating sustainable startups w/ a list of problems - <AUTHOR> Is there a maintained list of market-researched problems that exist in non-web-centric industries?
I'd love to see more web-based startups attack problems that businesses in industries like farming and forestry face instead of making more todo list phone apps.
Do lists like these exist? It'd be so awesome to point energetic students at something like this that came with librarians and domain experts to lead them on the right path to skipping having to wait to be inspired and hit with a knowingly-profitable/sustainable startup idea. <comment><USER2> Hi Edward,

I've asked myself the same question. My approach was data-driven and similar to what @sitkack recommends you.

I really like that people like you exist and ask questions like that. The only way to a better world imho.

I dislike @waxy's idea, because by putting a registration barrier he locks ideas. I've the picture of a kobold hiding a sack of gold, hehe =) Don't get me wrong, it's fun.

However, I was thinking that when I get enough data I can use prediction algorithms for future trends, add a list of common problems to the fields to be resolved. Then it should be possible to solve it using algorithms and input of people only. Those people would be the modifier for the algorithm, by telling their location specific problem with a question/answer game.

It should be possible to solve loghoritmically. You could ask people questions, similar to the iphone game that guesses which artist you think of by asking questions. log(2) 100 ~=7 (yes/no)

It could use Google-Trends/Google Prediction API or the new startup that google bought to forecast future trends.

I've chosen my last idea using that method. But I haven't written the algorithm down yet, so I followed it manually..

But the best way is to just go into a company and ask the CEO/Engineer/Developer/Worker questions and do so for as many componies as possible. Process that information into clean datasets and you can start to work with that. That's Business Intelligence.

hope it doesn't sound too mad. If so, just forgot what you read. :P

</comment><comment><USER3> We were trying to build one at <http://startups.org/ideas.html>, it's been going interesting i might say especially as everything that was added up till now was pure viral. We hope to see busier days though, we really want to do something good for the community out of it.

</comment><comment><USER4> Take the list of new YC companies and extrapolate what PG thinks is important. Might not have any bearing on reality, these startups are designed to get flipped so the goals of YC are different the larger body.</comment>


Scribnia, blogger recommendation engine, launches publicly - <AUTHOR> http://mashable.com/2009/06/08/scribnia/

<comment><AUTHOR> We'd love feedback from the HN community. Let me know what you think.

</comment><comment><USER2> The name is extremely close to Skribit.

<comment><AUTHOR> Too close, you think? It it closer than than Scribd?</comment></comment>


There's no such thing as a free watch (2017) - <AUTHOR> https://www.topic.com/there-s-no-such-thing-as-a-free-watch <comment><USER2> See also this spoof guide from the "watches" subreddit, "How to create a unique/successful minimalist watchbrand":

[https://imgur.com/a/6CNO8](https://imgur.com/a/6CNO8)

<comment><USER3> I wish it talked more about the actual logistics of manufacturing the watch. Is there a factory in china that will take your design and ship you a box of made watches?

I just might be tempted to make a limited run.

<comment><USER4> Check on Alibaba for something similar and contact the seller.

</comment></comment></comment><comment><USER5> This companies are no different than any other company in the history of business.

The only thing I can think of is the fact that in this case you can easily track the supplier and find out the "original price" of the item in a way that is very hard to do for let's say a pair of Nike shoes, but that's about it. Walmart is also full of these watches and you can believe they don't sell them for $5.

Or do you really think it costs Dell exactly $679,95 to build a laptop on one of their entirely owned factories where they manufacture and store every single component that goes into it? And, if you call them now they even give you a $200 discount because wouldn't you know it they just happened to have a "promotion" just for you?

There is no such thing as a free anything, yet when Apple offers FREE BEATS WITH EVERY MAC PURCHASE no magazine would dare to call them out on the obvious fact that both of these items are so "overpriced" that they can even afford to give one away "for free" and still come out ahead. They instead run "articles" praising what a great value the offer is and also you should act now before the sale is over.

This "article" could be written about any company, literally any company.

<comment><USER6> I think there's a difference between a company selling their goods at a profit and this not-quite-scam where a popup company not-quite-lies to their customers and dropships cheap products from somewhere else.

<comment><USER5> What do you think Apple does every time someone buys from their online store? They even give you a tracking number where you can follow the item _in real time_ all the way from the FoxConn factory in CHINA directly to your door. It never even flys over Cupertino. I think you are gonna be very surprised when you find out how the commodities trade actually work.

Walmart sells the exact same watches. So does Amazon. Do you think they are a not-quite-scam too?

Keep in mind people are actually getting real watches. I don't know in what world that wouldn't make it a legitimate enterprise. And if you say it's because of their marketing, then you should really take a look at the copy on some car ads one day. Preferably Tesla.

<comment><USER7> You seem to have severely missed the point. Everbody knows that Apple manufactures their products in China. Everybody knows their supply chain ships them from warehouses around the world without ever visiting the US. That is nothing to do with any of this!

What the article is describing is as if Apple didn't design their own products, but instead shipped a barely working unbranded $16 android phone straight from an Alibaba seller when you tried to order an iPhone.

It's true that Amazon and Wallmart etc. have done sort-of this kind of thing for a long time (but slightly higher quality goods), but there's a huge difference between this and actual genuine proprietary goods. And even with Wallmart and Amazon, they don't usually make up a brand story to try and make buyers thinking they're getting a unique product from a high quality boutique designer and then selling them broken mass-produced trash.

<comment><USER5> You are missing my point.

Every company does this, even Apple. Every company outsources designs to third parties or buys the rights to an already made product to sell as their own. Apple does it with cables and maybe most famously the Apple branded iMac vesa mount. I'm sure they do it with other non core stuff too.

Entire car companies are nothing but rebadged models from another sister/partner brand. And oh boy you should read the heritage stories of those ghost brands. Audi takes a Porsche SUV, makes a few tweaks and boom, new Q7. Do they say that on their marketing or do they talk about how they spent years studying the needs of a family to be able to balance it with the desire for power and performance? Or how they finally achieved the perfect balance of sportiness and practicality?

Hasselblad and Leica, renowned for their photographic history and iconic designs sell nothing but rebadged cameras at the low end, at double the price of their counterparts of course. Do they redirect to Sony or Panasonic on their marketing pages?

Almost the entire fashion and makeup industries are like this.

These guys have bad quality control, ok, I'll give you that, but that just means they are bad at business. And It is not like their watches were such a fire hazard that all had to be banned from even entering an airplane.

</comment></comment></comment></comment></comment><comment><USER8> I chatted briefly with the author of this piece, who said that apparently the only people making money on these watches are online "marketing gurus" who will teach you how to get rich selling free watches.

<comment><USER9> It's absolutely true. I sell screen printed t-shirts that I design and print myself, as a hobby, and as such I spend some time trying to improve my sales. The facebook group I'm part of is lousy with people trying to sell these same cheap watches, jewelry, etc., complaining that they can get lots of traffic via Instagram but no sales. I would wager 50% of them at least will never make a single sale. The rest might make a few sales but never come close to a positive ROI.

</comment></comment><comment><USER10> I like the screenshotted (shat?) conversation.

Customer> I can buy this watch for $2 elsewhere.

Retailer> Then why are you here?

On some level, yes they're selling overpriced rubbish, but then everyone else is, especially in fashion. Their sin seems to be making it explicit.

How long before people are buying these watches to make post modern 'statements'?

<comment><USER11> > How long before people are buying these watches to make post modern > 'statements'?

I'm sure that's already a thing, sadly.

</comment></comment><comment><USER12> > J. Crew now uses the brand for a line of high-end women's clothing. Its > marketing draws heavily on the age of the original Madewell, and J. Crew is > fond of including "since 1937" under the logo. This is part of a larger > effort to portray the Madewell brand in retrospect as a venerable, solid > company known for craftsmanship and quality.

This is a really old strategy for getting credibility. Some scholars believe that Sun Tzu's Art of War is really much younger than what is claimed in the book. They believe that Sun Tzu focused on the book's supposed age and history, in order to give it more credibility.

</comment><comment><USER13> Why is it that each generation needs to relearn that there is no free anything?

In my grandfathers day it was a free lunch. Today a free watch and tomorrow a free light saber perhaps?

<comment><USER14> My grandfather used to say "it's too cheap, we can't afford it".

<comment><USER15> My father used to say: "We're not rich enough to buy cheap things."

</comment></comment></comment><comment><USER16> a relevant aside, the Reply All podcast episode on drop-shipping is a great listen

<comment><USER17> This one? [https://www.gimletmedia.com/reply-all/117-the-worlds-most- ex...](https://www.gimletmedia.com/reply-all/117-the-worlds-most-expensive- free-watch)

<comment><USER18> yeah thats the one

</comment></comment></comment><comment><USER19> I love this! I commented on this article about my own experience starting a "watch business" when it was originally posted about a year ago and it seemed to get a decent amount of votes and attention so I figure I'll re-post it below:

[original w/comments: [https://news.ycombinator.com/item?id=15158422](https://news.ycombinator.com/item?id=15158422)]

\-----

So a few years back I started a watch company in a similar way.

I think I was actually one of the first to do it, since when I started I couldn't find many competitors. I tried a million kinds of promotions, from "free, you just pay for shipping" to offering people discounts and referral codes.

I actually created my own watch designs (well, modifications of the face, case, and strap with the same Chinese movement.) Some of my improvements started to be used by the manufacturers.

I'm not at all invested in it anymore: I left the business after selling a substantial, but not massive number of watches and finding that it wasn't terribly profitable if you included the cost of advertising, shipping, and (most importantly) my own time.

My own "watch company" was more real in a few ways: watches that I did in fact design myself, shipped from my address in the US, and the quality of the watches was actually quite good. To this day I wear a watch from my company and it has held up to an incredible amount of abuse. I say this as someone who (used to) collect watches. I also was upfront about the cost of shipping and the watch itself - I might have, for example, a banner that says "Free 3-Day US Shipping" and then the price of the watch would be clearly labeled as $20, so people would know that they would only be paying a total of $20 for the watch. The prices varied a lot over time, from $10 to $40 per watch, but surprisingly my profit was never huge even though I only spent about $3 on the watch itself and $7 on shipping.

If anyone's curious about the whole thing (and lives in the Netherlands) I still have hundreds of these watches and I'd be happy to sit down over a coffee, tell my stories from the business and show the watches. (My email's in my profile.)

\----

A few comments I'd like to add now, in 2018:

1) the watches (mine & that of other "companies") are of a surprisingly high quality in many cases. Not always, but often. For example, my watch has survived everything from bilge fluids to boiling water and it's the same cheap one I sold. Definitely far more durable than a comparable mechanical watch. I can see myself still using this thing 10+ years down the line. Furthermore, it actually does look classy and I get compliments on it. Most of the time, if you buy a cheap $3 Chinese alternative to something that's normally 10-1000x the price, it is neither beautiful nor durable.

2) The unexpectedly high quality of the watches is what fueled the explosion of sites IMO. You don't see "free earbuds", "free clock", or "free keyboard" sites, despite the fact that all 3 of these things are available for under $5 shipped from China. What I think happened is that people bought a watch on a whim, then it arrived and they realized "wow, this feels like a premium product!" Which it did! I was blown away when I first saw the quality level and instantly thought I should start a business. I suspect hundreds of other people had this same "eureka!" moment. When you get a $5 Aliexpress keyboard, it feels and looks like it cost $5 to make, and it excites nobody. Furthermore, Amazon makes a $13 keyboard with great reviews, and being Amazon it ships with Prime instead of "30-to-infinity day slow-boat-from-China shipping." Meanwhile, these watches felt like they cost at least $20 to make, and the only competitors for classy analog watches would be $50-100 or so, but they cost $3 (drop)shipped!

3) I highly doubt anyone made much money. When I started, dropshipping was not a thing the manufacturers offered (probably the reason why I was one of the first.) When manufacturers started offering dropshipping, these "businesses" exploded because you could suddenly run them entirely behind a laptop. The problem, of course, was that the number of such "companies" exploded, all competing for the same customers, Facebook ads, Google results, "underground marketing" spots, etc etc. That led to people getting a bit suspicious. If you saw one ad for a cool watch, maybe you were interested, but if you saw 20 in a week, all suspiciously similar, you'd think something's up.

<comment><USER20> It would be cool to hear your quick thoughts on the DW watch brand. I saw another post talking about the quality being not so good.

<comment><USER19> DW is a totally different thing from these companies. I'd guess that DW's watches cost them each maybe $10 or so and selling for $80-200, vs. these watches costing $2-3 and "selling" for $10. They're not dropshipped, use different manufacturers than these companies and are generally upfront about the price (although you can get DW watches for far less than MSRP.)

DW's watches are naturally higher quality as well, although in my opinion this isn't worth the price tag. You can get Chinese "copies" of DW watches for $10-20 or so that are nearly identical. I wouldn't exactly recommend them, but to be honest I don't think the quality would be that bad, and they do generally look nice. That said, I think that even if you're not willing to go the Aliexpress route you can find an attractive alternative for maybe half the price.

Watch snobs (I am one) would never wear a DW watch, but most people aren't watch snobs. If you want watch snob opinions, you can check out the great /r/watches (caution, you may get drawn to mechanical watches from the beautiful photos... an expensive hobby to have)

[https://www.reddit.com/r/Watches/comments/7jw3l1/daniel_well...](https://www.reddit.com/r/Watches/comments/7jw3l1/daniel_wellington_are_these_actually_poor_quality/)

[https://www.reddit.com/r/Watches/comments/8n40p8/question_da...](https://www.reddit.com/r/Watches/comments/8n40p8/question_daniel_wellington_ugh_what_have_i_done/)

</comment></comment></comment><comment><USER21> >Instagram-savvy version of the fake watches one sees being hawked on the sidewalks of tourist cities.

I bought a "Tagheuer" watch on the streets of NYC for five dollars. At a glance, it looked OK but by the end of a day's wear it had completely self destructed.

<comment><USER22> I bought a 'Cartier' ladies quartz watch on the street in Bangkok for my wife twenty years ago for five USD and it still works. The band has lost some of its black colour but apart from that it works perfectly, keeps good time, and looks pretty good.

Don't know it it is true but the movement inside claims to be Swiss.

</comment></comment><comment><USER23> Says you!

[http://freegoldwatch.com/newhome/home.html](http://freegoldwatch.com/newhome/home.html)

[https://firstname.lastname@example.com,-122.4526923,2a,75y,...](https://firstname.lastname@example.com,-122.4526923,2a,75y,187.74h,73.27t/data=!3m6!1e1!3m4!1sEYfaaHp7FjZEqdPOb2lzgw!2e0!7i13312!8i6656)

</comment><comment><USER24> This is like the 2010's equivalent of getting 'white vanned'.

[https://en.m.wikipedia.org/wiki/White_van_speaker_scam](https://en.m.wikipedia.org/wiki/White_van_speaker_scam)

</comment><comment><USER25> Seems to pop up every once in a while.

Previous discussion: [https://news.ycombinator.com/item?id=15154934](https://news.ycombinator.com/item?id=15154934)

</comment><comment><USER26> Dropshipping from China has a bad reputation but it can be done correctly and ethically. You can say you manufacture and ship from your partners in China, and you can pay for modifications, better QA like with stickers and number engraving and traceability, tracking in the shipment... even for some certified ISO processes.

Not defending what this fake stuff brands are doing, and they not only exist for watches but also for jewelry, leather bracelets, etc, etc... but just saying it's also comparable to what cheap shopping mall brands sometimes do with accessories and watches but adding renting and expensive place in the middle and marking up everything way more.

<comment><USER27> > Dropshipping (...) can be done correctly and ethically

"Ethical dropshipping" is the new baroque simplicity.

</comment></comment><comment><USER28> You guys didn't know about freedom phone scam happened in India :D

</comment><comment><USER29> From 19:

      Feels and is a scam. Worst ever. I live in SF where it "claims to be" Why the hell is my shipment coming from Shanghai?
      Going to miss my girlfriends gift date. WASTE of MONEY!

What kind of person gifts their girlfriend a free watch

<comment><USER30> Somebody who's pretty short of cash, I imagine.

</comment></comment><comment><USER31> Url changed from [http://www.jennyodell.com/museumofcapitalism_freewatch.pdf](http://www.jennyodell.com/museumofcapitalism_freewatch.pdf) to a non-pdf version.

</comment><comment><USER32> TANSTAAFL

[https://en.wikipedia.org/wiki/There_ain%27t_no_such_thing_as...](https://en.wikipedia.org/wiki/There_ain%27t_no_such_thing_as_a_free_lunch)

Also, people will pay more for a good story.

\---

> "25\. Maybe this explains what's so galling to people about the Folsom & Co. > not-really-scam: It simply lays bare the categorical deception at the heart > of all branding and retail. The different watch values are, in the strictest > sense, speech acts: the watch is $29.99 because someone said it's $29.99. > It's $29.99 because a certain person is wearing it on Instagram; it's $29.99 > because it's photographed next to flannel and a Chemex. While "Bradley" of > "Bradley's men's shop" may not be the most fleshed-out character, he – and > the entire existence of Folsom & Co., Soficoastal, etc. – are examples of > the now-household term, "brand storytelling." And the internet makes it > possible for anyone to tell any story, about anything, from anywhere."

\---

> " thateffingasian: Capitalism is making your own product and selling it. > Capitalism isn't buying a piece of shit and telling people they're worth 25x > the price, and lying to them about the actual value of the product. Your > idea of capitalism is fucked up @soficoastal. Then the idiots blocked me, > LOL. "

If Capitalism isn't buying shit and lying about it to sell it for higher, I don't know what Capitalism is. This is only a difference in degree, not kind.

<comment><USER33> _" If Capitalism isn't buying shit and lying about it to sell it for higher, I don't know what Capitalism is. This is only a difference in degree, not kind."_

I'm neutral on the question in this case, but really, any discussion of "capitalism" that goes beyond chapter one, page one of an undegrad economics textbook covers the point that efficient markets are not deceptive markets. Participants are assumed to share equal information. HN's understanding of capitalist theory seems to begin and end at the phrase, "supply and demand", and everything that has a two-sided market is otherwise A-OK.

In this particular case, consumers are sort-of informed, but it's also a lot harder to be informed than it used to be. I'm someone who _tries_ to find high-quality items, and even I screw up on a regular basis. I wouldn't fall for this one, though.

<comment><USER34> > Participants are assumed to share equal information.

That is not a requirement for efficiency. Unknowns are factored into the price as "risk".

For example, if I am selling you my car, I know its condition a lot better than you do. But, the more you are suspicious about its condition, the less you are willing to pay for it.

If you're a crackerjack programmer, my interview process is inexact, so I'm going to discount the salary offer based on how risky it is that you're not a crackerjack.

Sellers offer guarantees in order to reduce the customer's risk, and hence be able to sell at a higher price. Investment returns are based on the riskiness of it. I pay more at the post office for less risk of non-delivery. Insurance companies, of course, are an entire industry based on managing risk.

Risk is a perfectly normal characteristic of efficient markets, perfect or equal information is not required at all.

<comment><USER33> _" That is not a requirement for efficiency. Unknowns are factored into the price as "risk"."_

If someone is lying to you and you have no way of knowing it, there's no way to price the risk. Dishonesty can never be _eliminated_ (that's software engineer pedantry) but it's always a drag on efficiency. People who don't trust each other don't engage in trade.

 _" Risk is a perfectly normal characteristic of efficient markets, perfect or equal information is not required at all."_

Risk is a normal characteristic; there are always things you can't measure. Deception is not normal. It's why "capitalism" as practiced in countries where there are no stable legal systems tends to have lower levels of growth.

<comment><USER35> >People who don't trust each other don't engage in trade.

You are going to need one hell of a citation for that claim, or you are using some new definition of 'trust' that I have not previously encountered.

<comment><USER33> Saying "citation needed" doesn't work when it's one of the fundamentals of the field. But hey, Hackernews, I'll google it for you:

[https://www.jstor.org/stable/41638856?seq=1#page_scan_tab_co...](https://www.jstor.org/stable/41638856?seq=1#page_scan_tab_contents)

[http://econ.sciences- po.fr/sites/default/files/file/yann%20a...](http://econ.sciences- po.fr/sites/default/files/file/yann%20algan/HB_FinalVersion1.pdf)

[https://voxeu.org/article/trust-and-economic- development](https://voxeu.org/article/trust-and-economic-development)

[https://pdfs.semanticscholar.org/f7e3/e958b4b7387707a5ae32fa...](https://pdfs.semanticscholar.org/f7e3/e958b4b7387707a5ae32fa34a6a7565e1de1.pdf)

[https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2906280](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2906280)

[http://www.oecd.org/innovation/research/1825662.pdf](http://www.oecd.org/innovation/research/1825662.pdf)

[https://www.parisschoolofeconomics.eu/IMG/pdf/Huck2.pdf](https://www.parisschoolofeconomics.eu/IMG/pdf/Huck2.pdf)

I stopped midway down the first page. But this quote is great, so I'll include it:

 _" Conjoint action is possible just in proportion as human beings can rely on each other. There are countries in Europe, of first-rate industrial capabilities, where the most serious impediment to conducting business concerns on a large scale, is the rarity of persons who are supposed fit to be trusted with the receipt and expenditure of large sums of money."_

\- John Stuart Mill, Principles of Political Economy, 1848

<comment><USER35> Caveat Emptor - Chandelor v Lopus (1603)

edit - there is a core difference in definitions of trust going on here and it is basically the difference between the list of people you would lend money to vs the list of people you would buy something from. For certain trades, these lists are essentially the same, but for other trades they are very, very different.

</comment></comment></comment></comment></comment></comment></comment><comment><USER36> We really do live in a dystopia.

<comment><USER37> If scammy, semi-fraudulent watch sites constitute our dystopia, I'm relieved.

These scams are as old as commerce. Just more easily propagated using modern tools. They're the reason Consumer Reports and reveiw publications exist. Caveat emptor.</comment></comment>