> [...] doing your own startup is one of the few relatively low risk gambles one can take.

I was under the impression that around 90% of startups failed. Was I mistaken, have the numbers changed, or do we just have very different thresholds for "low risk"?

High failure rate ≠ high risk. Everything with a high upside will have a high failure rate, but working 10 hours on your own startup a week is definitely lower risk than gambling with options (which is what /r/wallstreetbets is doing) or gambling with crypto (even higher risk).

I know people that made low 7 figures last year flipping NFTs, but the risk profile (to me, at least) was untenable.

Ok, but the comparison was to a 9-to-5 job, not gambling.

That's even more of a no-brainer, as an average 9-5 has practically zero upside, so your net worth is likely to stay flat (if not even go down). We like to pretend that the /r/wallstreetbets or crypto people are crazy, but most are median earners that feel that there's no way to break out without gambling. When we look at the housing situation, most are sadly right.

What do people want? To marry a cute girl, buy a house, have a few kids, retire, go fishing; if they get that big promotion maybe even buy a boat. But this life is simply not attainable today.

I mean, you already probably know this, but the risk profile of a startup that fails is not that you keep your money constant. It’s that you’ve been spending it all on rent and utilities for the last 7 years and have nothing to show for it. You’re still gambling away your savings, at a much slower and controlled rate, and the house at least doesn’t have the advantage over you, but it’s still incomparable to the risk profile of a 9-to-5.

Yep, a 9-5 has no risk, but no upside. In my humble opinion, a startup provides the best "balance" between risk and upside for those of us that come from lower or lower-middle class. I think your 7-year example is a bit contrived, since (barring exceptions like biotech, space, etc.) if you're working on a project for more than 6 months without product-market fit and/or growth, you're doing something wrong.

I think think that is borderline dangerous advice. Most people don't have the mindset or proper understanding of the startup world. On avg if you enter the startup space you are going to get chewed up and spit out and find yourself looking in the mirror at a middle age face with nothing to show for a lifetime of work.

> That's even more of a no-brainer, as an average 9-5 has practically zero upside, so your net worth is likely to stay flat (if not even go down).

The average millionaire is just a schmuck with a high paying 9-5 job. Doctors, lawyers, engineers, generic corporate drones etc. I don't know where you got the idea that it's impossible to make more than a subsistence wage with a W2 job but you are wrong.

I personally find trading crypto to be lower risk than options trading. They have options-like returns, but without the theta decay - you have a longer time period to be on the correct side of the market.

The cool part is, you get to try again.

I have started a number of businesses, even what I considered the unsuccessful ones still made me more money than I would have made at any 9-5 I could have had at the time. You just have to be willing to do something boring and compete against businesses that aren’t currently being run well. Starting the 7,000th craft beer company is gonna be really hard but (for example) being the #1 powerwashing company in your town is boring but way more lucrative

The average enterprise dev in any major city in the US can make twice the median household income with 3-5 years experience.

That’s still not that much

It’s not that much yet people making the median household income are not living on the street going hungry.

That's a pretty low bar, though. There are many different levels of struggling but I don't think it is productive to deny challenges of someone just because they are better off than some others.

Do you mean “struggling” as in “I can’t provide myself with food and shelter” or do you mean “I can’t put little Johny in private school and buy the 3500 square foot house in the burbs and go on nice vacations twice a year”?

You can start a business that you get an dopamine hit from telling people about, or you can start a business that makes real money. Pick one.

Or you can create a cryto scam and have the best of both worlds.

What makes you think being the #1 powerwashing company is going to be any easier than making an equivalent amount of money in the corporate world? Do you have any reason to believe you are better at powerwashing than the other 99 guys in your town?

The point is to pick a boring business where it’s easy to become #1 in a market based on current competition, clientele, skills, etc.

In the corporate world you are still trading your time for money. When you own a business you decide what and how much you want to do, up to and including nothing at all while still making an income. Boring businesses make it easy to hire people to do the stuff you don’t want to.

There’s no such thing as a business that’s both lucrative and trivial. To the extent that you need finesse, hard work and luck to build a successful business, the same combination of finesse, hard work and luck could land you an equally or more lucrative corporate job.

You can also make passive income by investing your large corporate salary and earn extra income without working. There’s no such thing truly passive, zero labor income when running a business, there’s always some managerial overhead even if you delegate as much as possible. Index funds are truly 100% passive.

Not true. You hire a CEO if you really don’t want to do anything. And it is a lot of work but usually nothing that difficult for straightforward businesses.

If done right, such a failure only impacts the investors, and anyone who took stock instead of a proper wage. The savvy founder pays themselves a salary high enough that they are totally in the black long before the bank arrives to repo the furniture.

So an important point that people seem to be always ignoring in the housing discussion is that of the boomers, and I don't mean as in "the boomers bad they screwed us" sense. I mean in a demographic sense.

The boomers were the largest generation of Americans and also are close to retiring or starting to retire, at the same time their children's children are entering the workforce, all of which were still relatively large demographics. This has created a temporary situation where we have a lot of people currently in the property market, because the boomers haven't quite retired and left their homes at the same time the millenials and zoomers are entering the market.

In another 10 years as the boomers begin to move to retirement homes, and assisted living centers, and die off (the move to sedentary office work along with poor dietary habits led to this) we'll see the pressure on the housing market ease as the massive generation currently occupying homes, the boomers, cease to occupy these homes and put them back into circulation.

The biggest risk in this case is that investment firms, such as Goldman and Berkshire try and steal the housing without ever intending to release onto the market.

If that happens I would say "reasonable men [will end up doing] unreasonable things", Madame Guillotine becomes a popular political figure, and trees start getting watered and “Wo unto them that join house to house, that lay field to field, till there be no place, that they may be placed alone in the midst of the earth!”[1]

1. Isaiah 5:8

> The biggest risk in this case is that investment firms, such as Goldman and Berkshire try and steal the housing without ever intending to release onto the market.

Pretty sure this is actually already happening at a furious pace — PE firms, right? In fact I’m pretty sure I’ve read HN threads about it.

FWIW, If you’re talking about the bank bailout in 2008, that was signed by Bush (not Obama).

https://en.m.wikipedia.org/wiki/Emergency_Economic_Stabiliza...

> To be completely honest, this is why I'm on HN: doing your own startup is one of the few relatively low risk gambles one can take.

This take is relatively…naive

Most startups fail and you would be much better off “grinding LeetCode and working for a FAANG” (tm r/cscareerquestions).

That’s just like people “starting their own business” and buying a franchise where their net profit is less than $70K a year and that’s only after the owner works 60+ hours a week.

Give me a cushy $BigTech job any day.

I disagree on a number of levels, but especially because big tech valuations were propped up by QE over the past 10 years, Tesla being the poster child there. But Amazon, Google, etc. have all been impacted by macro elements. So that “TC” people brag about has been heavily subsidized by the FED.

The irony of calling me naive when not even understanding macroeconomic effects is… something.

Even with todays valuations of FAANG stocks I can guarantee you that the standard new grad gets a better offer than you will statistically make starting your own company.

// You'll surely make it if you just "work hard enough," wink wink. Working a 9-5 career is (and has been) a net negative ROI for at least 2 decades, if not more.

Counterpoint - tech professional about 20 years out of college. Just bought a house in a nice suburb of NYC and all my neighbors are likewise working professionals. Some are in medicine, some in tech, some in things like construction management and education.

So seems like there is plenty of people for whom working has paid off.

Or to say it another way, who do you think lives in all these houses? Boomers and Russian oligarchs?

I mean you’re a gen X-er, it makes sense that you have zero idea what people that graduated college in 2008 went through. For context, people that had degrees in comp sci were working as Best Buy’s Geek Squad.

On the bright side, you timed the dot-com dip perfectly!

I am literally responding to your comment about negative ROI over the last 20 years. I graduated college on 2003 so that describes my timeframe exactly.

If you aren't talking about genx then what is your 20 year comment about?

I graduated then, from a smallish state school, with a degree in CS. Everyone in my graduating class got a decent to great job right out of school. You might be able to find individual examples of failures to launch but in the vast majority of cases it’s simply not true that CS majors went to Geek Squad.

> makes sense that you have zero idea what people that graduated college in 2008 went through.

Eh, I'm someone who graduated high school around that time and have a similar experience. Many of my peers have houses and work well paying 9-5's and have families and save for the future. They don't live in San Francisco though. There's plenty of homes for sale and tech jobs in markets that aren't Manhattan or Silicon Valley.

I graduated high school and lost all my college money from the 2008 recession. Yet here I sit as a home-owner for seven years now. I don't project my experience on my entire generation, and I would expect others to do the same.

> This is all happening because Obama didn't have the balls to just let the shoddy banks crash and burn, and we continued QE for around a decade to alleviate blowback from 2008. This, combined with other factors (a lax policy w.r.t. foreign investments in real estate), will screw us in the long run.

It also happened because most of the FBI agents who worked on white-collar fraud prior to 9/11 were reassigned to counter-terrorism work afterwards, and so the rampant fraudulent appraisals and mortgages prior to the housing crash were never investigated, let alone prosecuted.

Contrast 2008 with the reaction to the S & L debacle.

This is an interesting take that I’ve never really heard before. It makes intuitive sense, but do you have anything more in depth to read on it? Book or article or longer version of the argument, or a history of some kind? Very curious, thanks.

Not the original poster, but the book "The Best Way to Rob a Bank is to Own One" by William K. Black (former bank regulator during the S&L crisis) might shed some light onto the S&L crisis, if not 2008's comparative response, though not directly.

Check out the Calculated Risk blog, where I learned almost everything I know about the events leading up to the Great Financial Crisis, and the GFC itself.

What the… dude, the bank bailouts of 2008 were signed by bush and co. And (as a dem) were absolutely necessary. Obama, if anything, just kept the machinery moving.

If the government had let the banks crash in 2008 the economy would be in a much worse state today and everyone would be a lot poorer. Foreign investors hold a vanishingly tiny fraction of the real estate in America and are not responsible for whatever economic ills you are projecting onto them.

You've chosen to believe a lot of incorrect things in service of your ideological commitments. You should learn to distinguish between things that are actually true and things that you want to be true because it would validate your politics.

If you think people ever "had it easy" you're mistaken.

The recent run up in housing prices is nothing new, it's happened at least twice before that during my life time.

I'm a millennial and have been a homeowner for seven years now. I had average, if not below average, credit when I bought the house and I had no downpayment (i.e. I wasn't coming in strapped).

It sounds like I'm an extreme edge case, but I really don't feel that way. I have several co-workers in the same age range who also own property. The details being recapped in this thread are very foreign to me, so I feel like this must be a geographic issue and not a generational issue.

My experience could just be unique, of course.

It’s not unique.

A lot of my older millennial friends have paid off their houses in the last year or two.

Here in the Midwest (Pittsburgh), it’s not unusual if you’re fiscally responsible on even a single developer salary (2022, $120-200k) to both have bought a home and mostly paid it off especially if you bought within the last 10 years before the pandemic so we’re talking $140k-285k for a 4 bedroom, 3 bath, garage with yard and finished basement depending on your neighborhood preference.

The housing market was significantly different 7 years ago[1]. I'll agree that if you bought in your 20s as a millennial, you're in a much better position. Impossible to replicate that today though.

1.https://fred.stlouisfed.org/series/ASPUS

Telling someone to spend less than they make is not exactly "glamorizing the hustle".

Their point is that you don’t have to sacrifice in order to get where you need to be. I’ll let you and anyone else reading this comment decide how much sense that makes.

If you think housing is nuts, wait until you hear about childcare!

That said, you turned on the prior poster for basically saying “set a budget” — that’s not “glamorizing the hustle” that’s “live with intention”.

Sure, millennials and gen-z can’t afford housing in LA — but basically the only generation that widely owned property is the boomers, and that corresponded with insane labor scarcity (thanks, WW2) and the era before housing moratoriums.

Want more housing? Vote against laws restricting housing. Or, move to where housing isn’t restricted. There are tons of millennials and gen-z buying property, it’s just not in SF, LA, NYC, Seattle, or Portland — those metros have spoken, and they’re 100% invested in not letting newcomers in unless they’re very rich.