Out of curiosity: because rationalists are supposed to win, are we (on average) below our respective national averages for things which are obviously bad (the low hanging fruits)?
In other words, are there statistics somewhere on rationalist or LessWrong fitness/weight, smoking/drinking, credit car debt, etc.?
I’d be curious to know how well the higher-level training effects these common failure modes.
I’ve wondered this too. In particular, for several years, at least among people I know, people have constantly questioned the level of rationality in our community, particularly our ‘instrumental rationality’. This is summed up by the question: “if you’re so smart, why aren’t you rich?” That is, if rationalists are so rational, why aren’t they leveraging their high IQs and their supposed rationality skills to perform in the top percentages and all sorts of metrics of coveted success? Even by self-reports, such as the LW survey(s). However, I’ve thought of a contrapositive question: “if you’re stupid, why aren’t you poor?” I.e., while rationalists might not all be peak-happiness millionaires or whatever, we might also ask the question about what the rates of (socially perceived) failure are, and how they compare to other cohorts, communities, reference classes, etc.
You’re the first person I’ve seen to pose this question. There might have been others, though.
The rationalist community has a lot of independent thinkers, and independent thinkers are more likely than the general population to find the game of amassing wealth to be an obstruction to their freedom of thought and an inefficient path to happiness and life satisfaction.
independent thinkers are more likely than the general population to find the game of amassing wealth to be an obstruction to their freedom of thought and an inefficient path to happiness and life satisfaction
Heh. Maybe I am not a sufficiently independent thinker, but for me the greatest obstruction to freedom of thought and happiness and life satisfaction is having a daily job, especially one that resembles Dilbert comics.
My problem with the “game of amassing wealth” is that (1) I am not very good at it, and (2) even when you are smart enough to double your wealth in a few years, if you start with a small amount, all you get is double of small amount, and there is a limited amount of years in your lifetime. I mean, compared to my wealth 10 or 20 years ago, I am significantly richer, but if I would keep the same speed, I would be probably able to retire at 60, which feels a bit late.
We don’t want “are you rich, do you smoke” because the selection effect (we are rich because we were born upper middle class, and we’re not powerful because powerful people have better things to do than explore the internet until they land on odd forums).
Otherwise the value of an idea is judged by the types of people who happen to stumble upon them.
What we want is “After being exposed to the ideas, did you get richer”, “did you quite smoking”, etc. Before after.
why aren’t they leveraging their high IQs
IQ is just another selection effect confound to control for. Priors say there is absolutely no way rationality training will alter your IQ (and besides the IQ data is mostly from standardized test scores taken in high school anyhow) If high IQ people land up here that just means high IQ people crawl the internet more and stick around more.
Not everyone who participated in the survey is a regular LW reader; it was open to the whole diaspora.
Not everyone who reads LW regularly is also working on their own rationality. Some people are here for the insight porn; some people simply enjoy being in the community of other smart people.
Not everyone who tries to become more rational is doing it correctly. For example, some people may go for the applause lights, or still compartmentalize in something important.
Now, assuming that you are trying to do the rational thing (but of course you are not perfect at it)… Also, assuming you have high intelligence (LW already selects for it), and you are mostly healthy (just a base-rate assumption)...
There are essentially two ways to become more rich: get a high income, or multiply the existing wealth. The second option is not available for those who don’t have any significant “existing wealth”. For those who do, I guess investing in the passively managed index funds is the standard LW advice.
Assuming that (feel free to adjust the numbers if they feel wrong) you can comfortably live on $2,000 a month, and you believe that index funds will reach at least 4% yearly increase in long term… all you need is to get $600,000, once, and then you can play the rest of your life in the “easy mode”. On the other hand, if you start from zero, and you are able to save less than $1,000 a month, the bad news is that you are never going to get there. And if you want to get there in, say, 20 years, you better save about $3,000 a month.
So I guess the answer is that even for smart people, saving $3,000 a month is a difficult task, and 20 years is a long time (LW does not even exist for 20 years yet). In other words, yes, it’s true that most LW rationalist are not smart enough to make half a million dollars overnight. But after unpacking “so smart” and “rich”, it shouldn’t surprise many people. Anasûrimbor Kellhus would probably be able to do it in a few weeks or months, but he is a fictional character.
By the way, from the outside “a person with a lifestyle X” and “a person with a lifestyle X, and with a few thousand dollars saved in index funds” will look the same, even if the latter is richer. Converting the former to latter would mean increasing rationality and wealth, and still would be invisible to outsiders. The difference would be that the latter would see some light at the end of the tunnel, but that light could still be a few decades away.
“if you’re stupid, why aren’t you poor?”
Society seems to have limits on how poor people can get: bankruptcy, unemployment benefits, not being able to borrow insane amounts of money, etc. (Also, there is the natural limit that people who don’t have enough resources to survive, die.) Therefore, unlike intelligence which makes the bell curve, wealth makes an assymetric curve.
Looking from the “99% vs 1%” perspective, we could say that most people actually are relatively poor. That the stupid people aren’t much poorer than the average, simply because the average already have very little wealth. Being stupid just means you will waste a little more of your money, until you are out of money, and then you can’t waste anymore.
You can’t become a “negative Bill Gates”; at worst you can become homeless (and then die). Actually, if you are just smart enough to pay your mortgage first, and only do the stupid things with the remaining money, you will probably even avoid homelessness. The average and below-average people have a script to follow, which will more or less keep them in the fixed position, as long as they can have a job.
And if you want to get there in, say, 20 years, you better save about $3,000 a month.
Your math is a bit off—you’re forgetting that your savings also grow at 4%/year while you’re accumulating them. So if you save $2,000 / month and can get stable 4% return (after taxes), in 20 years you will have $612K.
The whole calculation, though, is based on guaranteed returns and if your returns are actually volatile (say, the mean is 4% with noticeable standard deviation), the situation changes.
Yep, so far we’ve been talking about nominal sums without considering their real purchasing power.
The proper question of what is the sum of money that one can live off as a rentier to maintain a certain standard of living and how much needs to be saved for how long is… complicated.
Yup. The most sophisticated approach I’ve seen, which is clearly not actually sophisticated enough, is to guess at possible trajectories of future investment growth by some process along the lines of random sampling of past stock market returns, and then choose a sum that leads to you not running out of money in, say, at least 99% of those trajectories.
It’s a better start than simple compounding interest calculations :-)
To approach this from another side, one can buy an annuity (which provides a stream of income for the rest of your life). You need to save as much as is needed to buy such an annuity and then you’re good (mostly). However I understand that these annuities are not… attractively priced, especially if you want one which adjusts your income stream for inflation.
Out of curiosity: because rationalists are supposed to win, are we (on average) below our respective national averages for things which are obviously bad (the low hanging fruits)?
In other words, are there statistics somewhere on rationalist or LessWrong fitness/weight, smoking/drinking, credit car debt, etc.?
I’d be curious to know how well the higher-level training effects these common failure modes.
I’ve wondered this too. In particular, for several years, at least among people I know, people have constantly questioned the level of rationality in our community, particularly our ‘instrumental rationality’. This is summed up by the question: “if you’re so smart, why aren’t you rich?” That is, if rationalists are so rational, why aren’t they leveraging their high IQs and their supposed rationality skills to perform in the top percentages and all sorts of metrics of coveted success? Even by self-reports, such as the LW survey(s). However, I’ve thought of a contrapositive question: “if you’re stupid, why aren’t you poor?” I.e., while rationalists might not all be peak-happiness millionaires or whatever, we might also ask the question about what the rates of (socially perceived) failure are, and how they compare to other cohorts, communities, reference classes, etc.
You’re the first person I’ve seen to pose this question. There might have been others, though.
For many LWers, the answer is “I’m young,” but I think there are also a lot of people where the answer is “I am rich.”
Also worth noting: LWers should be extracting more utility from their money than non-LWers.
The rationalist community has a lot of independent thinkers, and independent thinkers are more likely than the general population to find the game of amassing wealth to be an obstruction to their freedom of thought and an inefficient path to happiness and life satisfaction.
Also many rationalists are quite young, as Vaniver pointed out.
Heh. Maybe I am not a sufficiently independent thinker, but for me the greatest obstruction to freedom of thought and happiness and life satisfaction is having a daily job, especially one that resembles Dilbert comics.
My problem with the “game of amassing wealth” is that (1) I am not very good at it, and (2) even when you are smart enough to double your wealth in a few years, if you start with a small amount, all you get is double of small amount, and there is a limited amount of years in your lifetime. I mean, compared to my wealth 10 or 20 years ago, I am significantly richer, but if I would keep the same speed, I would be probably able to retire at 60, which feels a bit late.
We don’t want “are you rich, do you smoke” because the selection effect (we are rich because we were born upper middle class, and we’re not powerful because powerful people have better things to do than explore the internet until they land on odd forums).
Otherwise the value of an idea is judged by the types of people who happen to stumble upon them.
What we want is “After being exposed to the ideas, did you get richer”, “did you quite smoking”, etc. Before after.
IQ is just another selection effect confound to control for. Priors say there is absolutely no way rationality training will alter your IQ (and besides the IQ data is mostly from standardized test scores taken in high school anyhow) If high IQ people land up here that just means high IQ people crawl the internet more and stick around more.
Thanks for being sane.
Some random thoughts about the questions:
Not everyone who participated in the survey is a regular LW reader; it was open to the whole diaspora.
Not everyone who reads LW regularly is also working on their own rationality. Some people are here for the insight porn; some people simply enjoy being in the community of other smart people.
Not everyone who tries to become more rational is doing it correctly. For example, some people may go for the applause lights, or still compartmentalize in something important.
Now, assuming that you are trying to do the rational thing (but of course you are not perfect at it)… Also, assuming you have high intelligence (LW already selects for it), and you are mostly healthy (just a base-rate assumption)...
There are essentially two ways to become more rich: get a high income, or multiply the existing wealth. The second option is not available for those who don’t have any significant “existing wealth”. For those who do, I guess investing in the passively managed index funds is the standard LW advice.
Assuming that (feel free to adjust the numbers if they feel wrong) you can comfortably live on $2,000 a month, and you believe that index funds will reach at least 4% yearly increase in long term… all you need is to get $600,000, once, and then you can play the rest of your life in the “easy mode”. On the other hand, if you start from zero, and you are able to save less than $1,000 a month, the bad news is that you are never going to get there. And if you want to get there in, say, 20 years, you better save about $3,000 a month.
So I guess the answer is that even for smart people, saving $3,000 a month is a difficult task, and 20 years is a long time (LW does not even exist for 20 years yet). In other words, yes, it’s true that most LW rationalist are not smart enough to make half a million dollars overnight. But after unpacking “so smart” and “rich”, it shouldn’t surprise many people. Anasûrimbor Kellhus would probably be able to do it in a few weeks or months, but he is a fictional character.
By the way, from the outside “a person with a lifestyle X” and “a person with a lifestyle X, and with a few thousand dollars saved in index funds” will look the same, even if the latter is richer. Converting the former to latter would mean increasing rationality and wealth, and still would be invisible to outsiders. The difference would be that the latter would see some light at the end of the tunnel, but that light could still be a few decades away.
Society seems to have limits on how poor people can get: bankruptcy, unemployment benefits, not being able to borrow insane amounts of money, etc. (Also, there is the natural limit that people who don’t have enough resources to survive, die.) Therefore, unlike intelligence which makes the bell curve, wealth makes an assymetric curve.
Looking from the “99% vs 1%” perspective, we could say that most people actually are relatively poor. That the stupid people aren’t much poorer than the average, simply because the average already have very little wealth. Being stupid just means you will waste a little more of your money, until you are out of money, and then you can’t waste anymore.
You can’t become a “negative Bill Gates”; at worst you can become homeless (and then die). Actually, if you are just smart enough to pay your mortgage first, and only do the stupid things with the remaining money, you will probably even avoid homelessness. The average and below-average people have a script to follow, which will more or less keep them in the fixed position, as long as they can have a job.
The LW surveys contain questions about whether people are regular LW readers and allow us to see how people who are regular readers differ.
Your math is a bit off—you’re forgetting that your savings also grow at 4%/year while you’re accumulating them. So if you save $2,000 / month and can get stable 4% return (after taxes), in 20 years you will have $612K.
The whole calculation, though, is based on guaranteed returns and if your returns are actually volatile (say, the mean is 4% with noticeable standard deviation), the situation changes.
And of course all these calculations are ignoring inflation.
If inflation is, say, 2%, then
to get out $2k/month with 4% nominal returns you need $1.2M rather than $600k; or
to get out $2k/month with $600k, you need 4% real returns or about 6% nominal. And
the equivalent of $2k/month now is about $3k/month in 20 years. On the other hand,
your savings can reasonably be expected to increase in line with inflation too.
Yep, so far we’ve been talking about nominal sums without considering their real purchasing power.
The proper question of what is the sum of money that one can live off as a rentier to maintain a certain standard of living and how much needs to be saved for how long is… complicated.
Yup. The most sophisticated approach I’ve seen, which is clearly not actually sophisticated enough, is to guess at possible trajectories of future investment growth by some process along the lines of random sampling of past stock market returns, and then choose a sum that leads to you not running out of money in, say, at least 99% of those trajectories.
It’s a better start than simple compounding interest calculations :-)
To approach this from another side, one can buy an annuity (which provides a stream of income for the rest of your life). You need to save as much as is needed to buy such an annuity and then you’re good (mostly). However I understand that these annuities are not… attractively priced, especially if you want one which adjusts your income stream for inflation.
That is also my understanding, and I doubt the annuity market has the properties required to make its prices reflect any sort of reality.
Have you looked into the census numbers?
I’ve skimmed them, but I don’t remember seeing these kinds of statistics. I’ll take another look though. Thanks.