Comments on: Benford’s law and why the first million is the hardest

By: FreeUrChains

FreeUrChains — Thu, 03 Nov 2011 19:05:44 +0000

The Rich get Richer by investing (good, Rich Investors) or by taking(bad, Rich Takers), the Poor get Poorer by Spending(bad, Poor Spenders) or by sharing(good, Poor Sharers). The Rich get more Power by investing or taking, the Poor become more controlled by Spending, but not by giving away.

Interesting In fact, when the Poor give/share anything away, the Poor Become much much Happier than the Rich Investors/Takers or even the Poor Spenders.

Thus the Poor that create something out of nothing and give it away, generate their own eternal and infinite bliss for themselves and others!

A side note to combot Rich Takers (Evil men):
Only good laws, courageous men, and cultural change/revolution can kill the King of the Hill of the Rich Takers, and then those below can take back what that King was hording after all that destruction. Also watch out for when Corporations/Kings hire foreigners/middle class workers at minimum wages and then raise their cost of living by ten fold. This happens all the time in the backgrounds of Society.

By: Weekly Reading Links: Building Businesses

Weekly Reading Links: Building Businesses — Sun, 13 Feb 2011 14:00:52 +0000

[...] up my alley because I don’t plan to retire. He does have an interesting article on Why the first million is the toughest, which I think is applicable to anyone trying to build a [...]

By: louie

louie — Mon, 22 Mar 2010 10:41:28 +0000

One of the reasons why Trump became a billionaire again though, was because the banks were willing to lend him money again after he became bankrupt in an 80s property crash. (read it in one of his books, the “kick ass” one)

So being nice to people helps too (kinda ironic in light of his cultivated persona, isn’t it?)

By: chris

chris — Mon, 22 Mar 2010 03:09:34 +0000

Well I think….when you have made a million you now have more money then you need to live and therefore have more money to invest then say someone who makes $8 an hour. Now that money makes more money which done right makes the next million. This we could call Chris’ Law?

By: Forest

Forest — Sun, 21 Mar 2010 17:12:37 +0000

I think this idea works on more than just a mathematical scale too. When someone learns how to make a million they then have the complete knowledge to do so again but without the need for worry (as hey have the first million to live from)…. So it’s easier… Also billionaires that go bankrupt very often become billionaires again (I think Trump went bankrupt a few times)…. It’s part mathematical and part state of mind I think.

By: Yakezie Challenge Carnival #4 - The Growth Edition « Eliminate The Muda!

Yakezie Challenge Carnival #4 - The Growth Edition « Eliminate The Muda! — Sun, 21 Mar 2010 12:19:30 +0000

[...] Early Retirement Extreme posts Benford’s Law and why the first million is the hardest [...]

By: Simple in France

Simple in France — Fri, 19 Mar 2010 13:27:18 +0000

I was forced to take math up through calculus and then had that part of my brain removed through lobotomy.

But seriously, I actually enjoyed the explanation. I’m thinking that the same must be true for increasing something like the number of people who read your blog. . .

Thanks for making me just a little bit smarter.

By: HSpencer

HSpencer — Fri, 19 Mar 2010 04:42:46 +0000

From: Mortgage Lenders R Us aka XYZ Banking.
TO: Young Home Buyer(s)

Subject: “Helping you out”

We agree to support your wish to purchase a home.

Homes are very expensive, you will have to finance one with borrowed money, probably and most likely. That’s where we come in.

Your responsibility is to cough up 20% of the purchase price in cash or as a second mortgage, but these days we want the cash.

We will lend you the other 80% of the purchase price and charge you only 6% interest rate.

Since you are young, you don’t know, nor will we willingly tell you, that the 6% interest charge is figured on the “unpaid balance of the loan” each and every MONTH for 360 months. You also don’t realize, nor will we willingly tell you, that this will equate to your paying two and a half or three times the purchase price of the house after you pay it off in those 360 months.

Instead of us sitting you down and willingly telling you, we opt to provide you with a box of paperwork, mostly in gibberish and fine print, of the terms of your loan. You can read this, or not, your option.

We suggest you have and keep a good secure job that pays well. If you lose the job, you most likely lose the house and all you paid on it up to the date when we foreclose.

Thank you for your confidence in us, and we hope you enjoy your new home!

XYZ Bankers, Inc.

By: Debbie M

Debbie M — Thu, 18 Mar 2010 22:45:15 +0000

Also, banks like the sorts of people who can save 20% of a house price. They seem like they might also be able to actually make house payments.

By: Quantitative Interest Returns « AdventuresInMissingThePoint.com

Quantitative Interest Returns « AdventuresInMissingThePoint.com — Thu, 18 Mar 2010 22:42:13 +0000

[...] } Today, I learned about Benford’s law from Jacob. If you read either of those links, you can see that if you apply Benford’s law to an [...]

By: Jacob

Jacob — Thu, 18 Mar 2010 21:16:55 +0000

@pete – I think these two issues are entirely unrelated. Downpayments are intended to eliminate risk of decreasing housing prices for the banks in case of a default. If you put 20% down and the market drops 20%, the banks can still recover all of their money by foreclosing the house. With 0% down, the bank would take the full risk and the full reward. Thus if banks become convinced that housing prices can only go up they would want to lend 100% (or more) on the price of the house.

By: pete

pete — Thu, 18 Mar 2010 20:41:28 +0000

I’ve been wondering why down payments are 20%. I feel like 20% is the sweet spot, or the point where diminishing returns are evident. I think this law may help to elegantly summarize it, yet I’m not confident that I am phrasing it right.

Is it correct to say that a 20% down payment leaves the lender with 100% – (30.1% + 17.6%) = 52.3%, a majority, of the compounding potential?