69 of 77 people found the following review helpful
Well written, good tips, but his outcome was still mostly luck,
This review is from: A Million Bucks by 30: How to Overcome a Crap Job, Stingy Parents, and a Useless Degree to Become a Millionaire Before (or After) Turning Thirty (Paperback)
I thought this book was a good read, but most people are going to miss the point that the author's outcome (ie, having a net worth of $1 million) was mostly due to luck. Just look at his breakdown of what his assets were at the end of the book. His multifamily house essentially doubled in value in the space of a couple of years, and accounted for a large chunk of the $1 mil.
To borrow one of Taleb's (Fooled by Randomness) phrases, you have to look at "alternate histories" here. Not what just happened to occur, but think of what COULD HAVE occured if the author used the exact same techniques, but in different environments that he would have no control over. The author happend to be the right age and live in the perfect time and place to benefit from an unprecendented real estate market. What if he instead was born five years later (or at any other time for that matter) and did the exact same things? If he did the exact same things NOW, he could easily have wound up with negative equity in his property, if he could finance it in the first place. His outcome discussed in this book would probably be in the top 1% of possibilities. He even addresses the fact that he benefitted from luck, but totally undervalues that impact of course.
Don't get me wrong, his money saving techniques are all valid, but that is no where near the reason for his net worth getting to $1 mil that quickly. Eating ramen is more for show, to try and make a statement to your friends. In the end, doing those type of things will certainly help, but it's still a drop in the bucket when compared to luck beyond one's control.
In the book, Corey makes the point that you have to spread out your assets so that you can be in the position to get lucky with one of them. I agree with that completely. But you still have to GET lucky!
While I think most readers could learn something from the author, it would be wildly inaccurate for the author to claim this is an instruction manual on how to get to $1 million. You can't just say "buy real estate in a perfect environment, and it's value will increase by 50% per year." Not to mention the fact that he got his last $100k or so from the advance on this BOOK DEAL! Haha. If the book was titled, "A Sure Fire Way to $100k by 30" that would be much more reasonable and would factor out randomness.
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Showing 1-6 of 6 posts in this discussion
Initial post: Jan 28, 2008 8:01:35 PM PST
Nah. "Random luck" is winning the lottery, or finding buried treasure you weren't looking for. Dedicating your life to saving and then profiting in calculated risks in real estate investments doesn't sound very random if you think of it as an ongoing process rather than discrete episodes.
In reply to an earlier post on Feb 2, 2008 1:56:20 PM PST
Random luck isn't some binomial property, where it's either completely switched on or off. Just ask yourself, if the author of the book had 100 alternate personas through time that each were exactly one-year apart in age, and each moved to NYC and did the exact same thing at the same age in each sucessive year, would they all get similar results by age 30? At the time the author was doing his thing, he saw property values doubling in two or three years. Was that due to circumstances beyond his control? Of course. Was that a normal, average occurance? No, it was a bubble of historic proportions. If you could average the results of those 100 personas (and adjust for inflation), I'd say that would be the portion of the million due to skill or determination. The rest is pure randomness.
Posted on Feb 4, 2008 10:26:23 AM PST
Kaye L for love says:
In reply to an earlier post on Feb 5, 2008 2:20:31 PM PST
It's amazing how many people miss this. People like to find two dots and connect them with a straight line. Fine it wasn't luck at all. Then I'd advise you to go out asap and buy property...then just watch the value double in two years. It really IS that easy! All it takes is some determination.
Posted on Aug 20, 2009 12:08:34 AM PDT
Last edited by the author on Aug 20, 2009 12:09:04 AM PDT
T. Sandlin says:
True, it's not a guide on how to get rich... but the point is that you absolutely will NOT become rich if you don't save, and that if you save a whole lot, often, you will have a much better chance at winning with opportunities like this. Had he not saved anything whatsoever, he wouldn't have been able to invest in any property even if he KNEW it would raise in value so much.
You can't go wrong by saving, and he makes it very clear you should do your homework before proceeding into riskier investments.
Posted on May 2, 2010 7:05:11 PM PDT
Last edited by the author on May 2, 2010 7:07:58 PM PDT
C. Eggleston says:
From what I see, Alan Corey is a very adaptable man. I do not think it was a total "luck" factor. He played the real estate market by going for a under valued house after tons of research and then got the multi-fmaily unit. And through his connections, he was able to make more money over the years. Netwroking and knowing the right people helps. No one can do everything on their own and become a millionaire. He had consultants and CPAs along with advisors too.
He has followed the 7 laws of investing to a tee. From what I see, Alan Corey replicated his success even after his book so no one can really call it as "luck". "Luck" would be winning the lottery or just getting a stock that doubles and then withdrawing completely. Alan is a very frugal man and I know the most successful investors are frugal ones. Did anyone look at Warren Buffett and Sam Walton when they started to attack his charater? No, they just assume he is lucky. Alan Corey is making money in the down economy as well; believe that.
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