Being risk averse

I saw this post on chaostheory and it really made me think - how risk averse are people in general (and me in particular?)

I think trading $1000 for 60% chance of $2000 might make sense, but trading $1000 for 0.06% for $2,000,000 does not, for me. There are two ways to look at this:

1. Expected resulting satisfaction: I will be happy if I win the 2 million, of course. but not a thausand times more. and most likely I'll be disappointed. If I try this 100 times, I will quickly 'learn' that this is too much frustration and not enough (or any) gain

2. Declining value of money: The value of the $10,000 between $100,000 and $110,000 me is quite high, as it would affect my investment.
The value of the difference between $1,000,000 and $1,010,000 is low. Therefore, the value of a dollar is a function of how much I already have, nd declines with wealth (duh?). So $1,000,000 does not really offer twice as much benefit as $500,000 do, just as ten Mars bars do not offer ten times as much benefit as one bar.

Fallacies - How arguments lie

this webpage discusses a classification of fallacies. While I don't care how you classify them, the list of fallacies (or misleading ways of arguing) is very helpful.
My favorites:
Ad hominem - we use this one all the time. While an interested party may make biased *decisions*, his logic should stand (or fall) on its own merits.
and
black&white thinking - all or nothing thinging.

I highly recomend you read the website above - and I know you trust my judgement

Tags:Opinions Philosophy Logic

Job choice is like the stock market

Look what I found here:
I thought education and career are like stock exchange, you should always buy low and sell high, but most people tend to buy high and sell low.

Wedding Bills

"Maybe there's a good reason that so many people shed a tear or two at weddings while the rest bear a grin of pure schadenfreude. The average cost of a traditional wedding in the U.S. is now up to $25,000" says the Christian Science Monitor.

Link brought to my attention on Plastic.com

MCSE certification hurts salary? really?

This blog post discusses how MCSE holders aherage $10K less than people who hold no certification. "The title is a little misleading, but this article is a pretty interesting read."

Actually, statistical analysis shows that those numbers mean little for the person trying to decide whether to get certified. It stands to reason that people who feel the need to get MCSE are less credentialed (or otherwise less successful) than those who do not - no-one who was just promoted to a development manager, for example, would have the time or inclination for a resume-building effort. It is those who did not get the promotion/job/assignments they wanted who will. And those are just the people who would be paid less.
Yet, stands to reason isn't statistics, and reason is often wrong. My take? inconclusive. an interesting double blind would be to have half of a group (randomly chosen) get certified, and the other half not, revisit them in 2 years and see their salary delta. Double blind? not quite, but almost. Is this experiment going to happen? I thinketh not.

Prisoner Dilemma: Tit for Tat or Suicide Bombing?

As described in this article, the latest prisoner dilemma competition (game theory is very cool) was won not by the usually 'tit for tat' algorithm ("be nice, fair, but tough") but by a "identify your friends, collude with them, walk over everyone else" system.

This shows that, in this game theory problem at least, there is a balance and there are weaknesses. Overly-altruistic (say-civilized) are vulnerable to overly aggressive approaches; as the number of aggressors increases, cooperation gives a competitive advantage, turning the tide.

Also read this plastic article

Firecalc and retirement

using firecalc, a tool that calculates the probability of being able to withraw a specific pension from fixed savings based on past stock market behavior, I got the following:
assuming a desired withdrawal of 30K, the probability per initial investment is:
700k - 89%
650k - 78%
600k - 72%
550k - 56%
500k - 51%

How much is your time worth?

This article states you should look at the value of your time; spending a lot of time today to save $10 does not make sense - because an hour today is worth 3 when you're retired; so you'd better use said time now.
The suggestion? decide on a value for your time (maybe based on your after-tax hourly wage) and use it to make decisions.

Tags: time tagtag

Salary Analysis - US software developers

using this data, across all industries, using median salary:

US: $75,000.00
Greencard holders: $87,000.00
[possible explanation: imported programmers are more talented than average since mostly very talented programmers are imported]
Greencard holders 10-15 years of experience: $91,000.00

By experience years:
0-2 : $50,000.00
3-5 : $60,000.00
6-10 : $80,000.00
10-15: $85,000.00

Software consulting rates - US

Below is a breakdown and analysis of consulting rates based on this rate statistics page, for industry=Computer-software:

Median Rate: $63.50 [134 responses]
By experience years:
0-2 : Median Rate: $45.00 [43 responses]
3-5 : Median Rate: $52.00 [16 responses]
6-10 : Median Rate: $65.00 [419 responses]
11-15: Median Rate: $75.00 [33 responses]

Median Broker Cut (for the ~45% who use brokers) by experience:
3 - 29% | 6 - 27% | 10 - 21%

Quit your job? why should you?

This freshmeat article suggests that better programmers don't get equivalently better compensation. I guess the lesson of this is - if you are much, much better than average, you should work hard to get a better deal, since no-one will hand one to you.

How to be a millionaire?

Beats me. But this guy offers some advice.

Are US salaries headed down?

This Blog claims average wages in the US are going down. good read. One thing to notice is that the rely on the same source of data - BLS - that I referred to in my post about salaries of software engineers.

Software Engineer Salaries: Average

Based on the gov data: Bureau of Labor Statistics

Using employment code 15-1031:Computer software engineers, applications [2004]

Area: Seattle-Bellevue-Everett, WA PMSA
Total Employees: 14480
Mean Income: 82900
Median Income: 79790
75% percentile: 97150
90% percentile: 115360

Tags:
software Programmers Salary

Poverty isn't widespread?

Poverty is widespread, right? umm, no.
according to this goveronment analysis of how many people stayed in poverty for 4 years, we see that only 2.0% of the population stayed in what the govronment defines as 'poverty' for the entire period, as opposed to much higher numbers (12%) of poverty statistics for 'poverty per month'. But being poor for a month just means low income for the period, it does not prove impossible hardship.

Now let's examine the impact of life choices on poverty. Seems obvious that bad choices do, and should, lead to bad outcomes. So lets look at this table once more - among highschool graduates, a sustained 'poverty' goes down to 1.5%, and to 0.5% among people with one or more years of college.
Similarly, without work disability, sustained poverty level go down to 0.9%; since we do not expect the gov. to keep disabled people on the same standard of living as working people (that would be discouraging to working people), that is an important number. The number also goes down to 0.5% to 0.7% (with kids) in married couples.
Also it is 0.1% among 'employed fulltime' and 0.5% among 'employed parttime'.

I extrapolate a 0.1% or lower sustained poverty numbers for people who: graduated highschool, attempt to get a job, and don't choose to raise kids alone (or don't choose to have kids at the age of 25 or lower).