Why You Will Not Get Rich Quick Online - The Efficient Market Hypothesis
Online there are many systems that promise to make you very wealthy, very quickly. They can be pretty slick, and I have fallen for one or 2 despite the fact that I am a PhD student and should know better. Well, in some sense I do know better. The reason that these systems do not work is what is referred to by economists as the Efficient Market Hypotheses. This hypothesis is complicated, but basically it says you cannot get rich doing something if knowing how to do that something is public knowledge. If everyone knows about the great get rich quick scheme, it will fail.
As an example of the Efficient Market Hypothesis, imagine that there is some bit of software that will trade stocks for you. Now, the developers of the software will sell it to anyone, so the method is public knowledge. The stock trading robot will trade the same way for both you and anyone else who has the system. It will go after the same stocks, and since you and a bunch of other people want that certain stock, it will bid them up, destroying any profits you would have had. Thus, the get rich quick scheme fails because markets are efficient and there are no information asymmetries.
The way to get rich is to work hard, and don't forget to have some fun along the way. Just don't fall for any get rich quick schemes.
