For posterity’s sake: I became convinced this is practically doable (using either treasury futures, leveraged ETFs like NTSX, or maybe options which I don’t understand as well) and probably a good idea/not very dangerous if done correctly. I think that fact is slightly info-hazardous for a couple reasons:
You shouldn’t trust most people to correctly advise you on financial products, to not be delusional, or to have your best interests at heart. So it’s hard to figure out exactly what to do. Index funds overcome this problem through the sheer size of their giant pile of empirical evidence and expert consensus; basically everyone agrees that they work as advertised, and no one reports getting accidentally burned using index funds—except when the whole market crashes, where they behave as expected.
If you learn that it’s probably a good idea when done correctly, you might feel obligated to go do it, and then you might do it incorrectly and foreseeably lose a bunch of money.
Because the pile of empirical evidence is less giant, it might not turn out to be such a good idea in retrospect, so it’s fundamentally riskier (even taking into account the risks people calculate). I’m sure someone would argue the pile is giant, but even if true that’s probably only the case if you’re sufficiently expert to judge more obscure evidence piles which most of us are not.
So I’d STILL recommend you not do this unless you’re extremely curious in this area, have no hang-ups, feel competent and trust your own judgment around things like intimidating financial products, have no track record of unwise gambling behavior, and have a stable enough life that if you fuck up you won’t be in a bad situation.
Here’s some resources. If you’re not interested enough to read and enjoy stuff like this, probably avoid doing this:
https://www.aqr.com/Insights/Research/Journal-Article/Why-Not—Equities
https://www.amazon.com/Enhanced-Indexing-Strategies-Utilizing-Performance/dp/0470259256
https://www.bogleheads.org/forum/viewtopic.php?t=143037
But I’ll probably do it myself and might write a blog post about it.
Thanks for this post, these kinds of details seem very useful for anyone wanting to attempt this path!
A worry I have: there are people who long for the imagined lifestyle and self-description of being an independent AI alignment/agency researcher. I would categorize some of my past selves this way.
For many such people, trying to follow this path too enthusiastically would be bad for them—but they might not have the memetic immunities that protect them from those bad decisions. For instance, their social safety net might be insufficient for the level of financial risk, or the career tradeoffs might be very large. This post is enthusiastic, but I think many people need to be urged caution when making major life changes—especially around such high stakes causes, where emotions run high.
So for my past selves, I’d disclaim:
It’s ok (and good) to prioritize your own financial and social safety net. You can revisit your ability to contribute from a better position in the future. The risks of things not going as well for you are very real.
When starting down such a path, you should have a clear fallback plan that does not involve immense suffering. For instance, make effort for X time period before attempting to find an alternate job if you have not achieved Y income. Do this only if you have confidence you will not take a too-large psychological hit from the failure.