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Why the “Self-Made” Success Story Is a Myth

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Re: Why the “Self-Made” Success Story Is a Myth

#81

Post by darawk »

tux1968 wrote: post #75
beaner wrote: post #66

Earlier quoted context omitted.

Not everyone, if put in Bill Gates' shoes, would have been able to take advantage of such an opportunity. Can you say that if you were there, you'd have done the same? And executed as well afterward, into a multi-billion dollar company?

That's the wrong question. Would Bill Gates have been able to do what he did if he grew up poor, with poor nutrition and poor education? We all owe our success to good fortune and the prosperous society we find ourselves lucky enough to be a part of.

Maybe, maybe not. But what's definitely true is he's exception with respect to his own peer group. Tons of kids had the advantages he had. Only one of them started Microsoft.

Re: Why the “Self-Made” Success Story Is a Myth

#82

Post by AlexTWithBeard »

ForHackernews wrote: post #64
ijpoijpoihpiuoh wrote: post #51

Earlier quoted context omitted.

Where do the people you know live? That might inform the probability of being able to buy a home with or without parental help. I just picked a metro: Baton Rouge. Median home price there is around $160k, although naturally there is plenty of inventory available for less than $100k. Some of it's in pretty dismal shape, but, looking at Zillow, there are non-zero houses in this category that look livable. The median HH…

I grew up in the midwest. Most of the people I know are in Iowa, some in Illinois and Missouri. Saving up a down-payment is a significant obstacle, I think. I know that in some areas, you can get a rural development loan that requires a much smaller downpayment, but my friends don't want to live in the boonies and it would lead to a pretty miserable commute for them.

FHA gives loans at 3.5% downpayment.

Re: Why the “Self-Made” Success Story Is a Myth

#83

Post by foldr »

darawk wrote: post #26

This is such nonsense. First of all, there are absolutely people who come from dirt poverty and become wildly successful. Second of all, plenty of people receive lots of help from their parents and amount to precisely nothing. IMO it's fair to refer to your success as "self made" if you exceed the median success level of your class peer group by a substantial margin. If you immigrate from Africa with nothing, and you…

>IMO it's fair to refer to your success as "self made" if you exceed the median success level of your class peer group by a substantial margin.

Even if success were 100% down to luck, there'd still be people who exceeded the median success level of their class peer group by a substantial margin. It's begging the question to simply assert that a majority of these people can fairly claim to be "self made".

Re: Why the “Self-Made” Success Story Is a Myth

#84

Post by ip26 »

radmuzom wrote: post #33
darawk wrote: post #26

This is such nonsense. First of all, there are absolutely people who come from dirt poverty and become wildly successful. Second of all, plenty of people receive lots of help from their parents and amount to precisely nothing. IMO it's fair to refer to your success as "self made" if you exceed the median success level of your class peer group by a substantial margin. If you immigrate from Africa with nothing, and you…

Down-voted for such a strong word - "nonsense". See my other comment [1]. I am as self-made as anyone can be, with a very high standard of living in my country without taking even one cent from my parents beyond a certain age. But all that is because of one stroke of luck - I am proud of the fact that I was able to use that luck to my advantage but under no illusion that all my success is due to me alone. [1] https:/…

Even the superheros in the movies are permitted a little luck occasionally. "Only people who had the worst possible luck at every turn may be considered self-made" or similar is a ridiculous goalpost-moving standard. Next we'd be sitting around a table competing over who faced the most hardship to be considered legitimate.

I was able to use that luck to my advantage

That's what counts.

Re: Why the “Self-Made” Success Story Is a Myth

#85

Post by [deleted] »

darawk wrote: post #81
tux1968 wrote: post #75

Earlier quoted context omitted.

That's the wrong question. Would Bill Gates have been able to do what he did if he grew up poor, with poor nutrition and poor education? We all owe our success to good fortune and the prosperous society we find ourselves lucky enough to be a part of.

Maybe, maybe not. But what's definitely true is he's exception with respect to his own peer group. Tons of kids had the advantages he had. Only one of them started Microsoft.

[deleted]

Re: Why the “Self-Made” Success Story Is a Myth

#86

Post by fzeroracer »

darawk wrote: post #26

This is such nonsense. First of all, there are absolutely people who come from dirt poverty and become wildly successful. Second of all, plenty of people receive lots of help from their parents and amount to precisely nothing. IMO it's fair to refer to your success as "self made" if you exceed the median success level of your class peer group by a substantial margin. If you immigrate from Africa with nothing, and you…

Do you have an argument against the authors points that does not consist of adhominem and projection?

The self-made illusion is precisely that because we ignore the many things that gave us a headstart in life and allowed us to do the things that would've caused other people to fail. The only reason why I'm here now is because I took on a risk of going bankrupt moving across the country for a job opportunity in an industry that suddenly became very volatile. Had I been laid off or had the winds shifted and resulted in my first job being downsized, I would've been financially destroyed and dropped right back into poverty. We ignore the sheer amount of luck and circumstance in our career and lives in favor of telling a story where we're the hero.

Re: Why the “Self-Made” Success Story Is a Myth

#87

Post by TomMarius »

tux1968 wrote: post #75
beaner wrote: post #66

Earlier quoted context omitted.

Not everyone, if put in Bill Gates' shoes, would have been able to take advantage of such an opportunity. Can you say that if you were there, you'd have done the same? And executed as well afterward, into a multi-billion dollar company?

That's the wrong question. Would Bill Gates have been able to do what he did if he grew up poor, with poor nutrition and poor education? We all owe our success to good fortune and the prosperous society we find ourselves lucky enough to be a part of.

That is not true. If Bill Gates grew up like that, he would've been labeled a "self made success" even making $50k yearly. He is from a rich background and thus we have to compare him to his peers - and he definitely is successful and that success is self made compared to anyone from upper middle class - but that doesn't have to do anything with the fact that Bill Gates wouldn't have been able to do what he did if he didn't have rich background (is it even practically possible?).

Re: Why the “Self-Made” Success Story Is a Myth

#89

Post by briandear »

jonbarker wrote: post #45

So the author's parents encouraged leverage by subsidizing a down payment on real estate, an asset class which underperforms index funds. The story doesn't seem to end well; it is probably self correcting in the long run.

Real estate underperforms index funds? Perhaps in capital appreciation, but in terms of cash on cash returns, nothing beats real estate. If you can turn a $50k downpayment into a $250k property netting $300 per month after mortgage/expenses, plus get capital appreciation on top of that — you’ll make far more money on that $50k than the same money invested in an index fund. Statements such as “indexes out-perform real estate” might be true for an owner-occupied residence, but it certainly isn’t true when the real estate is an actual cash-flowing investment and not your own residence. What people fail to grasp is that a $250k house doesn’t cost $250k in cash. It costs $50k in cash. While the bank owns the other $200k in value, that $50k gives you control of that asset and the cash flow that comes from it. If that $250k house goes up to $300k in value, then you just earned a 100% return on your cash plus the cash-flow revenue. Even if the house goes down in value, if you are still cash flow positive, you are still making money. A $300 net per month is $3600 per year which is a 7% return on your $50k cash, however on top of that 7%, you also get a “free” house since your tenant is paying the note and expenses. On top of that, you get depreciation, which in many cases can make that $3600 per year tax free when the depreciation exceeds the income from the rent.

Indexes outperforming real estate is a highly simplistic view and doesn’t accurately reflect cash on cash returns, tax advantages and cash flow. $50k in an index vs $50k as a down payment on a cash flow property— the property is going to make as much in cash as your entire capital appreciation for the index. For an index to be better, it’s going to have to both appreciate at a higher rate than the house as well as pay dividends equal to the annual net from the house.

Comparing indexes and real estate shouldn’t discount the value of leverage, nor should it discount the cash flow from the asset. (In the situation you are commenting on though, the author buying a residence, I don’t disagree; I am commenting on real estate as an asset class in general.)

Re: Why the “Self-Made” Success Story Is a Myth

#90

Post by ForHackernews »

darawk wrote: post #79
koolba wrote: post #42

Earlier quoted context omitted.

> But if you say, start Microsoft and become a billionaire i'd say that it's fair to call that self-made success. Bill Gate’s family clearly contributed to his and Microsoft’s success. His mother in particular had direct contact with the chairman of IBM which lead to a scrappy software company landing a life changing contract. I’m not saying that to discount the rest of his achievements or effort either. The greatest…

I totally agree. What I disagree with is the people that want to dismiss Gates success completely because his family had some money. Tens of thousands of kids have the same background that he did, but don't do anything half as incredible as starting Microsoft. While Gates should acknowledge the advantages he's had, I don't think it's unfair or unreasonable for him to feel pretty good about what he's accomplished.

> Tens of thousands of kids have the same background that he did

Or alternatively: statistics suggests that out of a big sample of people, a few of them are going to strike it really rich.

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