Why the “Self-Made” Success Story Is a Myth • Hacker News Board

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

#131

Post by [deleted] » Tue, Feb 19, 2019, 6:31 PM UTC

darawk wrote: post #103

foldr wrote: post #83

Earlier quoted context omitted.

>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".

Ok, then, calculate the t-statistic of your income level with respect to your starting cohort then, if you want to be rigorous about it. I think my point stands.

[deleted]

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

#132

Post by jstarfish » Tue, Feb 19, 2019, 6:32 PM UTC

AlexTWithBeard wrote: post #77

adventured wrote: post #70

Earlier quoted context omitted.

A $180,000 30yr mortgage will cost you ~$880 per month. These days the median of all home sales in the US is about $225,000. The hard part of that $225k purchase for most people under 30 is the down payment of $45k. The median full-time income is about $50,000 in the US. Emphasis that that is the median, not average. Two household incomes is ~$85,000 or higher at median type wages (assuming a pairing of one full-time…

With the average cost of wedding in the US being above $35k ( https://www.marketwatch.com/story/what-the-average-american-... ), $45k of downpayment seems to be well within the means of an average family.

Marriage-related crap is charged to credit cards and/or is subsidized through financial gifts by friends and family after the wedding.

Down payments are neither, unless your parents/inlaws are feeling generous.

The average savings account balance in this country is far less than 45k. You are completely out of touch if you think the average family can simply pull that out of their asses.

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

#133

Post by greedo » Tue, Feb 19, 2019, 6:32 PM UTC

ForHackernews wrote: post #9

Isamu wrote: post #2

>She told me, “I was curious, but I don't know how a single person in America who doesn't have family money could buy anything, I really don’t, if they're not working in finance or they're not a doctor. ” Easy, there are vast areas of America where housing is more affordable. I certainly got zero cash from family when I bought a home. My family put money into giving me food and shelter growing up though. This is kind…

The places with cheaper housing also tend to suffer from a dearth of employment options. There are probably a few mid-sized cities out there that have both cheap housing and decently-paid jobs, but I imagine they are few and far between. I don't know how legitimate this source is, but > ATTOM points out that home prices are climbing faster than wages in 80% of U.S. markets. In fact, median home prices increased at a…

I live in a midwest college town. Unemployment here is extremely low, has been for decades. Housing costs are relatively low as well. I live in a house that in the Seattle area would be over $1M. I paid 20% of that. There are multiple startups for tech here, as well as government jobs, college related jobs, and other industries. So there's no dearth of employment options. If something were to happen, I can commute an hour to a city with a population of 1M.

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

#134

Post by TuringNYC » Tue, Feb 19, 2019, 6:33 PM UTC

Isamu wrote: post #2

>She told me, “I was curious, but I don't know how a single person in America who doesn't have family money could buy anything, I really don’t, if they're not working in finance or they're not a doctor. ” Easy, there are vast areas of America where housing is more affordable. I certainly got zero cash from family when I bought a home. My family put money into giving me food and shelter growing up though. This is kind…

>> I certainly got zero cash from family when I bought a home.

For a lot of wealthy friends, this was the case, they were self made (first order) and paid their own way (first order). The really valuable thing they received was the safety net and contacts such that they werent exposed to the spikes of unfortunate things that can happen. For me, if I cant make mortgage for 6mo, i'd be in trouble and there is no family member to help out. There is no uncle at a hedge fund who can suddenly get me a job. I'm in the general pool of candidates and only have those opportunities and the ones I create myself.

That makes be reach less, it made me take more conservative jobs earlier on in my career, etc. My risk tolerance and hence potential rewards go down

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

#135

Post by agensaequivocum » Tue, Feb 19, 2019, 6:35 PM UTC

cableshaft wrote: post #111

latencyloser wrote: post #14

Earlier quoted context omitted.

This reminds me of when I was working at Microsoft and a colleague said to me: "I don't know how anyone raises a family off less than $130k/year." I laughed and asked him if he'd ever been anywhere in the US outside of Seattle before. Turns out, he hadn't and assumed the insane cost of living we're subject to in this area also exists in the rest of the country. My point of reference is my family's house in a rural ar…

Between the cost of daycare, health care/insurance, pet care, car payments and maintenance, student loan payments, and then a mortgage (even a cheap mortgage) on top of that, not to mention saving something for retirement, forget the 10x your salary by the time you retire or whatever, and once every 2-3 years go on a vacation at least to the next state over, I do sometimes wonder how households can make ends meet on…

> I do sometimes wonder how households can make ends meet on less than $100k a year, and have no idea how a household can get by on the average $60k a year.

I know many families who make under 100k, have 7+ children and do just fine. There are lots of hand-me-downs and thrift store shopping. This is all fine.

> Between the cost of daycare... Most tend to Homeschool so no daycare is needed.

>not to mention saving something for retirement, forget the 10x your salary by the time you retire or whatever

One of the benefits of having many well raised children, they take care of you during this time.

> and once every 2-3 years go on a vacation at least to the next state over

This is non-necessary.

> Not to mention get married (wedding costs are insane, going through that right now) or other life events.

My wife and I got married (not including the honeymoon) for about $5k with 200 guests. Cheap weddings are doable.

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

#136

Post by rchaud » Tue, Feb 19, 2019, 6:36 PM UTC

ForHackernews wrote: post #90

darawk wrote: post #79

Earlier quoted context omitted.

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.

Or, many people with Gates' background (computer classes in high school in the 70s), did start tech companies, but failed. As the vast majority of new businesses do. The only way we'd ever hear those stories is if they made it rich later, at which point their failures become noteworthy as part of the narrative arc of their career.

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

#137

Post by heydonovan » Tue, Feb 19, 2019, 6:36 PM UTC

cableshaft wrote: post #111

latencyloser wrote: post #14

Earlier quoted context omitted.

This reminds me of when I was working at Microsoft and a colleague said to me: "I don't know how anyone raises a family off less than $130k/year." I laughed and asked him if he'd ever been anywhere in the US outside of Seattle before. Turns out, he hadn't and assumed the insane cost of living we're subject to in this area also exists in the rest of the country. My point of reference is my family's house in a rural ar…

Between the cost of daycare, health care/insurance, pet care, car payments and maintenance, student loan payments, and then a mortgage (even a cheap mortgage) on top of that, not to mention saving something for retirement, forget the 10x your salary by the time you retire or whatever, and once every 2-3 years go on a vacation at least to the next state over, I do sometimes wonder how households can make ends meet on…

As someone who has come from poverty, it still blows my mind that folks who make more than $70k struggle at all. A few of the things you mentioned are strictly luxuries. College, pets, new cars, vacations are all put on the back burner until it's financially reasonable to do so. I've met many folks making more than $100k who are in more debt than someone making $40k. Just ignorant of finances.

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

#138

Post by EliRivers » Tue, Feb 19, 2019, 6:38 PM UTC

refurb wrote: post #123

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…

Exactly. The logic of this argument seems to be: luck is involved in being successful, therefore personal effort plays no role at all. It makes no sense. I like your measure relative to what you were born into. Didn’t get enough to eat when you were a child and are now a millionaire. Self-made! Born into a millionaire family and turned that into a billion? Self-made! I’m personally thankful the tall poppy syndrome is…

If I was born poor, and then someone gives me a bunch of money, by this argument I am self-made.

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

#139

Post by AlexTWithBeard » Tue, Feb 19, 2019, 6:39 PM UTC

honkycat wrote: post #73

I like that we keep talking about privilege, no matter how much it irks the hacker news elite. I have a previous comment about this[0], so I will not go into too much detail. Nobody thinks they are rich or privileged. Now, the Hendersons down the street? THOSE PEOPLE are rich! I feel that people underestimate the huge effect of having a safety net under them. It is the difference between going to the amazing state sc…

Sorry for being blunt, but coming from a dirt poor background I've been there and done that. You sound like a really pampered person who cannot imagine living anywhere but in a two bedroom apartment with a maid and on-premises gym.

No, it's not that bad and you can read books equally well in your own apartment or in a public library.

You have a couple of valid points about medical debt, which is a crazy American thing and working while studying, which is tough. The rest though shows a complete lack of understanding how being poor works.

It is the difference between going to the amazing state school and the local community college.

HN is full of anecdotes that professors in the community college are not that much worse. And for the price they are actually AMAZING. Yes, being an Ivy league graduate generally helps. But we're not talking about crazy rich folks here, right?

It is the difference between living in a studio apartment, 45 minutes from school in the bad part of town and living in the beautiful two-bedroom top-floor loft in Logan Square.

Sorry, I'm not getting this one. Yes, living in a two bedroom loft is somewhat nicer, but what does it have to do with studying or working?

It is the difference between a data entry job, and an unpaid research internship with your professors.

Data entry job hands down. A month of real job on resume is worth a year of sitting in the lab and adjusting the thermostat.

It is the difference between taking the first job you can get, and holding out until you find a better one.

Just take the first job you can and keep looking for a better one?

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

#140

Post by lotsofpulp » Tue, Feb 19, 2019, 6:41 PM UTC

briandear wrote: post #89

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…

$50k downpayment on real estate has a lot more risk and a lot more work than $50k in an index fund, hence the possible higher return. It's up to the investor to determine their risk profile and whether or not they want to invest time in buying and selling real estate, finding and dealing with good tenants, maintenance issues, liability issues, spending time figuring out tax incentives and/or spending money on accountants.

There is no guarantee that property values will go up, or even stay stable. Ask the people in NJ/CT/IL/KY and other non-booming places facing skyrocketing property taxes and stagnant home sale prices. Who knows, maybe an earthquake erases all those plump west coast gains tomorrow. The index fund investment is placing bets on economic activity as a whole, not picking winners and losers of real estate markets.