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Parents' income, not smarts, key to entrepreneurship

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Re: Parents' income, not smarts, key to entrepreneurship

#251

Post by Axsuul »

Arainach wrote: post #236
Axsuul wrote: post #211

Earlier quoted context omitted.

I'm not denying it helps and isn't significant. But why do you need to inherit a few million just to feel secure enough to pursue entrepreneurship? Being an entrepreneur doesn't mean you have to go big or go home. There is just as much entrepreneurship with immigrants as there is with the US-born, with the former less likely to have a comfortable safety net.

Opportunity cost and time value of money. In general, if person A puts $5K a year into a 401k between ages 25-35 and then stops, while person B puts in $5K a year between ages 35-65, at age 65 person A will have a larger retirement balance despite having put in only 1/3 as much principal. This generalizes to the rest of your net worth (salary+stock) as well. If you win the lottery and manage to have significant equit…

> Opportunity cost and time value of money. In general, if person A puts $5K a year into a 401k between ages 25-35 and then stops, while person B puts in $5K a year between ages 35-65, at age 65 person A will have a larger retirement balance despite having put in only 1/3 as much principal. This generalizes to the rest of your net worth (salary+stock) as well.

I'm with you on the opportunity cost of money but I don't see how it has anything to do with what we are discussing.

> The economics of software are simply different. Someone good enough to start a business that brings in $10-20K MRR and barely survive is almost certainly good enough to get hired and paid $200K+ by any number of companies. If you're not going big or going home, it doesn't make sense to do a software startup these days.

This is not true at all. There are tons of FAANG engineers plotting their exit to start their own business for the reasons of freedom and impact. It's not just about the money. Also, if you can reach $10-20k MRR—that's a lot more scalable than your salary at a company ever would be.

Don't confound entrepreneurship solely as a vehicle for getting rich.

Re: Parents' income, not smarts, key to entrepreneurship

#252

Post by segmondy »

fred_is_fred wrote: post #12
JoeAltmaier wrote: post #4

I've known this for decades. When Bill Gates started publishing Smart Basic (or whatever) in magazines, I got a copy and saw what crap it was. I could do better. Why didn't I? That was my very first thought. The reason was, I had to work halftime to pay tuition and buy food. I was mired in working to live. Ol Bill had a family to support him as he bought resources (ads in magazines etc), recruited staff, took meeting…

Bill's high school also had a PDP terminal connected to UW. Basically no other high school had that - which gave him an early head start.

Sure, and where are the rest of his classmates? Are they all billionaires? early head start is only one if utilized. For everyone that's rich, you can find critical junctions in there lives that really moved them forward to that part. for everyone that's not, we have all had critical moments in our lives where we made the wrong choice.

Re: Parents' income, not smarts, key to entrepreneurship

#253

Post by complexmango »

JoeAltmaier wrote: post #4

I've known this for decades. When Bill Gates started publishing Smart Basic (or whatever) in magazines, I got a copy and saw what crap it was. I could do better. Why didn't I? That was my very first thought. The reason was, I had to work halftime to pay tuition and buy food. I was mired in working to live. Ol Bill had a family to support him as he bought resources (ads in magazines etc), recruited staff, took meeting…

This is amazing - just ignore Steve Jobs, Larry Ellison, Andrew Carnegie and several other of the richest people of all time who came from humble beginnings, just because they don’t fit your narrative.

For the past 15 years I have worked with wealthy people for a living, hundreds of them. Two things stand out: 1. Most of them came from humble beginnings, typically as immigrants 2. Most of them stress their kids won’t be as successful because of having it too easy

It’s alarming to me how much ignorance there is about real life outside of tech on hackernews, and how insidious academic leftist propaganda is.

Re: Parents' income, not smarts, key to entrepreneurship

#254

Post by complexmango »

La1n wrote: post #163
umvi wrote: post #77

Earlier quoted context omitted.

> Healthcare and Basic Income would do a lot to encourage entrepreneurship Would it though? From what I understand EU has way better social safety nets, yet much smaller entrepreneurship rates compared to USA. Counter-intuitively, limitations drive innovations. When your resources are limited, you are forced to innovate. When you have infinite resources, you tend to waste it. Ever notice that when you have infinite t…

>Counter-intuitively, limitations drive innovations. When your resources are limited, you are forced to innovate. If this was true you'd see people from poor families being more entrepreneurial than those from rich.

What you actually see in America is that most millionaires come from humble beginnings. That doesn’t mean most people from humble beginnings become millionaires. A->B does not equal B->A. Basic logic.

Go talk to the owners of the five nearest local small businesses, ask them how they started, and see how it goes.

Speaking from experience, btw.

Re: Parents' income, not smarts, key to entrepreneurship

#255

Post by Arainach »

Axsuul wrote: post #251
Arainach wrote: post #236

Earlier quoted context omitted.

Opportunity cost and time value of money. In general, if person A puts $5K a year into a 401k between ages 25-35 and then stops, while person B puts in $5K a year between ages 35-65, at age 65 person A will have a larger retirement balance despite having put in only 1/3 as much principal. This generalizes to the rest of your net worth (salary+stock) as well. If you win the lottery and manage to have significant equit…

> Opportunity cost and time value of money. In general, if person A puts $5K a year into a 401k between ages 25-35 and then stops, while person B puts in $5K a year between ages 35-65, at age 65 person A will have a larger retirement balance despite having put in only 1/3 as much principal. This generalizes to the rest of your net worth (salary+stock) as well. I'm with you on the opportunity cost of money but I don't…

If you come from a family that is anything less than "well off", there is a strong instinct for security. When you know how bad the alternative is, you play it conservative and plan for the future. If your choices are a job at Microsoft where you'll start at a level of compensation that's quite possibly higher than any ever earned by any of your family at any point in their careers and likely climb to senior or principal where you'll make more money in a year than most members of your family will ever have as a net worth or to throw away that essentially guaranteed income for the chance that you could do something else? You take the sure thing.

Re: Parents' income, not smarts, key to entrepreneurship

#256

Post by rasz »

epistasis wrote: post #21
SilasX wrote: post #19

Earlier quoted context omitted.

Or all the UBI money would pump up rents to the point that living costs make it infeasible again.

Rents only get pumped up if we don't have enough housing to go around... in which case regular incomes do the same thing.

When you write 'enough housing to go around' you are thinking about housing everyone in need. In a free market economy 'enough housing to go around' means enough real estate assets to safely park capital (for example Chinese one).

Re: Parents' income, not smarts, key to entrepreneurship

#257

Post by rasz »

hogFeast wrote: post #98
Abishek_Muthian wrote: post #90

Earlier quoted context omitted.

I knew Bill Gates's family was well to do when he started with his endeavors, but I recently came to know Bill Gates Sr. was a prominent personality from Howard Schultz's account of him. The story goes like this - When Howard was offered Starbucks for US$3.8 million by original founders, he was working to raise funds for that and his current investors went over his back to buy Starbucks. Howard was introduced to Bill…

Gates was also introduced to Warren Buffett through his dad.

and to IBM CEO thru his mother.

https://www.pcworld.com/article/243311/former_ibm_ceo_john_o...

"it was Opel who met with Bill Gates, CEO of the then-small software firm Microsoft, to discuss the possibility of using Microsoft PC-DOS OS for IBM's about-to-be-released PC. Opel set up the meeting at the request of Gates' mother, Mary Maxwell Gates. The two had both served on the National United Way's executive committee."

Re: Parents' income, not smarts, key to entrepreneurship

#258

Post by jquaint »

narrator wrote: post #83
JoeAltmaier wrote: post #4

I've known this for decades. When Bill Gates started publishing Smart Basic (or whatever) in magazines, I got a copy and saw what crap it was. I could do better. Why didn't I? That was my very first thought. The reason was, I had to work halftime to pay tuition and buy food. I was mired in working to live. Ol Bill had a family to support him as he bought resources (ads in magazines etc), recruited staff, took meeting…

The problem with most welfare schemes is they have big welfare cliffs. You make one dollar more than a certain amount and you lose thousands in benefits. It's the virtual equivalent of a greater than 100% marginal income tax. Also, countries with greater welfare programs don't have greater entrepreneurship. The opposite is somewhat true. Probably due to higher taxes and it's very hard to go out of business once you'r…

I thought the point of universal basic income was that it is universal. Everyone gets it so you don't have welfare cliffs.

Re: Parents' income, not smarts, key to entrepreneurship

#259

Post by epistasis »

rasz wrote: post #256
epistasis wrote: post #21

Earlier quoted context omitted.

Rents only get pumped up if we don't have enough housing to go around... in which case regular incomes do the same thing.

When you write 'enough housing to go around' you are thinking about housing everyone in need. In a free market economy 'enough housing to go around' means enough real estate assets to safely park capital (for example Chinese one).

The "not enough housing to go around" isn't because of a "free market" (if such a thing even exists), it's because wealthy people have enforced housing austerity and refuse to allow new housing to be built near them. Without wealthy people controlling zoning and restricting what can be built, far more people would be building their own homes, or would at least be allowed to pool together to build. Instead we hand over huge imputed rents to landlords and make anybody who is not super wealthy fight each other for the remains.

I think we should have robust social housing, as in Vienna or Singapore. But one thing that both places do that we do not is allow for far more housing to be built per person in high-demand areas (i.e. pricy areas). Their defining characteristic for affordability isn't so much the social housing, it's that they build for everyone as if housing were a human right, rather than a financial investment vehicle like we treat it here by enforcing scarcity.

To the extent that there is a "free market" it's only on existing housing once it's built. For existing housing, we let the wealthy do whatever they want, and use their market power to buy whatever they want, including hoarding it. However, it's only because of housing austerity in the building of housing that this real estate becomes such a sought after commodity. It is only through scarcity and austerity of building permits that continued financial climbs are guaranteed.

Most of the political spectrum in the US has housing completely wrong, and thinks that everything is going to be OK if they can just keep the "wrong" people out. Instead, we should adopt radical inclusion and welcome all people, and adopt the true belief that everyone deserves housing, every single person. Not just the cool ones, everyone. That is, unless we want to continue the current meatgrinder of capitalism. Eviction may be the blades at the end of the grinder, but the auger is the housing scarcity and exclusion practiced by nearly every single person in the US.

Re: Parents' income, not smarts, key to entrepreneurship

#260

Post by JoeAltmaier »

SilasX wrote: post #19
JoeAltmaier wrote: post #4

I've known this for decades. When Bill Gates started publishing Smart Basic (or whatever) in magazines, I got a copy and saw what crap it was. I could do better. Why didn't I? That was my very first thought. The reason was, I had to work halftime to pay tuition and buy food. I was mired in working to live. Ol Bill had a family to support him as he bought resources (ads in magazines etc), recruited staff, took meeting…

Or all the UBI money would pump up rents to the point that living costs make it infeasible again.

Old scarecrow, with no foundation. Read some more.
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