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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#171

Post by betwixthewires »

mdorazio wrote: post #132
betwixthewires wrote: post #75

Earlier quoted context omitted.

I think the point of the article was to demonstrate that the "wealth disparity" we are seeing nowadays is not due to parasitic rent seeking behavior, but due to genuine creativity and the creation of things people want to buy, and also that this was the norm except for the mid to late 20th century.

I think the parent point stands, though. Using the 100 richest individuals as a proxy for measuring and commenting on wealth disparity isn't very helpful. These people have always been outliers. A meaningful discussion would look more broadly at the top 10%, 1%, and 0.1% groups and investigate why they have been accruing wealth at a much higher rate than the bottom 75%/50%/25%

I think it is more meaningful with regard to what the article is after, in that it shows the paths to the top very clearly and how that has changed over the years. You could get a clearer picture with your approach of how on average the paths upward have changed, but I don't think that was the goal of the article.

Re: How People Get Rich Now

#172

Post by vmception »

> Of the 73 new fortunes in 2020, 56 derive from founders' or early employees' equity (52 founders, 2 early employees, and 2 wives of founders)

0 husbands of founders

An observation. Maybe it ought to say spouse to avoid the meaty bait of several different flavors that supports this reality. As at least 1 of these is an ex-spouse it also brushes against divorce expectations in various jurisdictions, where the unpaid contributions toward the union fit an O(log n) level of efficacy instead of linear O(n).

Re: How People Get Rich Now

#173

Post by EvilEy3 »

WhompingWindows wrote: post #120
nindalf wrote: post #71

It's a classic PG article. Many true facts in there, lots of good analysis with just a few questionable claims thrown in here and there. At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". Firstly, Gini coefficient is based on income, not wealth. That isn't stated clearly. Secondly, there's absol…

Paul Graham's articles always shoot immediately up to the top of HN, but I agree with you, they're generally cursory and pithy thoughts which don't convince my skeptical mind. I don't know, can someone explain why his work is so popular? Think of all the amazing writers across our civilization whose work is linkable, and we're worshipping these decent but not amazing blog posts?

> Think of all the amazing writers across our civilization whose work is linkable

Can you give some, please? I'm probably one those folks who cannot distinguish decent from amazing blog posts.

Re: How People Get Rich Now

#174

Post by globular-toast »

Taek wrote: post #40
onlyrealcuzzo wrote: post #15

It's hard to take this article seriously. People get rich now from companies because multiples have been artificially pushed higher by low interest rates. If that weren't the case, the top 100 would still likely be dominated by heirs. All that's changed is the Fed is manipulating the market more now than before, and that's benefiting growth stocks and fund managers of growth stocks... among other things.

The games we've played with money have pushed valuations to a point of being nearly meaningless. There are people who own a billion dollars of stock/crypto, and then there are people who own multiple yachts, multiple mansions, sports teams, factories, etc. The thing that bothers me the most about paper wealth is that not all of it can be exited. The economy may say that there are 500 new billionaires, but if all 500…

Exactly. At the end of the day there is only so much stuff to go around and we're pretty much at the limit of what people actually want. If a billionaire wakes up twice as rich tomorrow is he immediately going to buy a bigger mansion? Another car? Another yacht? More expensive food? Realistically he's unlikely to really want anything else. Billionaires have essentially infinite wealth. They can have whatever they want. But if one of them one day decided what they really want is a B52 bomber or an entire neighbourhood I think the limits of that wealth would become apparent.

I think what we're seeing is the limits of possibility. There are more billionaires than ever because they're all essentially at the limit. People like me are rich. I own a car with leather seats and air conditioning. I have my own home cinema. What do they have that I don't? A bigger car? A better home cinema? Who cares?

Re: How People Get Rich Now

#175

Post by cupofcoffee »

harshaw wrote: post #32

I don't want to derail this too much with personal anecdotes, but I suspect you are much more likely to build wealth with the more established tech companies - and that wealth is "rich enough". Maybe I am just unlucky or unskilled, but I spent roughly 20 years working at startups or innovation labs. I was "close" to some big events where I could have made big $$ but made 0. Both at my own startup and being at early s…

You are not unlucky the vast majority of startups fail.

You need to be extremely lucky, extremely talented, extremely ambitious basically extremely everything to create a company and get rich from it.

It's pretty much a pipe-dream to create a company and get rich from it. The most likely result is ending completely burnt out and having wasted a couple of years.

Re: How People Get Rich Now

#176

Post by frongpik »

dudeman13 wrote: post #111
internetslave wrote: post #23

I think there’s a different reason, companies just aren’t paying enough. Wages, even at 150-200k just really aren’t that much. 200k now is a lot less than 200k in 2010. The younger generation intuitively knows this. I don’t know anyone jockeying to climb the corporate ladder, and my social circle spans Stanford grads to no college degree at all. People are starting businesses because working for a corporation day in…

Just how bad at finances are you and people around you if 150k just really isn't that much? That literally places you amongst the richest 1%. Not metaphorically, literally. A couple of years worth of saving is enough to give you passive income to never need to work again for food or shelter.

Emma, no, the top 1% has at least 10M in liquid assets (primary residence doesn't count). 150k will never take you to that level.

Re: How People Get Rich Now

#177

Post by CivBase »

> There were no fund managers among the 100 richest Americans in 1982. Hedge funds and private equity firms existed in 1982, but none of their founders were rich enough yet to make it into the top 100. Two things changed: fund managers discovered new ways to generate high returns, and more investors were willing to trust them with their money.

PG brushes past this to talk about tech company founders, but I thought this part was actually kind of interesting. Why is there so much money in hedge fund management? My understanding is that their profits come from skimming off the top of the proceeds generated by investing their customers' money. What's stopping hedge fund management firms from racing to the bottom by competing for customers?

Re: How People Get Rich Now

#178

Post by ClumsyPilot »

tqi wrote: post #82
internetslave wrote: post #23

I think there’s a different reason, companies just aren’t paying enough. Wages, even at 150-200k just really aren’t that much. 200k now is a lot less than 200k in 2010. The younger generation intuitively knows this. I don’t know anyone jockeying to climb the corporate ladder, and my social circle spans Stanford grads to no college degree at all. People are starting businesses because working for a corporation day in…

"working for a corporation day in and out is slavery" Corporations are the boogeyman de jour but from personal experience, landlords / restrictive zoning / "anti gentrification" activists are the primary cause of my angst. I make more money now than I ever thought I would, but a truly staggering amount of it goes directly into my landlord's pocket.

Zoning doesnt matter unfortunately, prices go up in line with maximum possible mortgage amounts.

Real-estate prices have no bearing on 'value' of the land or materials. The buyer is convinced that he will get that money back and then some from the next sucker to buy it off him. It a pyramid scheme, detached from real economy.

Re: How People Get Rich Now

#179

Post by sushisource »

WhompingWindows wrote: post #120
nindalf wrote: post #71

It's a classic PG article. Many true facts in there, lots of good analysis with just a few questionable claims thrown in here and there. At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". Firstly, Gini coefficient is based on income, not wealth. That isn't stated clearly. Secondly, there's absol…

Paul Graham's articles always shoot immediately up to the top of HN, but I agree with you, they're generally cursory and pithy thoughts which don't convince my skeptical mind. I don't know, can someone explain why his work is so popular? Think of all the amazing writers across our civilization whose work is linkable, and we're worshipping these decent but not amazing blog posts?

OTOH, the top comment is a criticism. So, probably not all is lost :)

Re: How People Get Rich Now

#180

Post by wanderer2323 »

WhompingWindows wrote: post #120
nindalf wrote: post #71

It's a classic PG article. Many true facts in there, lots of good analysis with just a few questionable claims thrown in here and there. At the end, there's a massive claim that isn't fully stated but implied. "Of course the Gini coefficient is increasing" translated means "income inequality is not a problem". Firstly, Gini coefficient is based on income, not wealth. That isn't stated clearly. Secondly, there's absol…

Paul Graham's articles always shoot immediately up to the top of HN, but I agree with you, they're generally cursory and pithy thoughts which don't convince my skeptical mind. I don't know, can someone explain why his work is so popular? Think of all the amazing writers across our civilization whose work is linkable, and we're worshipping these decent but not amazing blog posts?

PG is apropos for this forum, but beyond that he is plainly a good writer. I don't know who you consider 'amazing writers across our civilization' -- but whether it is Gracian or Scott Alexander, PG shares one thing with them, namely that his works will be quoted beyond the lifespan of his contemporary readers.
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