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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#221

Post by giantg2 »

ed312 wrote: post #211
giantg2 wrote: post #86

Earlier quoted context omitted.

"...because they’re actually getting paid what they produced." Do they really though? That's really the owners getting paid that, not all the workers. And a lot of that is really valued on the potential rather than what was actually produced to that point. "10x the median income just isn’t that much. If you have three kids, money is still tight." That's about $400k, right? That seems like an insane amount of money (I…

Cost of living has gone absolutely through the roof, and shows no signs of stopping. That's, least in the northeast, the main reason $400k sounds rich but for a family of 4, with a $5k/mo mortgage, child care, etc. it really isn't.

I'm in the northeast, make under $100k, and support my family. $400k is in the top 10% of earners. $5k per month is about a $1M mortgage, which is on the high side, right?

Re: How People Get Rich Now

#222

Post by whimsicalism »

wanderer2323 wrote: post #180
WhompingWindows wrote: post #120

Earlier quoted context omitted.

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.

The presumption that Scott Alexander will be quoted long beyond his lifespan really drives home how much of a bubble this site can be at times.

Re: How People Get Rich Now

#223

Post by stereolambda »

Certhas wrote: post #57

It's an interesting read, and not entirely new information, but I find this leap pretty unconvincing: > So it's not 2020 that's the anomaly here, but 1982. The real question is why so few people had gotten rich from starting companies in 1982. It seems more likely to me that industrialization and mass-production in the late 19th century, and information technology in the late 20th century were inflection points at wh…

> Non-sequitur. If the technology that there is is sufficiently well exploited by Google, Amazon, Facebook, then where is your supposed opening? We are not at the end of the IT tech revolution now, but we are also nowhere near the beginning.

This is so true. I say the "tech" (~= internet software?) industry is now somewhere near the telecom level of maturity. We can think of these companies selling the raw (cloud) infrastructure as of something related to that. (Although the precise economics of this for customers is debatable, as discussed time and time again on HN). Selling ad placements is not predicated on huge innovation either, rather on trying to find untapped markets (as much as they still exist) and efficiency gains for the same thing.

The next stage, farther in the future, is these corporations becoming more like boring railroad companies. In fact, it's one of the few glimmers of hope for people aware of big tech's ramifications.

> The best VR experience right now is engineered by Facebook, not by some plucky start up acquiring new customers.

Maybe AI is a better example of something that has huge potential for sure, but is mixed in equal proportions with fantasy. To use similar analogies, I'd say it's in its (later phase of) dotcom era. And even then, as you say, it's not really made by startups built to get big, but - at best - by entities hoping to get bought.

But this way, we are still kinda able to sustain the public mythos of tech entrepreneur as a big idea person, and not an industry knowledge and capital efficiency person (related to really driven and good at making deals from the essay). It may be a result of fiscal policy, but it's certainly also beneficial for existing big corporations. Also, the romantic idea is more emotionally appealing.

Re: How People Get Rich Now

#224

Post by fellowniusmonk »

VBprogrammer wrote: post #34
aqme28 wrote: post #11

I don't think that the top 100 richest people is a good dataset. You can be extremely rich without making it anywhere near that list. While a lot of those top 100 people made it to that list by starting companies, I'm curious how many of them did so by leveraging family or inherited wealth.

There is a pretty low bar for inherited wealth. Simply having a family who is able to support you if everything goes pair shaped (maybe as little as letting you live in your childhood bedroom for little or no rent) gives you a huge advantage over someone who isn't in that position. Having parents who are able to lend / invest / gift modest sums of money is yet another step up the ladder. All the way up to having pare…

I started working full time at 15 to keep the roof over our families head after my mothers cancer diagnosis. Until the early death of both my parents I had an anti-safety net, I can vouch that people underestimate the soul crushing nature of real poverty. My own congenital heart defects cost me many surgeries, procedures and money. Thank goodness for medicaid for children, I would probably be dead without it.

I have fought without connections or degree to hit 1% in earnings for my age bracket in my late 20s, but the lack of wealth, the lack of security means developing ideas requiring runway and capital is nearly impossible.

Struggling and succeeding through the financial equivalent of having you head held underwater by life is very very different than even a lower middle class upbringing.

Thank goodness software development exists, it has the closest thing to effectively 0 signaling/gatekeeping to a very good income.

I'd still kill for a couple years of runway and the money to hire two or three devs.

Re: How People Get Rich Now

#226

Post by jrochkind1 »

hexhex wrote: post #183
WhompingWindows wrote: post #120

Earlier quoted context omitted.

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?

My two cents on why his writings are popular: - He uses anecdotal evidence which appears to be sound at first. Looking at the top 100 billionaires seems to give a good idea on how wealth is created and distributed, but really it is only a glimpse at a much bigger phenomenon (especially since the data only comes from two years). - His style of writing is very accessible and natural. He wrote an article on his style (…

Also his conclusions are what some people want to hear, that confirms their worldview.

This is not at all unique to PG, you and I and everyone does the same thing, at least to some extent, in choosing what argument/opinion pieces (now the dominant form of textual media?) we are tickled by.

Re: How People Get Rich Now

#227

Post by i_haz_rabies »

amznbyebyebye wrote: post #104
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…

It’s probably rich man guilt, plus some attempt at rationalization through cherry picked facts and data.. Also why I think bill gates >>> pg

I feel a certain degree of guilt over my (relatively low, even in Canada) developer salary. I didn't do anything to deserve my comfortable life. I can't imagine how people with billions sleep at night.

Re: How People Get Rich Now

#228

Post by giantg2 »

jkubicek wrote: post #200
giantg2 wrote: post #86

Earlier quoted context omitted.

"...because they’re actually getting paid what they produced." Do they really though? That's really the owners getting paid that, not all the workers. And a lot of that is really valued on the potential rather than what was actually produced to that point. "10x the median income just isn’t that much. If you have three kids, money is still tight." That's about $400k, right? That seems like an insane amount of money (I…

It is an insane amount of money even in the Bay Area. It's more than enough to support a large family living a very comfortable lifestyle while also saving significantly for retirement. I'm not sure what the grandparent poster is on about.

I guess other people agree with him because I'm getting downvoted.

Re: How People Get Rich Now

#229

Post by zdragnar »

tyre wrote: post #130
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…

Add to that that tech companies concentrate wealth line never before. Airbnb takes a cut of transactions not only around the US but across the world. Not everyone works in the Bay Area, but how many of the founders, early employees, and VCs do? The ones who really make massive wealth? Not 100%, but most. Same with Stripe, the same with Facebook, Google, etc. we’re pulling tremendous wealth into a small area, with tec…

The use of Airbnb seems odd to me. People around the world use it because they don't like the alternatives.

Why shouldn't they be allowed to do business?

Re: How People Get Rich Now

#230

Post by monoideism »

tyre wrote: post #130
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…

Add to that that tech companies concentrate wealth line never before. Airbnb takes a cut of transactions not only around the US but across the world. Not everyone works in the Bay Area, but how many of the founders, early employees, and VCs do? The ones who really make massive wealth? Not 100%, but most. Same with Stripe, the same with Facebook, Google, etc. we’re pulling tremendous wealth into a small area, with tec…

> But this level of wealth concentration and inequality is detrimental to the fabric of a society. We’re not better off, we’re not more innovative, we’re not healthier or more cohesive or happier when this happens.

I agree 100%, but you're ignoring the other factor that is detrimental to society: social factors. Notably, the divorce rate and single-parent rate among poor and working class Americans of all races has skyrocketed. Now, top earners will often tell you that there's nothing wrong with divorce or single-parenthood, but observe what they're actually doing themselves! Their low divorce and single-parent rates have remained steady over the past few decades, even as everyone else's is plummeting [1].

In addition, the middle and working class are losing their social support networks. Church attendance is down, union membership is down, and volunteer organization participation is down among those groups. In contrast, most top earners have large and robust social networks.

I could go on and on about other social issues. Yes, wealth and income inequality is a big problem, but it's only one aspect of the decline of America's middle and working class (excluding the upper-middle class, which has continued to rise). We need to stress and incentivize social factors as well. The non-wealth and non-upper-middle-class should emulate what the top earners do in their social lives, not what they say.

I still strongly support a wealth tax, and higher income taxes, as long as they're distributed directly to our citizens and not used to build additional government bureaucracy.

1. https://www.brookings.edu/research/middle-class-marriage-is-...

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