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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#311

Post by darkwizard42 »

chrisBob wrote: post #113
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…

He is saying you are more likely to become a Billionaire by starting a company than by joining a FAANG as an employee. Now that is a 1:1000000 event instead of a 1:5000000 event like it may have been in the past. I will forgive you if you still think it is unlikely. Most people's goal isn't (and shouldn't be) $1B. If your goal is a more reasonable $5M then joining an existing company is still your best bet. I am goin…

I think this is a good lens to look through.

If you want the BIG payout and "f u" money, then forming your own company is now the highest odds way to make that result. The chance of abject failure ($0 payout) is still high but even that isn't necessarily true these days with the experience and learnings leading you to FAANG jobs (should you choose) anyways. You do fall behind your colleagues who started at those jobs earlier, but they won't reach that $1B goal that you had and now neither will you; the difference being you gave it a shot (and the highest odds shot).

PG's point might be simplified to say starting a company is the newest highest odds way to be super rich.

Re: How People Get Rich Now

#312

Post by Nacdor »

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.

> namely that his works will be quoted beyond the lifespan of his contemporary readers

I have never seen PG quoted anywhere, not even on HN.

Re: How People Get Rich Now

#313

Post by whimsicalism »

timkam wrote: post #167
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…

I agree. To me, the post reads a bit like this: "Back then, we did not have as much inequality, but the super-rich did not deserve their wealth. Now, we have more inequality, but the super-rich [like PG himself] really deserve it, because they are innovators." The post does not cover the arguably more important questions like "Are the working and middle classes better off?", "Was there less innovation back then or we…

Moreover, people seem to continuously forget the fact that half of all wealth in the United States is inherited by the top 5% wealthiest households, not 'earned' via value creation.

In general, I tend to agree with Rawls that this notion of 'deserving' is irrelevant to the question of how we ought to distribute goods/welfare in society.

Re: How People Get Rich Now

#314

Post by VRay »

gonehome wrote: post #287
notacoward wrote: post #137

Earlier quoted context omitted.

Likewise, even down to being in the Boston area. I did OK at a couple of the eleven startups I worked at, but still made even more over just a couple of years at a FAANG. Many of my former colleagues on both sides have had similar trajectories. The vast majority of the "merely rich" in tech got that way by working at companies that had already broken away from the pack. Speaking of breaking away from the pack, that b…

I think this is true in the common case, but I thought Bezos was raised by a single mom who had him at 17 and his step father was a cuban immigrant? https://www.aboutamazon.com/news/policy-news-views/statement... There's also the donut king: https://news.ycombinator.com/item?id=25241898 I'm not trying to just pick rare counter examples, but I'm skeptical of the claim that there's little demographic distance or the im…

yeah, I think his adoptive dad was reasonably well-off though

I think "demographic distance" makes sense if you think of it in terms of "Coming from a family of at least moderate wealth". My family was pretty poor, and there's a lot they couldn't teach me about money because they just had no idea. Plus, my whole life I've had to set aside $X per month to keep the family afloat, so it's made it a lot harder to dink around with startups that aren't going so well.

I don't think I can get as rich as Bill Gates myself, but I'll bet I can get as rich as his dad, and give my kids a shot at becoming mega-billionaires

Re: How People Get Rich Now

#315

Post by tommyderami »

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 (…

Could you expand on the last sentence a bit more regarding effective altruism? Are the uncomfortable questions related to the utilitarian nature of how the movement racks and stacks the causes they choose to support or not?

Re: How People Get Rich Now

#316

Post by thegrimmest »

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…

Can I ask a related question? Why all the focus on income/wealth "inequality"? Shouldn't we be looking at the absolute baseline quality of life? Hasn't it been increasing dramatically despite increasing inequality? Due to technological advances, hasn't the baseline quality of healthcare, education, sanitation, nutrition, shelter, comfort, convenience, etc. significantly improved from the 60s or the 80s? If so, why begrudge the rich, especially those who have driven this advancement, their fleets of yachts?

Re: How People Get Rich Now

#317

Post by joshuamorton »

internetslave wrote: post #59
curiousllama wrote: post #36

Earlier quoted context omitted.

How many consultants & I-bankers do you know? You sound like you come from a remarkably entrepreneurial subset of the world. Where I come from, everyone wants to make MD/Partner, ether in law, finance, or consulting. More generally, MBA applications to top schools have been rising for years. Besides, if 10x the median individual income isn't enough outside of SF/NYC, you got bigger problems.

I used to work in investment research in NYC. So I know those types, but the vibe was the same. Maybe I’ve been lucky, but a lot of people I know actually have had startup success. I know a few people that ended up making over 25 million by 30. None of them made it in law or finance, and none of them ever wanted to continue their finance career. 10x the median income just isn’t that much. If you have three kids, mone…

> 10x the median income just isn’t that much. If you have three kids, money is still tight. I’m arguing that we are all making less and that startups are making people rich because they’re actually getting paid what they produced.

The tradeoff here is that if you have 3 kids, you can't afford to work at or start a startup, because your income today will be less than at a BigCo. The number of startups that will pay you 10x the median income, today, is pretty low (they're all already unicorns, which means your upside is somewhat limited) and you need to be fairly senior anyway.

Re: How People Get Rich Now

#319

Post by nostrademons »

teachingassist wrote: post #204
internetslave wrote: post #59

Earlier quoted context omitted.

I used to work in investment research in NYC. So I know those types, but the vibe was the same. Maybe I’ve been lucky, but a lot of people I know actually have had startup success. I know a few people that ended up making over 25 million by 30. None of them made it in law or finance, and none of them ever wanted to continue their finance career. 10x the median income just isn’t that much. If you have three kids, mone…

> 10x the median income just isn’t that much. If you have three kids You are taking home (in California; approximately) net 7.4 times what people with three kids on the median income are taking home. If you choose to live a median lifestyle, you can save 86% of your net income and therefore retire on it within 4 years.

Just as a counterpoint - if you believe that the median person is about to get screwed (either by civil disorder, famine, inflation, corporate restructuring, housing shortages, rentier landlords, conscription, etc.), then it's worth paying a premium not to be the median person. Judging from social & news media these days, the median person believes that the median person is about to get screwed.

The "live like the median person, bank 86% of your income, and retire in 4 years" strategy works well in times of abundance, where the median person has a decent life. Once people start expecting shortages - where the median person ends up dead, or unable to complete life milestones they desire like having kids - it becomes less feasible. I've seen a large shift in expectations over the last 1-10 years (depending on how far down the income distribution you were), where more and more people are realizing that bad things might be on the verge of happening.

Re: How People Get Rich Now

#320

Post by nly »

alberth wrote: post #103
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…

Rich != Wealth I think where PG and others are conflating two topics is being Rich vs being Wealthy. You can certainly become Rich working at FAANG (top 1% earner + appreciating stock ... and it's way less risky than other jobs). Where you can become Wealthy starting your own company (super high risk, most likely won't even become "rich" doing it, but you have the potential to create limitless wealth) EDIT: If you're…

Chris Rock has a funny skit about being rich vs having wealth:

https://www.youtube.com/watch?v=We8P8J25OKQ

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