How People Get Rich Now • Hacker News Board

Re: How People Get Rich Now

#441

Post by bob33212 » Mon, Apr 12, 2021, 6:35 PM UTC

danielscrubs wrote: post #403

bob33212 wrote: post #216

Earlier quoted context omitted.

I have a similar background, and also miss the 90s where the people playing with tech were not thinking about the money but actually enjoyed the coding. What I find hopeful about Paul's essay and the current state of the world is that I can start my own company for next to nothing. And I only have to find a couple customers to cover my living expenses. I'm not going to be the CEO of a billion dollar company and that…

Not sure about that. Let’s say you have 10x cheaper tools, but 1000x more competition can you still make it?

The world is becoming more fragmented and long tails are getting longer. I'm not going to build a competitor to Facebook or AWS, but there are thousands of small untapped market segments.

Re: How People Get Rich Now

#442

Post by jacobsenscott » Mon, Apr 12, 2021, 6:36 PM UTC

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.

Well, the thing is you generally can't make $150k in a place where a few years of that salary will sustain you for years. If you are making $150k per year you are living in a place where you can live comfortably, but you'll still need to work every year for a long time.

Re: How People Get Rich Now

#443

Post by JMTQp8lwXL » Mon, Apr 12, 2021, 6:37 PM UTC

missedthecue wrote: post #433

greatgib wrote: post #411

Strangely, an explanation for the increased number of wealths coming from new, tech companies and investments that is ignored in his post is the disturbing fact it was taken from the average employee cut of the profits. See this: https://www.theguardian.com/business/2018/aug/16/ceo-versus-... I quote: "The 2017 CEO-to-worker compensation ratio of 312-to-1 was far greater than the 20-to-1 ratio in 1965, and more than…

I hate this comparison. Stock based compensation didn't exist in 1965. It's an oranges to apples comparison. CEO salaries today are still about 20-1, depending on the business. For instance: - Doug McMillon of Walmart makes $1.2 million in salary. - James Quincy of Coca-Cola makes $1.5 million in salary. - JPMorgan's CEO Jamie Dimon has a $1.5 million salary. - Sundar Pichai of Google makes $2 million in salary. You…

A more useful longterm metric is total compensation CEO:worker ratio. Stating the salary ratios are the same isn't a compelling argument since that's only one factor in the total package.

Re: How People Get Rich Now

#444

Post by aerosmile » Mon, Apr 12, 2021, 6:37 PM UTC

hardwaregeek wrote: post #286

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?

There's a cycle with blogs. The author starts a blog and they have a distinct, somewhat original voice with distinct, somewhat original views. In PG's case, the startup advice about building stuff that doesn't scale, not worrying about competitors, Lisp, etc. were quite fresh, at least to me. The author's blog becomes successful and their ideas become well understood throughout a community. But a person's ideas don't…

You liked his idea that for a startup to scale, you should be doing things that don't scale. That article has mostly anecdotal evidence, and yet nobody ever pushed back on it. How do we know PG was right back then? (He was.)

A few years later, that same guy writes an extensive essay with footnotes and data that must have taken days to compile (going all the way back to 1892). And yet, this one rubs you the wrong way.

I am not defending PG or attacking you, but just consider this explanation as a possibility: when it comes to how to build a startup, you don't really have skin in the game. Whatever he says, it's unlikely to impact your life. But the minute we start talking about the Gini coefficient, the stakes are higher - it's getting political. Suddenly, it's like listening to Rush Limbaugh make an argument - isn't it clear that no Democrat will ever agree with anything that Rush has ever said, no matter how factual or not it is?

I, for one, appreciate PG's ability to tie together global macro movements in a way that I've never heard anyone else summarize. You might agree or not with his take on the Gini coefficient (and especially his lack of acknowledgement or suggestions on how to deal with its consequences), and you might also get frustrated that PG is starting to dabble in politics, which is going to make him very polarized no matter how right or wrong he is. But there's still a ton of useful advice in this essay no matter which side of the political fence you stand on (eg: in 2021, if you're debating between entrepreneurship and finance/VC, choose entrepreneurship).

Re: How People Get Rich Now

#445

Post by [deleted] » Mon, Apr 12, 2021, 6:38 PM UTC

joshuamorton wrote: post #278

closeparen wrote: post #210

Earlier quoted context omitted.

The political messaging has also changed from “people in poverty have specific material needs that we need money to fix” (war on poverty) to “actually, people having or making different amounts of money is inherently wrong” (war on inequality). The war on poverty can be waged with a modest tax on the PGs of the world. The war on inequality is different. Venture capital always seeks to create wealth that will flow to…

> actually, people having or making different amounts of money is inherently wrong” (war on inequality). This is a misrepresentation though. There isn't anything inherently wrong with people having or making different amounts of money. The complaint, as I see it usually, is that the degree of inequality is unacceptable. That is, millionares aren't inherently unethical, heck people who make millions annually aren't in…

[deleted]

Re: How People Get Rich Now

#446

Post by peter422 » Mon, Apr 12, 2021, 6:38 PM UTC

missedthecue wrote: post #433

greatgib wrote: post #411

Strangely, an explanation for the increased number of wealths coming from new, tech companies and investments that is ignored in his post is the disturbing fact it was taken from the average employee cut of the profits. See this: https://www.theguardian.com/business/2018/aug/16/ceo-versus-... I quote: "The 2017 CEO-to-worker compensation ratio of 312-to-1 was far greater than the 20-to-1 ratio in 1965, and more than…

I hate this comparison. Stock based compensation didn't exist in 1965. It's an oranges to apples comparison. CEO salaries today are still about 20-1, depending on the business. For instance: - Doug McMillon of Walmart makes $1.2 million in salary. - James Quincy of Coca-Cola makes $1.5 million in salary. - JPMorgan's CEO Jamie Dimon has a $1.5 million salary. - Sundar Pichai of Google makes $2 million in salary. You…

Why can’t employee compensation also come from diluting Wall Street?

Why do they vast majority of those benefits go to top executives?

Re: How People Get Rich Now

#447

Post by blablabla123 » Mon, Apr 12, 2021, 6:39 PM UTC

cryptoz wrote: post #160

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's recent articles have changed from what they used to be. Recently (last few years) there is a dramatic change towards defending riches, logical fallacies to explain why being rich is okay, a lot of focus on wealth and how to get it and why it's okay. A lot less technically interesting than he used to post. I used to send Startup=Growth to everyone I knew. I think people are used to high-quality content from PG an…

They come definitely from a privileged niche point of view although they usually have some really interesting insights. For instance this one article about how suburbs are created and that kids in the past were at their parents' workplaces and learned how they work. [1] Or another article about quality of discussion, ranging from collaboration to ad hominem. Still I hesitate to share them outside of the typical startup crowd because parts of them might offend people. [2]

[1] http://www.paulgraham.com/nerds.html [2] http://www.paulgraham.com/disagree.html

Re: How People Get Rich Now

#448

Post by giantg2 » Mon, Apr 12, 2021, 6:39 PM UTC

irishcule wrote: post #384

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…

"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." I believe the OP is talking about the owners of the startups.

But in that case, the question still stands. Sure they started the company, but they didn't build it alone. There are usually people involved with little to no equity. It's similar to how there are CEOs making millions per year, when that money is really made through the sales of the products of the workers. So they aren't just being compensated for what they produced, but for what everyone in the company produced.

Re: How People Get Rich Now

#449

Post by velominati » Mon, Apr 12, 2021, 6:40 PM UTC

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…

Thanks for posting the PG wealth tax article. It is a highly flawed analysis.

First wealth appreciates over time. So if your wealth appreciates at 15% / year, and the govt. taxes it at 1%, the net effect is growth rate is slowed to 14%. With these assumptions, someone starting with $1mm in wealth ends up with $2.6 billion after 60 years!

Second - PG ignores that most wealth tax proposals have a high minimum wealth - in the $50mm range. So there is no early compounding of the tax. Adding this into the model, the wealthy founder ends up with $3.3 billion after 60 years.

With no wealth tax, this hypothetical founder ends up with $4.3 billion. So, yes the government has taxed a total of ~ 25% over 60 years, but the founder ends up quite wealthy.

Re: How People Get Rich Now

#450

Post by khuey » Mon, Apr 12, 2021, 6:41 PM UTC

missedthecue wrote: post #433

greatgib wrote: post #411

Strangely, an explanation for the increased number of wealths coming from new, tech companies and investments that is ignored in his post is the disturbing fact it was taken from the average employee cut of the profits. See this: https://www.theguardian.com/business/2018/aug/16/ceo-versus-... I quote: "The 2017 CEO-to-worker compensation ratio of 312-to-1 was far greater than the 20-to-1 ratio in 1965, and more than…

I hate this comparison. Stock based compensation didn't exist in 1965. It's an oranges to apples comparison. CEO salaries today are still about 20-1, depending on the business. For instance: - Doug McMillon of Walmart makes $1.2 million in salary. - James Quincy of Coca-Cola makes $1.5 million in salary. - JPMorgan's CEO Jamie Dimon has a $1.5 million salary. - Sundar Pichai of Google makes $2 million in salary. You…

I don't think "upper management comp has exploded only because they invented an entirely new way of compensating themselves" is the get-out-of-jail-free card you seem to think it is.