How People Get Rich Now • Hacker News Board

Re: How People Get Rich Now

#481

Post by twobitshifter » Mon, Apr 12, 2021, 6:57 PM UTC

zdragnar wrote: post #229

tyre wrote: post #130

Earlier quoted context omitted.

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?

I think his very good point is that a global business is comparatively easy to build and that has led to wealth concentration

Re: How People Get Rich Now

#482

Post by random314 » Mon, Apr 12, 2021, 6:57 PM UTC

aerosmile wrote: post #444

hardwaregeek wrote: post #286

Earlier quoted context omitted.

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.…

While pg has extensive foot notes for this essay, there is a vast amount of research with orders of magnitude more citations contradicting him on the gini coefficient.

There is no argument about his footnotes. Quite likely the very richest might not be inheriting it. This has no bearing on the gini coefficient. And his essay on wealth tax is downright stupid. Are his essays as meticulously researched as Pikketys? Why does pg fail to refer to the most famous recent book on the subject in his footnotes? What could be the reason?

https://en.m.wikipedia.org/wiki/Capital_in_the_Twenty-First_...

Re: How People Get Rich Now

#483

Post by brudgers » Mon, Apr 12, 2021, 6:57 PM UTC

Alternative hypothesis: old wealth has become more adept at maintaining discretion via trusts and fictitious persons such as LLC's and off-shore investment vehicles.

CEO's of new companies can't be discreet. Their job requires the opposite.

Lack of discretion always distinguishes new money from old.

With the collapse of well funded investigative reporting, it is well nigh impossible to track down wealth that seeks not the spotlight.

Forbes has 54 full time employees. https://www.dnb.com/business-directory/company-profiles.forb...

Re: How People Get Rich Now

#484

Post by JMTQp8lwXL » Mon, Apr 12, 2021, 6:58 PM UTC

dcolkitt wrote: post #73

> It's easier now to start and grow a company than it has ever been. That means more people start them, that those who do get better terms from investors, and that the resulting companies become more valuable. This may be a quibble, because I think Paul Graham really means a certain type of high-growth startup in mind when he says "start a company". But the rate of new business formation in the US has fallen off a cl…

> Nobody becomes a billionaire from starting a landscaping service or an auto body shop.

If that's your terminal investment, correct. But if you take that $100k you earned from your landscaping service, or in Buffet's case, selling newspapers and detailing cars, you can continue to apply business acumen and perhaps one day reach $1 Billion. Wealth begets more wealth.

Re: How People Get Rich Now

#485

Post by efficax » Mon, Apr 12, 2021, 6:58 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…

stock based compensation exists for C-level employees because it allows them to reduce their tax burden by taking their income via long term capital gains. It's still income!

Re: How People Get Rich Now

#486

Post by thegrimmest » Mon, Apr 12, 2021, 6:59 PM UTC

lotsofpulp wrote: post #470

thegrimmest wrote: post #440

Earlier quoted context omitted.

Doesn't the article point out that this is pretty much the normal condition of life, with a brief interlude from the 50s into the 80s? Yes, life is unpredictable, bad things happen for no reason. This is a moral condition we all have to accustom ourselves to. I'd speculate that the pain our society seems to be going through now represents a correction towards the normal condition, and that we should adjust our expect…

The gist of your original comment was that life has been getting better for everyone. But if you also claim people need to adjust their expectations downward, then some things are not getting better for everyone. I know that people from the 50s to the 80s didn't have internet, healthcare technology, medicines, smartphones, etc like today. But obviously there is something to be said for the stability or utility of kno…

> stability or utility of knowing that your children will most likely have a better future than you did

Depends on how you qualify "better". By the listed measures, this is still the case. By available land/population this is clearly not. Do we have any reason to believe our children will not have better healthcare, nutrition, access to information, etc than we do?

If we don't, then what justification is there for agitation?

Re: How People Get Rich Now

#487

Post by alpha_squared » Mon, Apr 12, 2021, 7:00 PM UTC

drexlspivey wrote: post #480

alpha_squared wrote: post #465

Earlier quoted context omitted.

> John Doe stacking pallets at the Coca Cola factory really won't produce much better top or bottom line results for the business if you offer him a stock bonus. His forklift only drives so fast. A counter-perspective would be that John Doe becomes incentivized to improve efficiency and innovate in the process. People are not machines or primitive animals. Humans are capable of creative problem-solving. Note: stock o…

> Note: stock options are not stocks. You're not given a share in the company, you're given the opportunity to invest in the company. You have to put money in to _potentially_ get money back. Stock options and shares are pretty much equivalent. If the stock price goes up the option goes up (by a ratio). You don’t have to put your own money in, i.e you get 100 options every quarter, you sell 50 of them to get the mone…

> i.e you get 100 options every quarter, you sell 50 of them to get the money to exercise the other 50.

And lose the opportunity at longer-term gains for the ability to afford the short-term cost. They're really not equivalent at all. I know they're billed that way, but there are very real reasons startups forgo IPO for so long and remain on the options track in the meantime. Startups can offer stocks and often choose not to.

Re: How People Get Rich Now

#488

Post by benzor » Mon, Apr 12, 2021, 7:00 PM UTC

heylook wrote: post #458

benzor wrote: post #324

There's some nuggets of truth in here, but I am disappointed that this article sidesteps what I feel is the most important reason for startup success in 2020: easy and abundant access to cheap capital. - Interest rates are at all time lows, borrowing is cheap - The Fed's balance sheet is at an all-time high. The economy is flush with cash, particularly the investor / VC class - This excess cash creates an (arguably a…

> - Large unicorn startups that are perpetual money losers continue to operate only because they are effectively subsidized by regular capital raises. Look no further than all the Silicon Valley darlings such as Uber, Netflix, AirBnb, Tesla, and so on. All of them would cease to exist without continued capital injection from secondary share offerings or VC raises You should look up the financial statements of the com…

Apologies for some hastily chosen examples. I think the point still stands if you consider the following companies: WeWork, Lyft, Snapchat, Pinterest, Dropbox, Slack, Casper, Lime, Peloton, Beyond Meat, Wayfair, Zillow.

More generally speaking, take a look at Goldman Sachs' Non-Profitable Technology Index:

https://pbs.twimg.com/media/EsRVCiMXIAE7xlA.png

Re: How People Get Rich Now

#489

Post by missedthecue » Mon, Apr 12, 2021, 7:03 PM UTC

cblconfederate wrote: post #281

CivBase wrote: post #177

> 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 th…

> What's stopping hedge fund management firms from racing to the bottom by competing for customers? Regulatory capture.

What regulations prevent any given firm from offering 1 and 10?

Re: How People Get Rich Now

#490

Post by giantg2 » Mon, Apr 12, 2021, 7:03 PM UTC

jodrellblank wrote: post #474

giantg2 wrote: post #50

I just wish I was financially independent. When I buy a Powerball ticket (maybe every other year), I don't hope for the jackpot. I just hope for the million dollar prize. Edit: why downvote? This is how I feel. This is my only opportunity to make "real money".

> Edit: why downvote? Every thread about money comes with some "if you don't want it, give it to me!", "I wish I had money", "If I had money I'd pay for my wife's college debt!!!", "I dream of a million dollars", just like every internet thread that hints of a woman posting gets some "no woman has ever spoken to me before, can I see your tits?" drooling. Drool doesn't make a good comment.

I didn't phrase it like your example comments. Isn't it at least important to let other losers like me know they are not alone? Otherwise you end up with biased representation that everyone on here has made millions and are successful company owners.