How People Get Rich Now • Hacker News Board

Re: How People Get Rich Now

#571

Post by dominotw » Mon, Apr 12, 2021, 8:23 PM UTC

medvezhenok wrote: post #378

frongpik wrote: post #209

Earlier quoted context omitted.

It's not conspiracy, but an observation that hamburgers, cars, houses and yachts inflate at different rates. The gov inflation concerns hamburgers, but someone's making 200k really needs housing and that inflates much faster.

Here is housing: https://fred.stlouisfed.org/series/CPIHOSNS House prices are simply bonds tied to rent value and interest rate and affected by certain demographic trends. The all-told carrying costs of a mortgage right now are actually lower than they were 30 years ago, considering inflation (the principal might be higher and you don't get the tailwind of dropping rates to rebalance and whatnot, but it doesn't chang…

> but you can generally buy things with as low as 3.5% down

no way. It is so competitive here that buyers are inundated with all cash offers.

Re: How People Get Rich Now

#572

Post by throwaway_1301 » Mon, Apr 12, 2021, 8:23 PM UTC

jedberg wrote: post #528

areyousure wrote: post #514

Earlier quoted context omitted.

https://www.forbes.com/real-time-billionaires/ #1 was born to a teenage mom (and an alcoholic/deadbeat dad). Since she was still in high school, I assume she was probably in the bottom quintile of income. #7 was given up by his mother and adopted. #9 was born in the Soviet Union. It's likely his family's income (in rubles) was in the bottom quintile of the United States at the time. (Sources I've found suggest that t…

When I look at that list, Jeff Bezos is #1. The first woman on the list is at #10 and inherited her wealth. Are you looking at a different list? Also, people born in foreign countries had completely different experiences, and more importantly, what is relevant is if they were in the bottom quintile in their own country. If you're super rich in your own country then you have a lot of opportunity. For example Sergey Br…

> When I look at that list, Jeff Bezos is #1. The first woman on the list is at #10 and inherited her wealth. Are you looking at a different list?

I think the comment does refer to Jeff Bezos. Here is the relevant section from Wikipedia:

"At the time of his birth, his mother was a 17-year-old high school student and his father was 19.[17] After completing high school despite challenging conditions, Jacklyn attended night school while bringing baby Jeff along.[18]"

IMO a 17 year old attending night school is pretty low in terms of economic status.

Also I am sure there are other cases but I know about #17 (Mukesh Ambani) and his father was a petrol bunk attendant - pretty low down even by Indian standards.

Re: How People Get Rich Now

#573

Post by WalterBright » Mon, Apr 12, 2021, 8:23 PM UTC

FireBeyond wrote: post #561

WalterBright wrote: post #543

Earlier quoted context omitted.

> why Because their decisions can drive a company into bankruptcy or transform it into a trillion dollar company. Your average line employee has no such leverage from their actions.

And when they drive it into bankruptcy, the company will still go to court to argue that these bonuses, compensation, parachutes should be paid, regardless. Win-win game. Except for the employees and shareholders.

Stock based compensation goes to zero in bankruptcy.

Re: How People Get Rich Now

#574

Post by throwaway_1301 » Mon, Apr 12, 2021, 8:24 PM UTC

lupire wrote: post #559

areyousure wrote: post #514

Earlier quoted context omitted.

https://www.forbes.com/real-time-billionaires/ #1 was born to a teenage mom (and an alcoholic/deadbeat dad). Since she was still in high school, I assume she was probably in the bottom quintile of income. #7 was given up by his mother and adopted. #9 was born in the Soviet Union. It's likely his family's income (in rubles) was in the bottom quintile of the United States at the time. (Sources I've found suggest that t…

Why would you ignore Musk's father, who raised him? Alcoholic doesn't mean poor, and deadbeat is the wrong term for the father Elon lived with. Elon's "teenage mother" was a famous model.

I suspect that was in reference to Jeff Bezos.

Re: How People Get Rich Now

#575

Post by jasonwatkinspdx » Mon, Apr 12, 2021, 8:24 PM UTC

tjs8rj wrote: post #522

coldtea wrote: post #501

Earlier quoted context omitted.

> The benefits should go to whoever is responsible for the success of the company. This obviously opens up a political can of worms: the Left will say the CEO can't get anything done without the workers, the Right will say the workers can't get organized without the CEO And a pragmatism can say that all kinds of CEOs have driven companies to the ground, reducing their valuation even 1/10 what it was, and destroying t…

A sharper metric: it tends to do with whoever is responsible for the success of the company at the least cost to shareholders. Imagine a company starting out. If they need you to join or they fail, and they can get you for 1% of the company, that founder is rewarded incredibly for securing you with very minor cost to the company, making them rich and you not, even if you are responsible for the success of the company…

The problem with this position is its naivety. Are you going to say with a straight face that all potential founders are equally likely to be funded by investors purely on their probability of success, and not via false signals and stereotyping if not straight up bigotry? That there aren't credentials that can be effectively bought to gain access to that?

Markets are just markets, not oracles of unbiased merit. Making whatever the market does morally normative as you're doing is frankly, evil. They're useful tools, but that is all. They should not be a religion.

Re: How People Get Rich Now

#576

Post by sillysaurusx » Mon, Apr 12, 2021, 8:24 PM UTC

sushisource wrote: post #552

sillysaurusx wrote: post #516

Earlier quoted context omitted.

Hm? That paragraph is accurate. When you're free to work flat-out – as hard as you can, as much as you want – you can make a lot more progress than if you were paid to do the same thing for someone else. 36x may not be the exact multiple, but it's correct within a power of two.

I think you're making the point. Correct according to... what... lol? The preconceived notion that it should be? I don't even necessarily disagree, but, "No, it totally is right" isn't exactly an argument.

Personal experience. But, my experience is merely anecdata. Does it hold true in general?

It seems to. Suppose your company consists of ten people, and its valuation rises to $10M. The value must have come from those ten people. If they weren't at the company, the company would not be worth $10M.

It would be easy to dismiss that example too. After all, I made it up. But that kind of example happens all the time in startups. It's such a striking correlation that you'd now have to explain away many hundreds of examples as coincidences, or claim they're due to other factors like the founders' connections, upbringing, being in the right place at the right time, etc. Those things do matter -- in fact, you'd be hard-pressed to start a successful startup without at least one of those -- but you can't bullshit your way through a startup. Either you've made something people want, or you haven't. And if you haven't, your upbringing and personal connections won't change the fact that your startup is doomed.

So it seems the simplest explanation is probably true: a small group of smart, dedicated people can do enormously valuable work, given the right conditions. And pg's paragraph seems to explain those conditions pretty well -- at least in my experience.

Re: How People Get Rich Now

#577

Post by adwn » Mon, Apr 12, 2021, 8:25 PM UTC

sillysaurusx wrote: post #516

adwn wrote: post #388

Earlier quoted context omitted.

> Every time I read one of PG's posts, it seems like he's working from a narrative that he's trying to conform facts to. Indeed. Compare this gem from [1]: You could probably work twice as many hours as a corporate employee, and if you focus you can probably get three times as much done in an hour. [1] You should get another multiple of two, at least, by eliminating the drag of the pointy-haired middle manager who wo…

Hm? That paragraph is accurate. When you're free to work flat-out – as hard as you can, as much as you want – you can make a lot more progress than if you were paid to do the same thing for someone else. 36x may not be the exact multiple, but it's correct within a power of two.

> Hm? That paragraph is accurate.

No, the assumptions in it are ridiculous in context:

1) "You could probably work twice as many hours as a corporate employee": Okay, maybe you can "work" 80 hours a week, as in "be in the office 80 hours per week".

2) "if you focus you can probably get three times as much done in an hour": No. You can't stay focused for 11.5 hours a day, especially not 7 days in a row, especially especially not week after week after week.

3) "You should get another multiple of two, at least, by eliminating the drag of the pointy-haired middle manager who would be your boss in a big company": No. First, that's already covered by "being focused" in point 2. Second, there will be other aspects that will drag down your raw coding output, like clients, employees, legal matters, or organizational issues. They can be worse than your boss.

4) "Then there is one more multiple: how much smarter are you than your job description expects you to be? Suppose another multiple of three": No. At 80 hours per week, you're not three times smarter/more productive per unit of time than an average employee at 40 hours per week.

Look, I'm not saying that an equivalent compensation of $3M per year for a founder is wrong. I'm saying that those numbers are bullshit. Everyone can make up figures, multiply them, and arrive at any conclusion they want. That doesn't mean there's any truth in them.

Re: How People Get Rich Now

#578

Post by areyousure » Mon, Apr 12, 2021, 8:25 PM UTC

jedberg wrote: post #528

areyousure wrote: post #514

Earlier quoted context omitted.

https://www.forbes.com/real-time-billionaires/ #1 was born to a teenage mom (and an alcoholic/deadbeat dad). Since she was still in high school, I assume she was probably in the bottom quintile of income. #7 was given up by his mother and adopted. #9 was born in the Soviet Union. It's likely his family's income (in rubles) was in the bottom quintile of the United States at the time. (Sources I've found suggest that t…

When I look at that list, Jeff Bezos is #1. The first woman on the list is at #10 and inherited her wealth. Are you looking at a different list? Also, people born in foreign countries had completely different experiences, and more importantly, what is relevant is if they were in the bottom quintile in their own country. If you're super rich in your own country then you have a lot of opportunity. For example Sergey Br…

For reference, the people mentioned are #1 Jeff Bezos, #7 Larry Ellison, #9 Sergey Brin, #13 Mukesh Ambani, and #18 Zhong Shanshan.

And https://en.wikipedia.org/wiki/Zhong_Shanshan "He dropped out of elementary school during the Cultural Revolution and found work in construction."

https://en.wikipedia.org/wiki/Xu_Jiayin "Xu Jiayin was born to a rural family in Jutaigang Village, ... His father is a retired soldier who participated in the Second Sino-Japanese War in the 1930s and 1940s. After the establishment of the Communist State, he became a warehouseman in his home-village. Xu's mother died of sepsis when he was 8 months old. He was raised by his paternal grandmother. After high school, he worked in a cement product factory for a few days and then worked for two years at home."

https://en.wikipedia.org/wiki/Qin_Yinglin "Qin was born in 1965 in Hexi Village... He grew up in poverty.

In 1982, when Qin was in high school, his father saved up money and bought 20 pigs, but all but one died. This motivated Qin to study pig farming at university, so that he could help people in his village earn money raising pigs."

I'm not sure billionaires like Eric Yuan ("collected construction scraps to recycle copper for cash"), Jay Chaudhry ("Chaudhry was born in Panoh, a Himalayan village without running water"), Jan Koum ("When he was living on welfare, Jan Koum's family collected food stamps a couple of blocks"), Isaac Perlmutter ("He emigrated to America, arriving in New York City with only $250"), and Romesh Wadhwani ("He contracted polio at age of 2") count as "super rich in your own country" that would thus "have a lot of opportunity".

Re: How People Get Rich Now

#579

Post by mmsimanga » Mon, Apr 12, 2021, 8:27 PM UTC

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…

Anecdotal. In Africa my observation is that people who grew up poor are more driven than the ones who grew up middle class. Kids of middle class parents often can not tough it out and many tend to be spoilt. Many of my middle class contemporaries live below the standard of living they grew up in. They are less successful than their parents.

Re: How People Get Rich Now

#580

Post by waterhouse » Mon, Apr 12, 2021, 8:27 PM UTC

jonny_eh wrote: post #380

waterhouse wrote: post #347

Earlier quoted context omitted.

> The key issue is that personal wealth, after a point is wasted. Creation of vast personal wealth doesn't really serve society ... How much do you really care after your second billion anyway? What do you think the billionaires' billions are doing? Sitting in a bank account? I think the majority of their wealth is invested , i.e. it is funding industry, which is a good thing. If we assume for illustration that billi…

> What do you think the billionaires' billions are doing? Sitting in a bank account? Yes. Maybe not their own savings account, but in some organizations' bank accounts. Money in the hands of the low to middle class is spent far more efficiently. [1] [1] https://www.americanprogress.org/issues/economy/news/2011/12...

So, let's take Jeff Bezos. Googling a bit, an article allegedly updated Mar 13 says he has 55.5M shares, which at AMZN's price of $3379 is $187 billion; I'm sure both multiplicands have changed but that's probably not far off from the truth. What bank accounts is the $187 billion sitting in? If he sold all his stock, where would that money come from? If he then spent it all on a fleet of private jets, how would that impact the economy?

And if we split Jeff Bezos into 1000 individuals, each of which had about $200 million, and each of which spent half of it on mansions and yachts and invested the rest... would that be an improvement?