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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#601

Post by FireBeyond »

Quarrelsome wrote: post #69
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.

> I'm curious how many of them did so by leveraging family or inherited wealth. Its interesting to note that many of our own prized meritocratic examples owe their parents in terms of intellectual inheritance or first-round funding. I believe Trump's father (a billionaire in 2018 dollars) was given start up capital by his father who owned a diner in gold territory during the rush. Elon Musk I believe also was the ben…

> Elon Musk I believe also was the beneficiary of a small amount of investment from his parents.

There's so much mythology around this. I've heard the argument, "he had no support from his father", and I've read in more detail that one of the examples of said lack of support was "Elon and his friends wanted to buy and operate a video game arcade when they were teenagers, but his father refused to provide financial assistance".

There's a whole world between "deadbeat" and "wouldn't buy his son and his friends their own video arcade".

Re: How People Get Rich Now

#602

Post by 908B64B197 »

fellowniusmonk wrote: post #413
gen220 wrote: post #332

Earlier quoted context omitted.

Speaking as someone with a not dissimilar background to yourself, and happening to have friends in similar circumstances. You might want to consider what it is, exactly, that you want out of your career. You already are in a position to give your children a 10x better life, if that’s something that drives you (this is a common denominator for a lot of people). The stress of chasing the 100x and the fear of the 0x, wi…

The heart defect thing definitely puts me in a weird psychological bucket when it comes to underlying drive/motivation. I've only met one adult that had similar feelings/views and they had childhood multiple recurrence leukemia. I have some concepts that I want to try to bring into the world. One is a first principles notes/app platform I've been using for personal use that upends how apps and data relate. The goal i…

> Another is a platform for developers to "never" interview again and for high signal employed developers to capture 50/60% of profits going towards recruiters (piggy backing off my work with speaking talent and how speaker bureaus work.)

That's interesting. You mean to get rid of "Coding Interviews?"

Re: How People Get Rich Now

#603

Post by internetslave »

cupofcoffee wrote: post #422
internetslave wrote: post #294

Earlier quoted context omitted.

False. I personally know multiple people that have done it. And I knew them before they got rich

Right. Even if you knew 100 people that all made startups and made 10M+ it would still prove nothing. What percentage of startups do you think succeed?

I’m kinda busy to go all into this, but generally people who went to top schools and raise from top vcs gave very good outcomes. The problem is when you lump in people with bad or mediocre career outcomes who try to start a company. The data is very misleading, getting funding from Andreesen Horowitz leaves a huge chance of success.

Re: How People Get Rich Now

#604

Post by 908B64B197 »

technofiend wrote: post #114
VBprogrammer wrote: post #34

Earlier quoted context omitted.

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…

>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 parents with business / political contacts in the industry you are trying to move into. Well that and understanding how to leverage those contacts. I have people in my social circle that could serve as contacts, but the idea of asking for that makes me extremely uncomfortable. And if…

> I think the kind of people who know how to operate in those circles have a skillset that's not taught in a CS/EE curriculum.

You nailed it. I don't think there's any formal way of learning it either.

Re: How People Get Rich Now

#605

Post by confidantlake »

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…

This distinction seems meaningless. At the end of the day, the stockholders own the business. They are paying the salaries of both the CEO and the pallet worker, regardless if it comes in the form of cash or stock.

Also wages don't always come from cashflow. Amazon lost money for its first X years. Salaries and everything else were covered by investor cash.

Re: How People Get Rich Now

#606

Post by medvezhenok »

dominotw wrote: post #571
medvezhenok wrote: post #378

Earlier quoted context omitted.

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.

https://accept.inc/ converts your mortgage approval into an all-cash offer. (Edit: looks like that's only for Colorado)

The craziness going on right now is due to several factors: (1) all time low supply due to pandemic restrictions/fears; (2) Work from home transforming housing values (single family homes a lot more appealing if you only work from the office occasionally); (3) Millennials aging into the housing market and boomers holding on to their properties (see 1) - also a lot of stock is now owned by investment companies / pension funds past 2008; (4) Housing is the safest way to take a leveraged short on the US dollar (which a lot of people fearing inflation want to do); (5) Capital flight from other countries like China (though that was more of a factor pre-pandemic) - real-estate is the only industry where anti money laundering provisions are severely watered down / non-existent.

Re: How People Get Rich Now

#607

Post by csbartus »

Ericson2314 wrote: post #235

I'm really glad even Hacker news is calling out PG's bullshit now.

Usually I find his articles entertaining, sometimes thought-provoking.

This one is none of these.

I've commented my own objections, read others'. What strikes me is that this article was proof-read by (the usual) people, and no one realised it will blow up on HN.

That smells a bubble in which PG/YC is.

Re: How People Get Rich Now

#608

Post by lupire »

pradn wrote: post #555
domk wrote: post #155

This essay feels really dishonest. It tries to simplify the vastly complex problem of income inequality, on which there is a sea of existing, detailed research, into a simple "it's easier to start companies now" argument. And it doesn't even explore that argument in that much depth. What about bottom incomes? Why have those barely increased in real terms in the last 30 years, while the top 1% of incomes has been shoo…

His constant defense of high-risk startups also acts as a defense of his own wealth. If you can do it, and deserve wealth for succeeding, I must deserve my wealth for the companies I've founded. I'm not saying one shouldn't be rewarded for founding useful businesses. I'm saying there's a whole lot of mystification, self-mythmaking, and luck involved. For the average person, being born to a somewhat comfortable family…

pg has never cared about the average person. His thesis has always been that average people are bad and nerds should take over the world.

Re: How People Get Rich Now

#609

Post by harimau777 »

WalterBright wrote: post #557
bo1024 wrote: post #547

Earlier quoted context omitted.

This seems to contradict his analogy between 2020 to, say, 1890. Instead of a bunch of people starting small local businesses and gaining moderate wealth, we have winner-take-all dynamics.

> winner-take-all You can buy stock in winning companies and get your share of the winnings.

That's only the case if you can afford to buy the stock (and more specifically afford to buy enough of the stock to make a difference).

Re: How People Get Rich Now

#610

Post by xur17 »

Alex3917 wrote: post #597
alpha_squared wrote: post #454

Earlier quoted context omitted.

You're not wrong, but the perspective feels like missing the forest for the trees. So what if stock-based compensation was uncommon in 1965? The average employee doesn't get to benefit from the very real contributions they've made to the company, while the CEO does benefit. Why didn't employee profit-sharing increase at the same rate as non-salary compensation did for CEOs? That's still relevant. Additionally, your c…

> Why didn't employee profit-sharing increase at the same rate as non-salary compensation did for CEOs? Because employees generally hated profit sharing and created unions to fight against it. Joseph Blasi talks about this in his book The Citizens Share. And it's not like he's some crank conservative, he's the economic advisor for Elizabeth Warren.

A good example of that [0]. Amazon is quoted as saying that hourly employees prefer the "predictability and immediacy of cash to RSUs", and I imagine Amazon would prefer to give RSUs, so this is probably accurate.

[0] https://www.theverge.com/2018/10/3/17934194/amazon-minimum-w...

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