How People Get Rich Now • Hacker News Board

Re: How People Get Rich Now

#631

Post by plandis » Mon, Apr 12, 2021, 9:19 PM UTC

areyousure wrote: post #514

jedberg wrote: post #213

Earlier quoted context omitted.

Unless it's changed recently, I believe there is exactly one person on the billionaires list that started life in the bottom quintile -- Oprah. So you have a good question is all I'm trying to say.

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…

I think this is misleading since Jeff Bezos’ adoptive father (adopted when he was 4) was a petroleum engineer, and his grandfather was a director in the Atomic Energy Commission according to Wikipedia.

Re: How People Get Rich Now

#632

Post by ikeboy » Mon, Apr 12, 2021, 9:20 PM UTC

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…

The companies are much bigger today.

If you run a company that's 10 times as big, why is it surprising that you're getting 10 times the compensation? You'd need to compare to similarly sized companies today. Instead, they look at the top 350 companies now and then.

Re: How People Get Rich Now

#633

Post by areyousure » Mon, Apr 12, 2021, 9:23 PM UTC

jedberg wrote: post #628

throwaway_1301 wrote: post #572

Earlier quoted context omitted.

> 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 n…

Ok so Bezos was born in a low quintile, but then jumped when his mom married a wealthy person when he was 4. He effectively had the same advantages of a rich person through his adopted father's success.

His father was a Cuban refugee who came to the US alone as a 16-year old.

Re: How People Get Rich Now

#634

Post by bradlys » Mon, Apr 12, 2021, 9:24 PM UTC

jkubicek wrote: post #582

joshuamorton wrote: post #302

Earlier quoted context omitted.

> 2000sqft, still 3-4 bedroom, 4000-8000sqft lot, 2-car garage if you're fortunate In what way is this not "comfortable"? What is your definition of "comfortable"? Like, I grew up in a 3BR, 2 car garage house that was You're describing an inflated, luxury lifestyle. You even sort of admit it when you say "very comfortable lifestyle for most people in tech". That's not "very comfortable", that's "very comfortable for…

> You're describing an inflated, luxury lifestyle. Exactly. I consider a "comfortable" lifestyle to be a 3BR house in a safe neighborhood, 2 reliable cars, 2 week+ domestic vacations/year, plus saving enough to give a nice cushion in case of emergencies / retirement. I'm terrible with budgeting / saving and I was doing this working for a startup on a $120k/year salary. Granted, this was 10 years ago and housing has a…

Sorry, $200k isn't enough. You won't get the house. I know because I've applied. No landlord is renting out homes to single income in the peninsula at $200k/yr. $400k at FAANG - yes (they're all afraid of people losing their jobs at startups and lots of FAANG out there to rent them homes up). But, again, we're talking about "very comfortable" - not comfortable. Not okay. Not "I managed". Very comfortable - something people actually want, not just live with.

And I don't put renting in the "very comfortable" category. Nor do I put "reliable" cars or domestic vacations. Safe neighborhood? It's expensive - $2m expensive.

Do you have any real insight to the CURRENT housing market in the SF Bay Area? Housing is the big cost. It's more expensive to have a garage for a Porsche than the Porsche itself. I can literally go out tomorrow and buy a 911 but CANNOT afford to put it in a garage. That's how fucking ridiculous it is.

Re: How People Get Rich Now

#635

Post by bradlys » Mon, Apr 12, 2021, 9:27 PM UTC

BlargMcLarg wrote: post #468

bradlys wrote: post #263

Earlier quoted context omitted.

Everyone argues about this but for most people in tech - $400k/yr does not give you a "very comfortable" lifestyle. You cannot afford a $2m home. A $2m home isn't even that comfortable in the peninsula. (Varies on location but it'll probably be under 2000sqft, still 3-4 bedroom, 4000-8000sqft lot, 2-car garage if you're fortunate, will likely require $200k+ in renovation/repairs on move in, nothing lavish) Good luck…

>for most people in tech The majority of people in tech do not work in Silicon Valley or even US tech hubs for that part. Friendly reminder entire continents across either side of the US coast by with less than 15% of that number and would live extremely comfortable lives with just the 100k that often gets tossed around here.

omfg. dude, we're not comparing devs in developing countries to people in SV. What kind of troll comment is this?

Is it a surprise that cost of living DIFFERS WILDLY based upon LOCATION?

Re: How People Get Rich Now

#636

Post by jeffreyrogers » Mon, Apr 12, 2021, 9:29 PM UTC

It's a bit disingenuous to say 1/4 are getting rich from investing. They are getting rich because of the leverage embedded in the standard 2-and-20 payment agreement where the hedge fund managers get 2% of assets under management and 20% of profits above some threshold. Plenty of not particularly good hedge fund managers get really rich because they can convince wealthy institutions to give them money.

The VC industry is the same way. Most funds' returns are poor, though there are obvious exceptions, just as there are in the hedge fund industry.

Edit: the leverage is that the GPs (general partners) usually only put up 5% max of the total assets under management (the rest comes from the LPs (limited partners), the pension funds, endowments, high-net worth individuals, etc. invested in the fund) but get 20% of the profits.

Re: How People Get Rich Now

#637

Post by Ericson2314 » Mon, Apr 12, 2021, 9:29 PM UTC

csbartus wrote: post #607

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.

Truely it does.

Re: How People Get Rich Now

#638

Post by fallingfrog » Mon, Apr 12, 2021, 9:30 PM UTC

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…

Yeah much of the innovation has been in ways to elude labor laws (Uber) or ways to get rid of labor unions (moving production to China) or ways to hack tax laws (stock buybacks, shell companies, always showing zero profit on the balance sheet). That’s where the profit comes from.

Re: How People Get Rich Now

#639

Post by dlp211 » Mon, Apr 12, 2021, 9:30 PM UTC

harimau777 wrote: post #609

WalterBright wrote: post #557

Earlier quoted context omitted.

> 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).

Not to mention that you miss out on one of the bigger wealth building opportunities, the IPO. While not true for every company, tech IPOs have been gangbusters as of late. I would have loved to invest in AirBnb at their last evaluation before IPO. But that is only available to the truly wealthy.

Re: How People Get Rich Now

#640

Post by fellowniusmonk » Mon, Apr 12, 2021, 9:30 PM UTC

gen220 wrote: post #567

fellowniusmonk wrote: post #413

Earlier quoted context omitted.

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…

I definitely relate to wanting to birth projects like this into the world! The ending-involuntary-homelessness one sounds particularly interesting to me, personally. I'd love to hear more about it. A follow-up question, is there a reason you want the stab to be well-funded? As opposed to a FOSS, nominal-fee-for-hosting-bootstrap? From my limited perspective, the worlds' most successful technologies, in terms of (valu…

I agree with what you are saying, another thought I have, which could be incorrect, is that there is a reason that so many second startup attempts by founders are successful. I think it has to do with general experience and many other things but one of the big ones is that a first startup that does "modestly" well or has a decent exit can setup a founder in a place where they have more breathing room financially for the next, a 20k chunk of cash gives a lot of breathing room for savings/disaster that takes stress off.

I almost had it with my talent booking agency (which was bootstrapped over nearly 4 years), and then the money we were making went to a co-founders head and he blew up the company after developing a coke/sex addiction that unhinged his mental health, he couldn't handle the money and the access it gave him and that was at ~50k mrr.... it was like a whole world opened briefly opened up for me before getting crushed.

For me personally I experienced that having an income source not dependent on personal labor has a very strong benefit for being able to focus on execution and setting the company up strategically, it also let me hire devs who I trusted and had a compounding effect on speed of development. I like to think I am a good dev, but I'm not as good as 3-4 good devs, I can't afford that hiring in my current state.

For the homelessness thing in particular, well funded also means well connected, it means you have buy in and backers and vested people going to bat for you. It means I don't have to do all the dev on my own.

That's my current thinking at least.