How People Get Rich Now • Hacker News Board

Re: How People Get Rich Now

#651

Post by WalterBright » Mon, Apr 12, 2021, 9:39 PM UTC

shuckles wrote: post #596

gip wrote: post #584

Earlier quoted context omitted.

What you are missing is that the resources in the world that matter are bounded. So if a minority is creating most of the value at scale, they will be able to redirect most of the resources to themselves. This drives the increase in inequality. That is why thinking purely in financial terms is misleading. It's not because everyone has more $$$ in the bank that everyone is better off.

Is it really the case that Jeff Bezos is consuming a million times more finite resources than someone whose net worth is $100k? It seems to me like what you buy with virtually infinite money is status like hanging out or sleeping with celebrities, a seat in important rooms, and assets. There is only so much additional jet fuel and human labor a multi-billionaire can consume.

SpaceX, etc. That's what you do with billions to spend.

Re: How People Get Rich Now

#652

Post by Aerroon » Mon, Apr 12, 2021, 9:43 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…

Imagine looking at the 5 deadliest plane crashes in 1970 and comparing them to the 5 deadliest plane crashes in 2010. You find that more people died in these crashes in 2010 than 1970. You wouldn't conclude that air travel is now less safe than in the 70s, would you?

There was a lot more air travel in 2010 compared to 1970. The 5 deadliest flights makes up a much smaller portion of all flights in 2010 than it did in 1970. It's a misleading comparison. You should instead look at the number of deaths per passenger or per passenger mile.

You have to think of the same point when looking at the "top 350 companies in the USA in 1965 vs 2017".

Are the companies the same size in 2017? Do CEOs have the same amount of responsibility in 2017? Is the complexity of managing the company the same in 2017 as it was in 1965? What percentage of all companies do these top 350 make up?

These are all factors you might want to take into account when looking at a specific number of top companies.

I'd be curious to know what the numbers would look like if they looked at the top 1% or top 0.1% of companies in the US instead. Or perhaps even the average and median companies. My guess is that those stats wouldn't be politically as useful. I imagine that you'd still see a growing disparity, but a smaller one.

Re: How People Get Rich Now

#653

Post by [deleted] » Mon, Apr 12, 2021, 9:44 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.

[deleted]

Re: How People Get Rich Now

#654

Post by paulmd » Mon, Apr 12, 2021, 9:46 PM UTC

WinstonSmith84 wrote: post #623

lanstin wrote: post #600

Earlier quoted context omitted.

Usually somehow the execs have sold out just before the bad news, while the regular employees haven't liquidated their 401s/stock plans.

Usually? Please ... That's called insider trading and those who do that ends up in jail or at best have to hide in the sun for the rest of their life.

A recent example would be Intel's CEO Brian Krzanich dumping as much stock as he could after learning about Meltdown and before the news went public.

https://arstechnica.com/information-technology/2018/01/intel...

The article also cites Equifax's CEO selling before the news of their data breach went public.

And that's just the ones that are prominent enough that everybody knows about it.

Re: How People Get Rich Now

#655

Post by WalterBright » Mon, Apr 12, 2021, 9:46 PM UTC

refenestrator wrote: post #568

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.

That would make sense as a post-exceptional-transformation windfall. Not as standard comp for keeping the seat warm while saying "yeah do more of that thing that prints money".

Why would any company hire a CEO and pay him millions to warm a seat? Why would the stockholders put up with that?

Re: How People Get Rich Now

#656

Post by giantg2 » Mon, Apr 12, 2021, 9:49 PM UTC

bradlys wrote: post #635

BlargMcLarg wrote: post #468

Earlier quoted context omitted.

>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?

I don't see your comment as a valid response to the parent. They were not talking about developing countries. They were talking about in the US. They even pointed out that most devs do not live in the SV area (in response to your statement about most people in tech...). The majority of the people in tech in the US do not live in SV and the median salary for a dev is about $100k-110k.

Re: How People Get Rich Now

#657

Post by lazide » Mon, Apr 12, 2021, 9:50 PM UTC

xur17 wrote: post #624

liveoneggs wrote: post #620

Earlier quoted context omitted.

an RSU is a massive tax problem, for one thing.

How so? Isn't it just taxed as normal income at vesting time? Most employers automatically sell enough to cover the tax withholding to solve any issues.

Wash sales, long term/short term gains and associated tax issues, RSU withholding which is a fixed amount and not based on the income tax withholding, and a typical broker account to sell/get money are massively more complicated than a direct deposit to your bank account and money back from the government at the end of the year unless you massively screw it up.

By number, most of Amazon’s employees are working minimum wage and probably don’t have much of a balance. Many of them might get evicted if pay gets delayed even a couple weeks.

Re: How People Get Rich Now

#658

Post by CameronNemo » Mon, Apr 12, 2021, 9:50 PM UTC

mmmmmbop wrote: post #611

qzw wrote: post #464

I'm rather disappointed PG would think that the Forbes wealth list could support any kind of conclusion whatsoever. One of the biggest reasons that the top of the list is filled with tech billionaires is that their wealth is relatively transparent, being mostly in the form of stock holdings in publicly traded companies and often directly disclosed. This makes it much easier for Forbes to estimate their net worth with…

Genuinely curious: Do you have any more background on this? Who are these rich people that are not listed in Forbes?

I've never looked at that list so I have no idea who is on it. Is there a reason I care who the richest people on earth are?

Re: How People Get Rich Now

#659

Post by ashtonbaker » Mon, Apr 12, 2021, 9:51 PM UTC

samatman wrote: post #625

ashtonbaker wrote: post #599

Earlier quoted context omitted.

This is a huge part of "start up culture" though - like any religion (or lottery, or whatever), superstition plays a large part, and the most important superstition is that those who have been successful before know how to do it again.

It's not religious to observe that founders who made a successful exit are well-poised to do it again. They're swimming in money, they have a bunch of investors in their phone contacts, and they know all the ins and outs from the last time they put a startup through its life cycle. How could they not be in better shape than some kid slurping ramen in his first YC cohort? This does leave two big wildcards: the idea (s…

No real argument with this! I think we're talking about different things.

If I could put my difference in opinion in my own words, it would be that I believe many people play the startup game with the right "intrinsic" qualities - hard work, brilliance, etc - many more than the number who exit with a billion dollars. Hence, "lottery". Of course, some of that luck can carry forward in terms of experience, networking... That's not really my point either.

If Paul Graham wants to join our startup, I wouldn't have to disavow my beliefs to welcome him with open arms. That would obviously be to our great benefit. The leadership team would tout his resume, and look forward to his insightful contributions. I, on the other hand, believe that his primary contribution would be to generate a bunch of "Paul Graham Joins X Startup" headlines, increasing our value in the eyes of VC.

The religion is this: you can hire Developer X or Developer Y. "X" was an early employee at a successful startup, where "Y" seems much more technically proficient. I think many startups choose "X" and don't even consider whether they're doing that for status within the startup world (which is what I believe), or because they genuinely believe that having a successful startup under their belt means - even in the face of evidence to the contrary - that the company is more likely to achieve a billion-dollar valuation with "X" than with "Y". You could argue for either justification, honestly, but it's the failure to see a distinction that strikes me as religious.

And also, Paul Graham's ability to found another successful company aside, the clinging to his every word is /definitely/ religious to me.

Re: How People Get Rich Now

#660

Post by ZephyrBlu » Mon, Apr 12, 2021, 9:52 PM UTC

samatman wrote: post #625

ashtonbaker wrote: post #599

Earlier quoted context omitted.

This is a huge part of "start up culture" though - like any religion (or lottery, or whatever), superstition plays a large part, and the most important superstition is that those who have been successful before know how to do it again.

It's not religious to observe that founders who made a successful exit are well-poised to do it again. They're swimming in money, they have a bunch of investors in their phone contacts, and they know all the ins and outs from the last time they put a startup through its life cycle. How could they not be in better shape than some kid slurping ramen in his first YC cohort? This does leave two big wildcards: the idea (s…

I think there's another factor you've missed, which is the market. And I think the market is a pretty important factor in the success of a company.