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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#701

Post by coldtea »

aerosmile wrote: post #670
jasonwatkinspdx wrote: post #575

Earlier quoted context omitted.

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. Makin…

That argument sounds familiar, but it's not reflected in the latest YC stats (32% of founders come from underrepresented groups). I feel good knowing that one of the fastest career paths in the history of the world has a 32% admission rate to practically anyone anywhere in the world (again, if you're feeling down about your chances as a US citizen, spend a minute talking to one of the Nigerians in YC and your perspec…

>I feel good knowing that one of the fastest career paths in the history of the world has a 32% admission rate to practically anyone anywhere in the world

Anybody, as long as they had a westernized upbringing, access to computers and education, and a middle class or higher status in their country...

Re: How People Get Rich Now

#702

Post by lazide »

jfk13 wrote: post #590
tjs8rj wrote: post #522

Earlier quoted context omitted.

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…

> As long as we are all free to be the founders or the employees But we're not. Much of it comes down to the simple lottery of the circumstances into which you were born. If you have an inherited trust fund, or wealthy parents and friends to fall back on, you can take huge risks, one of which might eventually lead to a multi-million dollar payout even if several of them fail dismally in the meantime. But if keeping a…

As someone who grew up lower middle class to poor, with parents that struggled to put food on the table for a great many years, and who dropped out of an abysmal highschool to go full time into tech at 16 - and is now in stealth mode founding a startup - while what you are saying is OFTEN true, it is never ALWAYS true.

The things I got from my parents are things many people have had - some of which; such as help buying a terrible beat up old ‘78 Dodge Van to move states to my first real job, or a relentless drive to get better, to DO better, a great many people have had. I’ve also been lucky to get into the industry when someone motivated but without credentials could get started.

I’ve had zero money from them since I started working at 16, and before that it was a minimal allowance I earned through hard work with chores. I earned the $200 to buy my first computer digging holes and repairing fences.

Don’t buy into the myth it’s not possible. It’s self defeating. Also, don’t buy into the myth it’s easy for anyone - even those from money. It will test you like nothing else will, and I’be done enough hard things over the year to know

Re: How People Get Rich Now

#703

Post by joshuamorton »

missedthecue wrote: post #471
joshuamorton wrote: post #453

Earlier quoted context omitted.

> They come from diluting Wall Street. Yes, until the company offers a stock buyback (which these companies collectively spent more than 50 billion on in 2020)

ok. But then they're using cash from the business to get the share count back down to prior levels, and it's still a net loss for Icahn. There are only 100 percents. If the management team gets more ownership through dilution, it means Carl Icahn owns less.

But the employees don't gain anything. You've modeled this is a fight between wall street and the CEO, entirely forgetting about employees who get no (or trivial) stock compensation.

Hypothetically, a company could pay 100M in stock to the CEO, and then issue 100M in stock buybacks to the CEO. This is functionally equivalent to paying the CEO 100M, but it wouldn't count in your salary numbers. And notably, both of these, stock buybacks and CEO pay, dilute wallstreet in the same way. But neither benefits employees.

To use the JP morgan example, (and this is roughly equivalent for Google), the company could stop stock buybacks, and instead pay every employee an additional $150,000.

That results in the CEO and wall street getting less money, and employees getting more.

Walmart and Coke modulate the share price in other ways, so stock buybacks won't tell a particularly interesting story.

Re: How People Get Rich Now

#704

Post by wanderer2323 »

InitialLastName wrote: post #393
mattzito wrote: post #214

Earlier quoted context omitted.

It's impossible to know for certain, of course, but it seems highly unlikely that any of those writers will be quoted beyond the lifespan of contemporary readers (except potentially in scholarly books about rationalism/startups/etc). How many authors from the 1940s are still widely read, especially for essays/non-fiction?

Excepting the WWII memoirs (because I'm not sure how I want to count either Anne Frank, Elie Weisel or Winston Churchill in terms of "authors from the 1940s"), among authors whose nonfiction works are still read, there are a few names that do occur to me: George Orwell, Friedrich Hayek, Simone de Beauvoir, John Maynard Keynes, Jean-Paul Sartre For fiction there are obviously many more whose works have come through to…

Lewis would be my example for nonfiction. Narnia is fun and all, but it's stuff like "The Inner Ring" (https://www.lewissociety.org/innerring/) where he really shines.

Re: How People Get Rich Now

#705

Post by [deleted] »

neilk wrote: post #329

There are a lot of people who have already taken pg to task over the rather thin chain of reasoning (anecdata about the Forbes 100 -> grand societal conclusion) But what about the initial claim, that inherited wealth now means very little? Tech founders have always come from at least the upper-middle class (I'd say that's roughly where I hail from). But that seems to be trending upwards. Increasingly, "tech" founders…

[deleted]

Re: How People Get Rich Now

#706

Post by markvdb »

missedthecue wrote: post #592
markvdb wrote: post #529

Earlier quoted context omitted.

> If there is outrage over CEO pay, it doesn't make sense to come from the unions or left politicians, it should be coming from activist hedge fund billionaires, which it does. One doesn't have to be a shareholder or even a direct stakeholder in a specific company to claim the right to outrage over this growing inequality in pay.

The question is whether anyone is worse off because of it, and my comment points out that contrary to popular rhetoric, if anyone is getting hurt by it, it's not the employees. If you think nobody is getting hurt by it, it's not a problem, it's just envy.

It's certainly possible to view these things from other perspectives than a narrow transactional economic perspective. Can you imagine some of those?

Re: How People Get Rich Now

#708

Post by aerosmile »

coldtea wrote: post #701
aerosmile wrote: post #670

Earlier quoted context omitted.

That argument sounds familiar, but it's not reflected in the latest YC stats (32% of founders come from underrepresented groups). I feel good knowing that one of the fastest career paths in the history of the world has a 32% admission rate to practically anyone anywhere in the world (again, if you're feeling down about your chances as a US citizen, spend a minute talking to one of the Nigerians in YC and your perspec…

> I feel good knowing that one of the fastest career paths in the history of the world has a 32% admission rate to practically anyone anywhere in the world Anybody, as long as they had a westernized upbringing, access to computers and education, and a middle class or higher status in their country...

Fair enough. But having all those things in Nigeria still puts you way behind someone who was born into a poor family in the US (out of around 200 founders I met at YC, far more of them reminded me of Garry Tan - who is awesome! - than of the Winklevoss twins). It's not ideal in either case, but some things are less ideal than others.

Re: How People Get Rich Now

#709

Post by PhilipTai »

missedthecue wrote: post #586
heavyset_go wrote: post #535

Earlier quoted context omitted.

This analysis is about as apt as saying, "Larry Ellison's salary was only $1, so what are you complaining about?"

The guardian article and the commenter I replied to are pointing out the difference between 1965 and 2020 as if it's a problem. A problem is defined as something that has a negative impact on people. My analysis points out that the only people that modern CEO pay has a negative impact on is the shareholders. I illustrated that it makes literally no difference to your average floor worker whether the CEO gets $0 or $2…

No. There is really no difference whether CEO is paid in cash or in stock, regarding the negative impact of the pay.

Scenario 1: CEO get paid $50 million in stock. Scenario 2: CEO get paid $50 million in cash. And then the company raise $50 million from stock market, so that it will have the same amount of cash as scenario 1.

They are the same.

Re: How People Get Rich Now

#710

Post by effingwewt »

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…

Also, from personal experience people with those support networks almost always say 'And I did it all on my own!', though that's almost never the case.

They don't see borrowing money or using connections as a favor. I've also heard them say 'If I was born today to a broke family I'd still be rich by 30! I'm a hustler!'

These were my own family members and work colleagues, as well as an ex-girlfriend or two.

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