How People Get Rich Now • Hacker News Board

Re: How People Get Rich Now

#831

Post by adwn » Tue, Apr 13, 2021, 4:57 AM UTC

shlep21 wrote: post #758

adwn wrote: post #577

Earlier quoted context omitted.

> 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 e…

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. I'm a former software engineer. The best engineers absolutely, genuinely can work very long hours and remain productive. 80 hrs/week might be a bit high, but 65 hours a week at 3x average-programmer-productivity is definitely something that exists in the real world, and although it is…

> [...] and because the rest of us are literally slacking as we post here, and want to believe our slacking is some kind of biological necessity

Maybe that's because we've observed one too many "I work 80-100 hours per week" CEOs, who still find time to write blog posts, keep up with the latest memes, and shitpost on Twitter.

Re: How People Get Rich Now

#832

Post by gip » Tue, Apr 13, 2021, 5:01 AM UTC

WalterBright wrote: post #648

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.

The resources are bounded. The value you can create from those resources is not bounded. Google, Microsoft, Twitter, Netflix, etc., are enormously valued and none of it is based on bounded resources.

I respectfully but also totally disagree. Value of money in particular is not intrinsic, it comes directly from the ability to redirect resource today (buy a home) and the future (be able to retire comfortably).

People made rich by Google will absolutely be able to redirect more resources to themselves in a world of bounded resources.

I think a lot of founders are idealistic about it and refuse to believe that at scale the start up mentality will increase inequalities. That's PG's point acutally, see the last sentence of his essay: it will. But he doesn't care. I do.

Re: How People Get Rich Now

#833

Post by tjs8rj » Tue, Apr 13, 2021, 5:05 AM UTC

benzor wrote: post #324

There's some nuggets of truth in here, but I am disappointed that this article sidesteps what I feel is the most important reason for startup success in 2020: easy and abundant access to cheap capital. - Interest rates are at all time lows, borrowing is cheap - The Fed's balance sheet is at an all-time high. The economy is flush with cash, particularly the investor / VC class - This excess cash creates an (arguably a…

Netflix and Airbnb are profitable, and as far as I can tell the others could be profitable but aren’t because they want to stay huge / have the capital access to do so. When you have unlimited money pouring in, whats the point of profit other than a checkbox for wall street? You can pay everyone their wages, compete fiercely, grow like crazy, and so on. Profit is just inefficiency - we don’t have a use for this money so we just put it in the bank.

I don’t disagree that Uber and Tesla and many of these are on life support currently, but from a game theory perspective, if you have unlimited access to money, why bother being profitable when you can just spend it getting bigger and smarter?

Re: How People Get Rich Now

#834

Post by tjs8rj » Tue, Apr 13, 2021, 5:12 AM UTC

benzor wrote: post #488

heylook wrote: post #458

Earlier quoted context omitted.

> - Large unicorn startups that are perpetual money losers continue to operate only because they are effectively subsidized by regular capital raises. Look no further than all the Silicon Valley darlings such as Uber, Netflix, AirBnb, Tesla, and so on. All of them would cease to exist without continued capital injection from secondary share offerings or VC raises You should look up the financial statements of the com…

Apologies for some hastily chosen examples. I think the point still stands if you consider the following companies: WeWork, Lyft, Snapchat, Pinterest, Dropbox, Slack, Casper, Lime, Peloton, Beyond Meat, Wayfair, Zillow. More generally speaking, take a look at Goldman Sachs' Non-Profitable Technology Index: https://pbs.twimg.com/media/EsRVCiMXIAE7xlA.png

About half the companies you mentioned are cash-flow positive, so their economics work, they just have accounting for depreciation and other lines on their balance sheet. They are default alive companies using accounting practices to avoid taxes, but they have more money coming in than going out

Re: How People Get Rich Now

#835

Post by gip » Tue, Apr 13, 2021, 5:16 AM 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.

It is a fair point if the focus is on billionaires (Bezos, Zuck,...). The proportion of resources they consume is well below their wealth. They may even contribute positively to society through charitable causes.

The real issue is that tech/startup founders and workers who, while less rich, accumulate more wealth at scale compare to the rest of society. And given their number, I'm afraid this will have a real impact by greatly increasing inequality. That would be ok if the other part of the population would also be able to live better. But I do not think it will be the case.

Btw: I am a tech founder.

Re: How People Get Rich Now

#836

Post by three14 » Tue, Apr 13, 2021, 5:20 AM UTC

wanderer2323 wrote: post #704

InitialLastName wrote: post #393

Earlier quoted context omitted.

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.

Normally I wouldn't comment just to say the equivalent of +1, but I hadn't encountered "The Inner Ring" before, and it's great! Thanks for the recommendation.

Re: How People Get Rich Now

#837

Post by gofreddygo » Tue, Apr 13, 2021, 5:23 AM UTC

purple_ferret wrote: post #95

>So it's not 2020 that's the anomaly here, but 1982. The real question is why so few people had gotten rich from starting companies in 1982...a wave of consolidation was sweeping through the American economy Microsoft, Oracle, Apple, Bloomberg, etc were all started in the late 70's/ early 80's. Their founders are the richest people in the world. Seems like the question he's asking, though, is why weren't they obscene…

> 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.

I share your suspicion too. It seems most essays start with a prejudiced narrative, a climax in mind.

Then there are chains of weakly cohesive theories and numbers presented as pseudo-facts, some cherry-picked evidence to stretch the imagination, forever nudging towards the predetermined, targeted conclusion and a veneer of logic holding it together. All supporting the same narrative.

There's the same humble bragging, FOMO peddling, "trust me"isms; rinse and repeat.

Very much like a religious manifesto.

I believe this appeals to the hopes and false beliefs for those who already took the plunge. And at the same time trying to net newer fish.

I regard these essays now as promotional and propaganda material over substantiative, context driven sharing of knowledge from a unique perspective.

Re: How People Get Rich Now

#838

Post by imgabe » Tue, Apr 13, 2021, 5:26 AM 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…

That doesn't have a lot to do with tech companies. First, the ratio compares CEO compensation with stock options to worker wages (without stock options), whereas many of the workers at tech companies are also getting stock options.

Second, pg is talking about the Forbes 100 where the founders of tech companies are represented. The founders didn't get their stock by being granted it as compensation in stock options, they got it by virtue of founding the company. Whatever they have left, they have because that's what they were able to keep and not sell or get diluted.

For example, Bezos' wealth is mostly due to the fact that he owns ~13% of Amazon. He didn't get that as CEO compensation, he got it by founding the company.

Re: How People Get Rich Now

#839

Post by aerosmile » Tue, Apr 13, 2021, 5:30 AM UTC

random314 wrote: post #822

aerosmile wrote: post #719

Earlier quoted context omitted.

I appreciate this argument, except for one detail: > his essay on wealth tax is downright stupid What's everyone's deal with that essay? It literally has no subjective opinion stated anywhere - all it does is calculate how much percent of your wealth you're left with after 60 years of wealth tax [0]. You definitionally cannot push back on anything stated in that article, or otherwise your problem is not with PG's vie…

No billionaire is hiding his cash under a mattress. Investment assets typically compound at 4% above inflation with zero effort by the investor. Pg completely ignores the zero effort compounding of wealth and pretends that the investors wealth will be "reduced" by 45% and that too over 60 years! He forgets to state by how much the zero effort investors assets inflate exponentially in 60 years! If he thought he was ma…

> Clearly, it wasn't obvious to everyone.

Nope, it wasn't. You do realize that the concept you're so stoked on was actually tested in Mr. Piketty's homeland and failed miserably? Oh, the irony!

From NPR [0]:

> Normally progressives like to point to Europe for policy success. Not this time. The experiment with the wealth tax in Europe was a failure in many countries. France's wealth tax contributed to the exodus of an estimated 42,000 millionaires between 2000 and 2012, among other problems. Only last year, French president Emmanuel Macron killed it.

Capital is like water - it flows in the direction of least resistance. That part should be obvious.

[0] https://www.npr.org/sections/money/2019/02/26/698057356/if-a...

Re: How People Get Rich Now

#840

Post by aerosmile » Tue, Apr 13, 2021, 5:36 AM UTC

random314 wrote: post #829

aerosmile wrote: post #719

Earlier quoted context omitted.

I appreciate this argument, except for one detail: > his essay on wealth tax is downright stupid What's everyone's deal with that essay? It literally has no subjective opinion stated anywhere - all it does is calculate how much percent of your wealth you're left with after 60 years of wealth tax [0]. You definitionally cannot push back on anything stated in that article, or otherwise your problem is not with PG's vie…

The book's central thesis is that when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability. Piketty proposes a global system of progressive wealth taxes to help reduce inequality and avoid the vast majority of wealth coming under the control of a tiny…

> 40hr per week income tax rates are very often higher than that.

You do realize that the wealth tax is on top of the income tax, right?

> It only mildly hurts the idle rich.

And therefore there's no issue! Lol. I shared elsewhere that France tried the wealth tax and then killed it after 42k French millionaires left the country. Why would it work in the US when it didn't work in France and 8 other European countries?