Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Just Be Rich

keenen.xyz

Post reply on HN
Print view View original

61–70 of 1001 posts

Re: Just Be Rich

#61

Post by routerl »

Barrin92 wrote: post #49

I'm just gonna quote what I think is a very important part from the Graham piece itself >" People who don't look any deeper than the Gini coefficient look back on the world of 1982 as the good old days, because those who got rich then didn't get as rich. But if you dig into how they got rich, the old days don't look so good. In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources,…

Thanks for that comment, I largely agree. Let me try to summarize it:

Old money wants subjects, new money wants worshippers.

Re: Just Be Rich

#62

Post by throwaway127f09 »

Recently I made the oldest startup mistake in the book:

Exercising too many ISOs and incurring the AMT to the tune of $350,000.

I have talked to probably a dozen various professionals - accountants, lawyers, wealth managers, liquidity providers, etc - and they all give the exact same advice:

1. Borrow from family or friends.

2. Leverage existing assets (mortgage, stocks) to pay it.

Every one of them has mentioned those 2 ways are how "most people" in my situation deal with it. Neither are an option for me.

To put it another way: already be rich. Whether personally or by proxy.

Paul Graham also neglected the necessity of the wealthy in creating new wealth because he is one of those gatekeepers. Whether they're the VCs benevolently funding your startup, or the "rich uncle" floating you a 1% loan for a year to pay AMT: it's much easier to become wealthy if you're already wealthy or have access to wealth. You need the wealth to fund your startup. You need the wealth to exercise your ISOs. You need the wealth to cover your AMT obligations. All of this is after you've managed to get the capital for a good education and everything else that goes into joining startups.

Oh and the wealthy get a cut every step of the way. The AMT may be flawed, but the wealthy also tax the rest of us. Not only that, but if we do get rich, since they've done you so many favors, now they have a new wealthy friend in their network to fall back on or raise capital from or obtain liquidity from. So many people who get rich from startups give their money right back to VCs to join funds. It's almost seen as an obligation to help out others. It's not. There's plenty of capital out there. Let the VCs risk their own, not yours. Build affordable housing or bootstrap your next thing; don't effectively give VCs their money back.

And let me be clear: if I do become wealthy from these lottery tickets I'm jumping through hoops to attain: it will be luck. I'm just one of hundreds of people who have built this startup, and if we do exit: the value will be as much more a factor of external market dynamics than intrinsic value created by the company and its labor. It's luck. It's lottery tickets. Don't let anyone fool you otherwise. A good product is one tiny piece of it.

Re: Just Be Rich

#63

Post by nl »

Barrin92 wrote: post #49

I'm just gonna quote what I think is a very important part from the Graham piece itself >" People who don't look any deeper than the Gini coefficient look back on the world of 1982 as the good old days, because those who got rich then didn't get as rich. But if you dig into how they got rich, the old days don't look so good. In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources,…

>> In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources, or doing real estate deals.

> Because at least old money understands the concept of noblesse oblige.

Someone getting rich in 1982 isn't old money(!).

There is nothing except some kind of rose-tinted glasses to indicate that the rich in any era were particularly responsible in their use of wealth.

Re: Just Be Rich

#64

Post by donnythecroc »

Barrin92 wrote: post #49

I'm just gonna quote what I think is a very important part from the Graham piece itself >" People who don't look any deeper than the Gini coefficient look back on the world of 1982 as the good old days, because those who got rich then didn't get as rich. But if you dig into how they got rich, the old days don't look so good. In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources,…

The problem is all down to the basic human need of a home. In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. Now, literally zero chance. Because homes have become an asset class and the rich can outbid regular people so they are pushed out. That's the problem. I couldn't care less how many billionaires there are if regular people can afford a decent home

Re: Just Be Rich

#65

Post by atweiden »

In a hypothetical society which leveled the playing field and started over again from scratch, I’d expect the two most important factors in wealth accumulation to be 1) an aesthetically pleasing facial bone structure and 2) g-factor intelligence. Lacking just one of these is enough to take you out of the game, and lacking both is all but a death sentence for your prospects of becoming a contributing member of society.

Both factors are almost entirely determined by a person’s genetics.

Re: Just Be Rich

#66

Post by bartvk »

Leary wrote: post #54

It was the best of times, it was the worst of times. It was the age of wisdom, it was the age of foolishness. It was the epoch of self-made tech billionaires, it was the epoch of stagnant median wages. It was the season of free knowledge, it was the season of credentialism. It was the spring of Hope, it was the winter of Nope.

I don't get it, what are you trying to say?

Re: Just Be Rich

#67

Post by mulcahey »

d_silin wrote: post #7

A lot of people who are just as smart and motived as Elon Musk or Steve Jobs will never be able to start their own companies and get rich. Because they have family obligations that take priority. Because they live outside high-income countries. Because they have no access to support network, so when they fail, they fall all the way to bottom. Because they may have made a crippling mistake in their pasts that now prev…

But is the portion of people without those restrictions increasing or decreasing? How would you measure it?

Re: Just Be Rich

#68

Post by farrarstan »

Leary wrote: post #54

It was the best of times, it was the worst of times. It was the age of wisdom, it was the age of foolishness. It was the epoch of self-made tech billionaires, it was the epoch of stagnant median wages. It was the season of free knowledge, it was the season of credentialism. It was the spring of Hope, it was the winter of Nope.

Don’t be cute

Re: Just Be Rich

#69

Post by missedthecue »

donnythecroc wrote: post #64
Barrin92 wrote: post #49

I'm just gonna quote what I think is a very important part from the Graham piece itself >" People who don't look any deeper than the Gini coefficient look back on the world of 1982 as the good old days, because those who got rich then didn't get as rich. But if you dig into how they got rich, the old days don't look so good. In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources,…

The problem is all down to the basic human need of a home. In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. Now, literally zero chance. Because homes have become an asset class and the rich can outbid regular people so they are pushed out. That's the problem. I couldn't care less how many billionaires there are if regular people can afford a decent…

Homes in the US today are much larger than they were in the 1970s. About 2x as large! Per square foot, the average home is actually cheaper today than it was then, inflation adjusted, and this isn't even factoring in the modern 2.2% mortgage rates vs the 13% mortgage rates of those days.

Re: Just Be Rich

#70

Post by d_silin »

mulcahey wrote: post #67
d_silin wrote: post #7

A lot of people who are just as smart and motived as Elon Musk or Steve Jobs will never be able to start their own companies and get rich. Because they have family obligations that take priority. Because they live outside high-income countries. Because they have no access to support network, so when they fail, they fall all the way to bottom. Because they may have made a crippling mistake in their pasts that now prev…

But is the portion of people without those restrictions increasing or decreasing? How would you measure it?

In the US at least, it is definitely decreasing. Income inequality is growing, as the original essay noted.
Post reply on HN