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Billionaires amass more through inheritance than wealth creation, says UBS

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Re: Billionaires amass more through inheritance than wealth creation, says UBS

#181
post #86

Earlier quoted context omitted.

This is true if you view the world from a zero-sum perspective. If the rich are winning, then the poor must be losing. But I would argue the world is not zero-sum. Modern life for middle class or poor class people is a lot better than the vast majority of history (the 2 notable exceptions are post WWII USA and post Cold War USA, when America was punched through as an undisputed global superpower). We are a looooonnng…

> But I would argue the world is not zero-sum. Modern life for middle class or poor class people is a lot better than the vast majority of history Zero sum is not a binary. For things where we are able to increase output using technological progress to the point where supply sufficiently meets demand, sure, it doesn't feel zero sum. Nobody is arguing that we need to fix that -- the challenge is actually preserving th…

> Housing and land in particular are really tough.

Housing and land are not "tough". There's plenty of dirt cheap land even in highly developed countries; it just happens to be outside the most popular locations. But if we want housing to become both cheap and livable we must invest in those "unpopular" places, even as we also try to build more housing in the more high-demand locations. There's just no avoiding that.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#182

Earlier quoted context omitted.

People whine about "wealth distribution" day and night, but at the end of the day what alternative is there to combat the (continually increasing) concentration of wealth at the top? At some point there will have to be redistribution, in some form, and the sooner society comes around to that the better off we'll all be.

The alternative of last resort is always violent revolution[1]. Wealth redistribution is the olive branch. There seems to be an open question among the wealthy and political class of how far inequality can go given the modern police state and effectiveness of technology in accomplishing the goal of maintaining or exacerbating the current political economy. 1. See historical populist grivences against aristocracy that…

Good luck with that in USA.

I'd rather die some billionaires minimum wage security squad protecting his gold plated yacht than let some violent freeloaders take my shit and install some cuban-tier communist hell-hole where there's no incentive to produce even basic grain stocks.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#183
post #25
post #6

There are more secret billionaires, who don't appear on the billionaires list. I know of two such billionaires. One is super, super secretive, who passes off as a multi millionaire. There are special trusts that billionaires make use of. Treat a trust like a corporation, with its own independent existence. Such trusts can be set up for multiple generations: these trusts (corporations) are run by professionals, while…

I liked the trust funds where you only get the monthly paycheck when you have a job. No matter just a 35 hours work week otherwise no pay. E.g. only get like $8-10k/mo when you work.

I like this model too, except it should function (maybe pro-rated?) at lower number of hours/week--not everyone should work "full-time"--and also include volunteering. Maybe also other unpaid labor like child-rearing and open source software development.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#184

Yet on the billionaire leaderboard the top-10 are: Musk, Arnault, Bezos, Ellison, Buffet, Gates, Zuckerberg, Balmer, Page, Bin. Not one of them through inheritance. Sure, you have the waltons a little lower on the list. As a person who started in the bottom decile of wealth I want to hate inheritance at least as much as the next person. But at first glance it sure doesn't look good for these "researchers".

I think though that most of the people on that list had their net worths decrease last year. To my understanding this article is pointing to a pretty short-term trend, though maybe an important one.

people have fewer children today, that concentrates any inheritance, including among people of modest means. depending on the statistics analyzed, people of modest net worth with one child could contribute to an overall upward skew.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#185
post #65
post #2

Since this is paywalled, here's the start of the article: New members of the global super-rich gained more of their assets through inheritance than through wealth creation this year — the first time that this has been recorded by Swiss bank UBS in its nine years of surveying global billionaires.

A whole 9 years? Maybe this has more to do with the end of ZIRP monetary scheme than the already established fact that we live in an oligarchy.

That possibility is explicitly made in the article

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#186

Earlier quoted context omitted.

The alternative of last resort is always violent revolution[1]. Wealth redistribution is the olive branch. There seems to be an open question among the wealthy and political class of how far inequality can go given the modern police state and effectiveness of technology in accomplishing the goal of maintaining or exacerbating the current political economy. 1. See historical populist grivences against aristocracy that…

Overwhelmingly, violent revolution doesn't actually bring about the goals of the revolution. It just installs a new power structure with variations on all the old problems. Sometimes much worse. So it isn't really a "last resort". It's more of a "well you didn't compromise, so now our choice is to burn the whole system down"

Wholeheartedly agree. For the peasants, revolutionary goals are rarely fulfilled. For the previous elite though, they rarely find continuity of power post revolution.

The sans-culottes didn't quite accomplish their goals(at least immediately), but Louis XVI among other elites didn't survive.

Toussaint Louverture et al didn't accomplish their goals, but the French no longer controlled Haiti.

Even Lenin and Trosky didn't accomplish their goals, but the Romanov didn't leave the Ipatiev House alive.

Like many conflicts, one side doesn't have to win for one to lose.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#187

Earlier quoted context omitted.

The alternative of last resort is always violent revolution[1]. Wealth redistribution is the olive branch. There seems to be an open question among the wealthy and political class of how far inequality can go given the modern police state and effectiveness of technology in accomplishing the goal of maintaining or exacerbating the current political economy. 1. See historical populist grivences against aristocracy that…

Good luck with that in USA. I'd rather die some billionaires minimum wage security squad protecting his gold plated yacht than let some violent freeloaders take my shit and install some cuban-tier communist hell-hole where there's no incentive to produce even basic grain stocks.

If you are minimum wage security guard, nobody is taking your shit.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#188

And yet 70% of generational wealth is gone by the 2nd generation.

This is a stat that is never sourced and is mostly cited by the wealth planning industry that have an ulterior motive for making people believe it. I’d love to see a rigorous backing of this stat.

That's because it's just not true in any meaningful sense. What happens is that the wealth is often transformed and split between separating couples, but it mostly stays in the same class.

The idea that generational wealth is lost is a great story though. It's part of the "American Dream". Anyone can do it. The "self-made" man. Rags to riches. If you spend any real time with the wealthy people—almost anywhere in the US—you know this isn't true. It happens, sometimes, sure. What you DO see is plenty of "millionaires" who saved 50% of their income for 45 years and get to retire at 65 with >2 million in the bank. There are tons of these people. This is what the wealth planning industry creates and it's what skews the statistics about these sorts of things. Poor for a lifetime for a taste of wealth at the end.

But man, the idea that, "70% of generational wealth is gone by the 2nd generation" is literally a joke. I can imagine it as the punchline to a joke where management is trying to convince to labor to work harder.

It's so easy to be wealthy when you grow up with money. And it's easy to stay there as long as you don't fall into a serious addiction of some sort. And even when you lose a bit it's easy to get back because the connections you have basically guarantee you income. Being born into wealth is damn near a safety net that lasts a lifetime. If you can earn the respect of a just 5 or 6 people in wealthy families you never really have to worry about money. And truth is, once you know 2 or 3 you end up with a dozen contacts. Your next venture is a phone call away. There is always a job for "talented people". That's the reality that people really don't talk about because why would they. It just pisses anyone off who isn't at that level.

When I see people talk about how most generational wealth is lost by the second generation what I have to assume they are talking about is someone who inherited $2 million or so when their parents died. Not because their parents were wealthy, but because they spent their entire life relatively poor (despite having some assets), saving for a day that never came, and then died at 70. So their kids grew up relatively poor, and suddenly at 40 they have a few million that they quickly piss away. That's a scenario that happens all the time that people are familiar with. That's technically generational wealth. But when I think about generational wealth I think about families that own land, businesses, assets. Families that own city blocks.

Truth is, if you show up at the elite country club for the first time at 65 no one is going to consider you wealthy, especially if you don't have the stories. The real wealthy people have been there since they were 15. Wealthy people have a lifetime of wealthy people stories that they like to tell each other. Real generational wealth is its own society.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#189
post #31

Earlier quoted context omitted.

I think with the "distinction without a difference" bit they meant that if you look like you have $2k instead of looking like you have $1m, what is the difference in your life than just having $2k? The answer to that is: you have $1m of peace of mind to live your comfortable lifestyle of someone with $2k. Now living the lifestyle of someone woth $2k might not be particularly desirable to most, but living the life of…

Yes, exactly. If you live like you're making minimum wage as a millionaire that's obvious, but if you're living like a multi-millionaire instead of a billionaire how could you even tell?

Depends on how many multis you're talking about. A billionaire who wants them can have a large yacht, private jet, multiple large homes, staff for everything. Someone with $10 million will be living an upper-middle-class lifestyle, but without needing to work. Maybe a second house or a boat or plane they pilot themselves, but no full-time staff. $100 million could start having the billionaire stuff but at a smaller scale.

Vast difference in political influence, too.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#190
post #67

Earlier quoted context omitted.

Yes, there is a psychological difference. Super wealthy have hard time trusting people including their family, friends, etc. Some of them even suffer from paranoia. Just a couple of bad experiences are enough for them to become like that. For ordinary mortals like us, we just write off our bad experiences with other people as natural, not some extraordinary. Being lied to, being backstabbed, lying, backstabbing, coll…

But you said: "One is super, super secretive, who passes off as a multi millionaire." To say they "pass themselves off as" means there is a visible difference in either what they own or how they act. What does that look like? Are you saying they pretend to trust? How is that apparent? I can't figure out what the obvious visible difference would be. If a millionaire passes themselves off as someone with much less weal…

In some actions, yes, he wants to appear as successful multi millionaires. In some other actions, he sounds like a billionaire. That's why he is seen as a weird multi-millionaire. He is not cheap either, but doesn't trust anyone: he feeds you information, to see whether you share that with other people; he says, he trusts you, later he can send a private detective to see what you are up to.

I think, the root cause is this: just as FAANG engineers's social circle is fellow people working from FAANG, it is the same for wealthy, super, uber wealthy. You don't see a FAANG guy living in a mobile home surrounded by people who work in the blue collar folks.

Some folks don't want to involve in many social activities of the class they belong to, but want to be part of the lower classes. That's what I mean by 'pass themselves off as'.

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