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

Billionaires amass more through inheritance than wealth creation, says UBS

ft.com

Post reply on HN
Print view View original

251–260 of 356 posts

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

#251

Post by wing-_-nuts »

1234letshaveatw wrote: post #175
justinsaccount wrote: post #68

Earlier quoted context omitted.

Musk: Rich father, emerald mine money? Arnault: "In 1971, he graduated from the École Polytechnique, France's leading engineering school, and began work for his father's company. Three years later, after he convinced his father to shift the focus of the company to real estate" Gates: "His father was a prominent lawyer" "At age 13, he enrolled in the private Lakeside prep school, where he wrote his first software prog…

largely lol, this is class warfare silliness. Zuck is largely a billionaire because his father offered to pay for college? Have you read up on the so called "emerald mine"?. And how many lawyer's kids do you know that are billionaires?

When you have the casino stake you for $1000 before you even sit down to the table, you can afford to take more risk than if you sit down with $100 of your grocery money. That doesn't guarantee you'll win but it's much easier to take a shot. Does that make more sense?

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

#252

Post by opportune »

mushufasa wrote: post #17

This is the conclusion of Thomas Picketty's 2013 book, "Capital in the 21st Century." Due to the historical averages of the rate of return on capital, he concluded empirically that wealth will continue to concentrate to the point to inheritors, to the extent that individuals become increasingly unable through labor to achieve parity to the inheritors. The book was very provocative in economist circles, but even the c…

There is at least one exception to this, which is that as technology improves, it necessitates the creation of new capital to utilize that technology commercially, and the people involved in creating it (whether as founders or wage workers) stand to capture a lot of the value in delivering it.

Case in point, see how valuable it is these days to be an AI scientist or software engineer. Both are involved in the creation of capital in the form of AI models and software, both are paid a lot and able to adequately catch up in wealth to old money.

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

#253

Post by SXX »

orangepurple wrote: post #8
raincom wrote: 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…

The wealthiest and most secretive are probably the members of the Rothschild family. Today, the family's total net worth is estimated at an eye-watering $400 billion, with some estimates ranging to an astonishing $1 trillion. Ref: https://www.msn.com/en-us/money/personalfinance/the-richest-... Archive: https://archive.is/pMypx -- Anders Aslund, a Swedish economist and author, estimated this year that Putin has somewh…

Dictators don't have wealth, they only have power. As soon as dictator dies all this "wealth" will disappear in a moment in thousands of hands.

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

#254

Post by jhp123 »

kasey_junk wrote: post #69
IAmNotACellist wrote: post #33

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.

A study of British surnames found that those families descended from Norman nobility (e.g. D'Urberville) from the 11th century Domesday Book are wealthier than those with common names (e.g. Darbyfield) today, almost 1000 years later.

https://www.theguardian.com/society/2011/apr/03/social-mobil...

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

#255

Post by AnimalMuppet »

pmorici wrote: post #77
SketchySeaBeast wrote: post #7

Earlier quoted context omitted.

Assuming we're not talking "I have a retirement plan and a house so my net-worth is over a million" type of millionaire, isn't passing oneself off as a multi-millionaire instead of a billionaire a distinction without a difference? I guess I don't run in those circles, but it's still fabulous wealth either way.

If you think about it in terms of what kind of income you would make off interest of ~3% of the principal it’s easier to understand the difference between someone with 5 million vs say 50 and 500 million. It’s the difference between $150k, $1.5 million, and $15 million dollars in yearly income. At 5 million you can decide to not work but you are only really able to afford an upper middle class lifestyle. Depending on…

You think $5 million a year only gets up upper middle class lifestyle? I don't think we share definitions...

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

#256

Post by abeppu »

uoaei wrote: post #135
abeppu wrote: post #59

Earlier quoted context omitted.

I also think it's worth calling out that his follow-up, "Capital and Ideology" in its latter sections includes several suggestions for counteracting the trend to increasing inequality. One of these is basically that _every_ person should have a windfall inheritance when they're in their early adulthood, which would give them opportunities to pursue education, try starting a business, or whatever else. And naturally,…

This technique is referred to as "baby bonds" in policy circles and has a number of advocates, lots of names you'd recognize.

... yes and no. E.g. some baby bonds proposals with backing from recognizable names would:

- have benefits which scale inversely with family income, rather than being 'universal'

- be accessible for specified purposes, like education, buying a home, etc

https://socialequity.duke.edu/portfolio-item/baby-bonds-a-un...

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

#257

Post by godelski »

AnthonyMouse wrote: post #209
abeppu wrote: post #59

Earlier quoted context omitted.

I also think it's worth calling out that his follow-up, "Capital and Ideology" in its latter sections includes several suggestions for counteracting the trend to increasing inequality. One of these is basically that _every_ person should have a windfall inheritance when they're in their early adulthood, which would give them opportunities to pursue education, try starting a business, or whatever else. And naturally,…

> And naturally, this needs to be funded by taxes on the very wealthy. This is the part where the math never works out. If you look at the richest people, they have something like tens to low hundreds of billions of dollars. Which is less than the amount of money the federal government already spends every week. If you taxed the top 100 billionaires at a rate of 100%, it would fund the existing federal government (an…

> This is the part where the math never works out.

I think this is a bit naive because you're considering money to be fixed and treating the system as a zero sum game. In terms of revenue, the US government gets ~55% from individual income tax and 12% from corporate, with a total revenue of 403B/yr. But also turning the "dial" on tax doesn't only affect the revenue. Every "dial" turn turns other "dials" but this doesn't result in a constant value across the system, even in a fixed instance of time. There are dial configurations which dominate other dial configurations but the system is insanely coupled. Neither this argument nor the "just increase taxes" argument is great because they do not capture the nuance necessary for an effective strategy. What that is? I'm not an economist, but I can tell you the system is rather complex and there's good reason we're all talking past one another and that's because we're solving different optimization problems and even when we recognize that we generally don't recognize that we're not agreeing on coefficients of terms nor what variables are at play. I think we need to first recognize the complexity of these issues and most of he time should kinda just shut up unless we're being clear that we're discussing to learn rather than teach.

[0] https://fiscaldata.treasury.gov/americas-finance-guide/gover...

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

#258

Post by kelseyfrog »

rjsw wrote: post #226
kelseyfrog wrote: post #136

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…

There is an argument that Karl Marx provided a guide for the aristocracy to work out the point that inequality would provoke a revolution then back off slightly from it.

Like yes, but also no? The aristocracy no easier to organize than the peasantry. They, through individual self-interest, graze on the commons of wealth and power and are subject to its tragedies just the same.

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

#259

Post by feedforward »

gretch wrote: post #86
Qem wrote: post #53

Earlier quoted context omitted.

We are devolving to the status quo from the nineteen century and before. A couple owners of inherited wealth and huge dispossessed masses.

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…

> Like seriously, would you desire to go back in time to 1890? Okay, have fun if you're not white

The ancestors of the people living in Gaza were much better off than their descendants today, being bombed while the US Navy sits off shore to enable the massacre (coming via bombs made in the USA). Same is true of many in the world. Hunter gatherers in the Amazon were not being massacred by mining companies back then to the extent they are now.

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

#260

Post by rurp »

pmorici wrote: post #87

This doesn’t appear to breakout by country. This isn’t surprising for more socialist countries like in the EU where it is harder to start and build businesses (wealth) in general. I’d be surprised if it was the same in the US where studies have shown that the majority of wealth is not inherited.

Economic class mobility is higher in most of those socialist countries. Maybe new business wealth specifically is more difficult, but I'd rather people have multiple routes to building wealth and more success overall than to solely focus on risky entrepreneurship.
Post reply on HN