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Ask HN: If I am so smart, why I am not rich?

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Re: Ask HN: If I am so smart, why I am not rich?

#21

Post by PaulHoule »

satvikpendem wrote: post #11
PaulHoule wrote: post #2

Forbes says there are about 2800 billionaires in the world, and there are like 8 billion people, so your odds are about 1-in-3 million of making it into that class. And it doesn't just take smarts, it takes being in the right place at the right time. [1] https://www.forbes.com/billionaires/?form=MG0AV3

Rich doesn't have to mean billionaire. Now look at the number of millionaires in the US, ~22 million or 8.5% of the population. https://en.wikipedia.org/wiki/List_of_countries_by_number_of...

Some people are going to argue that a millionaire isn't really "rich". It's not that hard to become a millionaire if you make a decent income, sock a lot away, and invest in stocks in the 1930-2024 time frame. [1] You'd be pretty old when you make that milestone though.

I think the OP wants to be rich when he's young.

[1] https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer...

Re: Ask HN: If I am so smart, why I am not rich?

#22

Post by PaulHoule »

cratermoon wrote: post #15
qup wrote: post #8

Earlier quoted context omitted.

Weird. I never ran the math. Becoming a billionaire is actually more achievable than I would have predicted, by a lot.

Alternate reading: being a billionaire is less impressive than it's hyped to be, if it's a pure numbers game.

It's not just a numbers game. Bill Gates was stupendously smart, driven and competitive. He and Paul Allen also got the idea that the microcomputer industry was going to need systems software before he could get a microcomputer to develop it on, so he developed it with an emulator on a PDP-10. It was "flip switches on the front panel" or "ship with Microsoft BASIC" which let Microsoft claim to be "the first microcomputer software"; they got a few lucky breaks such as getting a contract with IBM for the systems software for the PC which could have easily gone to a competitors like Digital Research.

Bernard Arnault is another interesting case study, his talents were quite different, started with a wealthy family, had luck to multiply his family wealth with real estate and get out [2] had a lot of luck rolling luxury brands together, and also benefited from the growth of China, as "keeping up with the Chens" more than made up for the decline of materialism in the west.

[1] https://en.wikipedia.org/wiki/Bernard_Arnault

[2] it is easy to turn a small fortune into a huge one in real estate using leverage and then lose it all

Re: Ask HN: If I am so smart, why I am not rich?

#23

Post by PaulHoule »

NietzscheanNull wrote: post #14
qup wrote: post #8

Earlier quoted context omitted.

Weird. I never ran the math. Becoming a billionaire is actually more achievable than I would have predicted, by a lot.

The probability in GP's comment assumes that everyone has an equal chance of attaining billionaire status, and that the percentage of billionaires in the world remains constant. Given heritability of wealth and access to better education and healthcare, wealthy children have much lower barriers to success. The second assumption may not hold either, as the current overall economic trends seem to favor increasing conce…

I feel like the odds are so long that a few orders of magnitude either way don't really change the argument that luck is a bigger factory than anything else.

Developing vs developing world is an interesting question. There are a lot of people in the developing world who outright stole $1B or more, and the process of development frequently makes billionaires. Chinese people I know who came to the US and had average results often regret coming because they know people back home who got really lucky and hit it big.

Re: Ask HN: If I am so smart, why I am not rich?

#24

Post by scarface_74 »

satvikpendem wrote: post #11
PaulHoule wrote: post #2

Forbes says there are about 2800 billionaires in the world, and there are like 8 billion people, so your odds are about 1-in-3 million of making it into that class. And it doesn't just take smarts, it takes being in the right place at the right time. [1] https://www.forbes.com/billionaires/?form=MG0AV3

Rich doesn't have to mean billionaire. Now look at the number of millionaires in the US, ~22 million or 8.5% of the population. https://en.wikipedia.org/wiki/List_of_countries_by_number_of...

“there were 56 million people worldwide whose assets exceeded one million US dollars”

That doesn’t take starting your own business or even working for one of the top paying companies. If you bought a house ten years ago in an area with rapid price appreciation - congratulations you are now close to a million easily.

Now if you work for any of the tech companies that pay top of market for a few years and live below your means, reaching 1 million is even easier.

Re: Ask HN: If I am so smart, why I am not rich?

#25

Post by scarface_74 »

PaulHoule wrote: post #21
satvikpendem wrote: post #11

Earlier quoted context omitted.

Rich doesn't have to mean billionaire. Now look at the number of millionaires in the US, ~22 million or 8.5% of the population. https://en.wikipedia.org/wiki/List_of_countries_by_number_of...

Some people are going to argue that a millionaire isn't really "rich". It's not that hard to become a millionaire if you make a decent income, sock a lot away, and invest in stocks in the 1930-2024 time frame. [1] You'd be pretty old when you make that milestone though. I think the OP wants to be rich when he's young. [1] https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer...

Statistically, which do you think is a better way to get to $1 million? Working for BigTech or equivalent or starting your own business?

Re: Ask HN: If I am so smart, why I am not rich?

#26

Post by satvikpendem »

scarface_74 wrote: post #24
satvikpendem wrote: post #11

Earlier quoted context omitted.

Rich doesn't have to mean billionaire. Now look at the number of millionaires in the US, ~22 million or 8.5% of the population. https://en.wikipedia.org/wiki/List_of_countries_by_number_of...

“there were 56 million people worldwide whose assets exceeded one million US dollars” That doesn’t take starting your own business or even working for one of the top paying companies. If you bought a house ten years ago in an area with rapid price appreciation - congratulations you are now close to a million easily. Now if you work for any of the tech companies that pay top of market for a few years and live below yo…

Indeed, that's my point. It is statistically unlikely to do well enough in business to get to 1 MM compared to working for a living.

Re: Ask HN: If I am so smart, why I am not rich?

#27

Post by HardikVala »

I've been your position before and although I can't say I'm a successful entrepreneur, I can share lessons that helped me escape "analysis paralysis":

1. Fear. This is was a huge inhibitor of action. I was afraid of picking the wrong problem and then spending months-years having nothing to show for it.

2. To overcome the fear, I decided that instead of anchoring on the painpoint, I'll anchor on something else: The user. I chose ML engineers as the market I want to serve (its a terrible market, I advise you pick something else). It's hard to fathom a niche of users out there that don't have some pain they're willing to relieve by paying somebody else. You don't have to anchor on a user. You can anchor on something else, like a mission (eg. democratizing access to startup investing), or an industry (eg. semiconductor manufacturing). When you commit to a center point, now you have the freedom to iterate on ideas freely, knowing that even if an idea doesn't work out, you'll learn useful information you can use in the next iteration.

Does this guarantee that you'll company eventually grow into a unicorn? No, not really. You can end up picking a tiny niche, but in practice, most founders are able to expand the niche or find ways of expanding their market by combining niches.

This is more relevant to software businesses but hopefully some of it is still useful for other types of businesses.

Re: Ask HN: If I am so smart, why I am not rich?

#28

Post by aristofun »

scarface_74 wrote: post #17
aristofun wrote: post #12

> everyone told me that If you know you're smart enough to start a decent business - don't listen to anyone. Key secret here is that nobody knows what is the right way to business success (not your friends, not warren buffet, not elon musk, nobody). And also "everyone" is more often than not are dumb and wrong. (few examples: support for hitler, popularity of gaming chairs etc.) Next thing is that getting make millio…

So were all the people who failed (and most do), not “smart”? It doesn’t matter how much persistence or how far you are willing to run if you are running in the wrong direction. It’s an important skill to know when to quit

This is why I mentioned smart being just one of many variables.

Also not changing direction when it is clearly wrong - is a good sign of not being smart. It is not persistence, it’s stubbornness.

Re: Ask HN: If I am so smart, why I am not rich?

#29

Post by scarface_74 »

HardikVala wrote: post #27

I've been your position before and although I can't say I'm a successful entrepreneur, I can share lessons that helped me escape "analysis paralysis": 1. Fear. This is was a huge inhibitor of action. I was afraid of picking the wrong problem and then spending months-years having nothing to show for it. 2. To overcome the fear, I decided that instead of anchoring on the painpoint, I'll anchor on something else: The us…

> *but in practice, most founders are able to expand the niche or find ways of expanding their market by combining niches.+

“Most” founders fail miserably or toil in obscurity making peanuts until they give up.

Re: Ask HN: If I am so smart, why I am not rich?

#30

Post by keiferski »

Well, I’m certainly not rich, so take this with a grain of salt, but:

I think a lot of very smart people have a definition of intelligence that is orthogonal to money-making. This is probably because, for all intents and purposes, it is. Some of the smartest people I’ve known were basically incompetent at “street” skills, and vice versa. This is especially common in fields like philosophy (which my background is in.) The level of raw intellect is often off the charts, and yet translating that into pragmatic dollars and cents seems almost impossible to them.

And so a lesson I’ve gradually learned is that entrepreneurship is not really about being smart, and being good at entrepreneurship does not indicate that someone has a high level of intelligence. It means they have certain skills that the market values, full stop. That can be technical skills, sales skills, the ability to notice and capitalize on opportunities, and so on. It doesn’t mean they are dumb, of course, but American culture has a way of lionizing business leaders and ascribing wisdom to them that they usually don’t have.

This is all long-winded way of saying that you have to decouple intelligence and success in your mind, because in the real world they are only sometimes related, unfortunately.

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