Needs a lot more granularity - in particular, the "Finance" bar needs its own bar graph ie. what exactly does making money in Finance entail - working for a retail/commercial bank ? IB ? Prime Brokerage ? Wealth Management ? Equities ? Derivatives ? FX ? Algorithmic Trading ? Mutual funds ? StatArb ? LBO ? ...
How the .0001% Made Its Money
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Re: How the .0001% Made Its Money
#12Personally, the "Finance" growth part of the graph over the years worries me. Creating wealth from thin air and lobbying :|
like putting a fence on some land? like having rights to some nation natural resources (energy on the graph if not clear) all wealth is created out of thin air for the 1%. they just adapt every time the not 1% comes closer to their turf.
I might well be very wrong here, but the main difference is that the other type of wealth-creation process actually creates more wealth (more products for everyone). While finance seems more like wealth-accumulation without the creation process - I'm aware that redistribution of resource in an efficient way is supposedly the part finance does in the wealth creation process, I'm just unconvinced of how much does that help, in relation with the return the finance sector on average get.
Re: How the .0001% Made Its Money
#13I wonder when we will have the first dollar trillionaire. (Rockefeller doesn't count) It's likely that some people will own entire planets in the future.
I think on paper you can get close with derivatives although you'll never be able to liquidate them.
Re: How the .0001% Made Its Money
#14Why doesn't 'VC' fall under 'Finance'?
It could be argued that VC involves the building of technology businesses, rather than simply investing in a hands off manner. It's a fine line, but the famous VCs that come to my mind (Doerr, Andreessen) help mentor and grow a company, and similar financiers (Buffett, Soros) are more industry analysts and money managers. It's a gross simplification, but it may be what they were thinking.
Re: How the .0001% Made Its Money
#15Off the rest of us.
Re: How the .0001% Made Its Money
#16> The popular view of America's upper class is that of an ossified aristocracy. But research from the National Bureau of Economic Research shakes up this view, at least among America's richest individuals.
> The individuals of the Forbes 400 List are the wealthiest people in America - the top .0001%
Am I the only one who sees the contradiction? On one hand, they say things are not that bad. But then they turn around and start talking about the 0.0001%.
In other words, it's not too bad - if you're one of those 1 in 1 million.
Re: How the .0001% Made Its Money
#17> The popular view of America's upper class is that of an ossified aristocracy. But research from the National Bureau of Economic Research shakes up this view, at least among America's richest individuals. > The individuals of the Forbes 400 List are the wealthiest people in America - the top .0001% Am I the only one who sees the contradiction? On one hand, they say things are not that bad. But then they turn around…
They're talking about these people's origins, not their current wealth.
Re: How the .0001% Made Its Money
#18Off the rest of us.
No, no. "Finance"
Re: How the .0001% Made Its Money
#19the good take-a-way is that more people created than inherited
Exactly my opinion. And even though I normally lean towards free market related views when it comes to regulation and government, I think a high inheritance tax would be justified in western countries. With it universities & infrastructure could be funded and possibly enable more people to get a university degree.
My underlying reasoning: Every new generation is a giant possiblity for mankind. Now who do we want to command the most resources? If we had kings, it would be the kings heir, no matter if he is clever or not. Thats bad obviously. If we have capitalism without a high inheritance tax, we might have people like Paris Hilton commanding massive fortunes even though some poor kids might have done a lot better with it if they had a chance of acquiring wealth in the first place.
By having a high inheritance tax one would avoid unbelievable fortunes being handed down to people that are not qualified at all.
Another aspect is obviously that the state needs to motivate people to work better than their peers. If - like in communism - it doesn't matter anymore if I work harder than my peers, so I don't work hard. Assuming that most people work for personal gain, wealth, and so that they children have it better than themselves, you need to leave them their wealth during their lifetime and enable them to hand down some part of their income to their kids, and not give all back to the public. If they would have to give everything to the public, the really bright people might stop working at 35 when they accumulated enough wealth for themselves, knowing their children won't benefit from it anyways.
Good article.
Re: How the .0001% Made Its Money
#20the good take-a-way is that more people created than inherited
I was thinking this too, but also the population has risen and so has the average life-span so I think the amount of new people joining the wealthy class is about the same as it always has been if not even less due to the old wealth never dying off.