How the .0001% Made Its Money • Hacker News Board

Re: How the .0001% Made Its Money

#31

Post by dustinrodrigues » Mon, Oct 14, 2013, 7:52 PM UTC

adventured wrote: post #30

firstOrder wrote: post #23

The first paragraph says: > 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. Not much has shaken up this view. Half of the list inherited $400 million or more upon turning 18. Even the other half of the list are from among a small percentage of America's upper midd…

Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it. The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination. We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of…

It's not that he inherited his wealth, it's that he grew up in a privileged environment that gave him opportunities most other people didn't have.

Re: How the .0001% Made Its Money

#32

Post by programminggeek » Mon, Oct 14, 2013, 7:53 PM UTC

> The economic story of the past decades is supposed to be the death of the American Dream. Income inequality has risen, the wealth of the middle class stagnated, and stories of the poor working their way to prosperity became just stories.

I think the article doesn't really do a good job to change that view. The inequality has risen and the wealth of the middle class has stagnated. This is absolutely true.

Things like raises are no longer the norm, bonuses in many jobs have disappeared, prices and debt have risen much faster than the rise in income. At the same time, wealthy people continue to grow their wealth.

The fact the top 0.0001% gained their wealth not by inheriting it doesn't change what is happening to the poor, middle class, etc. as a result.

Re: How the .0001% Made Its Money

#33

Post by Q6T46nT668w6i3m » Mon, Oct 14, 2013, 7:55 PM UTC

adventured wrote: post #30

firstOrder wrote: post #23

The first paragraph says: > 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. Not much has shaken up this view. Half of the list inherited $400 million or more upon turning 18. Even the other half of the list are from among a small percentage of America's upper midd…

Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it. The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination. We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of…

Sure, but Gates frequently admits he won the so-called “ovarian lottery.”

Re: How the .0001% Made Its Money

#34

Post by scotty79 » Mon, Oct 14, 2013, 7:57 PM UTC

Surest way is real estate. Just buy real estate and rent it. Repeat over 3 or 4 generations. Congratulations. You created a rich family. All other ways involve luck.

Re: How the .0001% Made Its Money

#35

Post by icebraining » Mon, Oct 14, 2013, 8:02 PM UTC

werner34 wrote: post #19

Shivetya wrote: post #9

the 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 c…

Though I'm attracted to the idea, inheritance tax was always a concept that I see (probably due to ignorance) as extremely vulnerable to "an extra layer of indirection". You see, I'm not actually transferring the company to my son, I'm transferring it to a trust in Switzerland that is controlled by my daughter-in-law.

Re: How the .0001% Made Its Money

#36

Post by hershel » Mon, Oct 14, 2013, 8:05 PM UTC

adventured wrote: post #30

firstOrder wrote: post #23

The first paragraph says: > 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. Not much has shaken up this view. Half of the list inherited $400 million or more upon turning 18. Even the other half of the list are from among a small percentage of America's upper midd…

Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it. The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination. We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of…

>> His mother didn't make the deal with IBM (in fact Ballmer was arguably most instrumental in the nuanced legal structure that gave Microsoft its position)

Just for the sake of discussion: if his mother and her relation to the IBM top executive had a critical part in IBM's biggest business mistake ever - doesn't it make sense that they won't want to share those details ?

Re: How the .0001% Made Its Money

#37

Post by recuter » Mon, Oct 14, 2013, 8:09 PM UTC

adventured wrote: post #30

firstOrder wrote: post #23

The first paragraph says: > 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. Not much has shaken up this view. Half of the list inherited $400 million or more upon turning 18. Even the other half of the list are from among a small percentage of America's upper midd…

Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it. The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination. We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of…

Buffet made his initial nut by raising a sort of "Friends & Family" round for a mini-hedge-fund type thing. You can read about his wealthy Aunts and extended family in Snowball.

He was doing this on the side while working at his daddys Buffett-Falk & Co as an investment salesman. He did well and after stalking Graham was able to get a gig in NYC for a few years before returning to running "mini-hedge-fund" type partnerships in his hometown.

So being a son of a congressman surely helped in raising many many millions of dollars from the Nebraska elite. I would even argue its almost a necessary but insufficient condition for making his initial fortune - he got dealt a great hand but he also played it very very well.

Re: How the .0001% Made Its Money

#38

Post by yodsanklai » Mon, Oct 14, 2013, 8:10 PM UTC

"America’s .0001% is becoming more meritocratic"

They make it sounds it should be comforting somehow. But I don't think it makes any difference. Does it matter whether they won the lottery, inherited, or "earned" their money? the fact is that very few people own much of the wealth.

Re: How the .0001% Made Its Money

#39

Post by adventured » Mon, Oct 14, 2013, 8:13 PM UTC

dustinrodrigues wrote: post #31

adventured wrote: post #30

Earlier quoted context omitted.

Bill Gates shouldn't be listed as someone who inherited his wealth: he did not inherit it. The $100 billion he'll give away was of his own creation, spurred from effort of his own mind, from a company born of his own fingers and imagination. We're having this conversation thanks to the Internet, probably via relatively inexpensive tools/gadgets. Which means we've all inherited an extraordinary privilege - courtesy of…

It's not that he inherited his wealth, it's that he grew up in a privileged environment that gave him opportunities most other people didn't have.

Are you suggesting his privilege wrote his software for him? Much less had the vision to start a software company in the 1970s - which his parents thought was a bad idea. They did not like the idea of him dropping out, he did it anyway.

Paul Allen didn't come from any kind of privilege. So is the theory that he should be robbed of his amazing success and effort also, by association with Gates' association with his father and his father's association with Gates' grandfather? He did go to the same school as Gates after all.

Re: How the .0001% Made Its Money

#40

Post by alexmayyasi » Mon, Oct 14, 2013, 8:13 PM UTC

dxbydt wrote: post #11

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 ? ...

The original paper breaks down finance between 3-4 categories. (If you google the title you can find free pdfs.)

We combined them to make it more clear for the casual reader.

~priceonomicist