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How the .0001% Made Its Money

priceonomics.com

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Re: How the .0001% Made Its Money

#81

Post by vidarh »

kkowalczyk wrote: post #42
hershel wrote: post #36

Earlier quoted context omitted.

>> 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 ?

Quotation needed about mother's involvement. The story that I've read was that IBM had the hardware but didn't think they could make software on time so they went shopping for the OS. First they went to Digital Research who didn't want to do it. Microsoft jumped in and promised to deliver what would become MS-DOS. The rest is history. In no way was Gate's mother instrumental in the process. Citation: http://forwardth…

hershel is not claiming Gates mother was involved. He is playing devils advocate and pointing out that there are reasons why neither IBM's CEO at the time or Gates mother might want it known if she pulled strings: IBM ended up getting the short end of the stick; it would not look good for either one of them (or Bill Gates for that matter).

That does not mean she interfered. It's just a reminder that we should be careful about blindly accepting published accounts of events where the full details are only known by a small number of people all with their own agendas. This of course applies to everything.

Re: How the .0001% Made Its Money

#82

Post by notahacker »

nether wrote: post #45
dustinrodrigues wrote: post #31

Earlier quoted context omitted.

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.

Everyone has unique opportunities. We'll never have perfect equality of opportunity or social connections. Buffett and Gates weren't born into the lower strata of society, but nor were they born into the very upper elite. How many of Gates's classmates at his prep school or at Harvard did nearly as well as he? How often do children of congressmen/women become multibillionaires? We can divy up privilege endlessly (for…

Sure, but the fact that only a tiny minority of highly privileged people have the skill and extraordinary drive to move into the stratosphere doesn't change the fact that people like Gates[1] took advantage of opportunities that don't remotely resemble the opportunities that normal people get. Their billions may be self made in the sense they were unlikely to have been achieved by anyone else in their position, but not in the sense that they were likely to have had comparable success in any position but the one they found themselves in.

[1]and perhaps others like Zuckerberg more so than Buffet, who could probably have somewhat more slowly honed his investment skills and found patrons whilst working the sort of day job people with ordinary middle class backgrounds can easily get.

Re: How the .0001% Made Its Money

#83

Post by speeder »

nether wrote: post #45
dustinrodrigues wrote: post #31

Earlier quoted context omitted.

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.

Everyone has unique opportunities. We'll never have perfect equality of opportunity or social connections. Buffett and Gates weren't born into the lower strata of society, but nor were they born into the very upper elite. How many of Gates's classmates at his prep school or at Harvard did nearly as well as he? How often do children of congressmen/women become multibillionaires? We can divy up privilege endlessly (for…

How EVERYONE has unique opportunities?

What was the unique opportunity of that kid some streets down here that got gunned down when he was 10 years old?

What was the unique opportunity of the record amount of slaves worldwide? (by the way, did you knew the world has more "traditional" slaves now than any other time in history?)

Or... what is my unique opportunity? Being in debt? Not having a single important connection? Going to shitty university? Yes, I am intelligent, I make games, but I see lots of people with less skill than me earning millions, just because they were friends of someone somewhere or their dad was the minister of something in the government. Ultimate example: Eike Batista, that CLEARLY is incompetent, since none of the business he started on his own had profits, yet his father that was the mining minister obviously had a hand in Eike 90% accuracy in finding minerals in areas previously surveyed by the goverment during his father tenure while this information is "secret" and private companies should not know, and the government recently happily handed him billions and kicked out thousands of people from their homes so he could make his lastest failure project.

Re: How the .0001% Made Its Money

#84

Post by adventured »

rafcavallaro wrote: post #78
stormbrew wrote: post #76

Earlier quoted context omitted.

This strikes me as likely to be just a delayed propagation of the increase in upward mobility seen in the post-war years. It seems entirely reasonable for that to take a couple of generations of people building on their parent's wealth accumulation to propagate upwards to the very top. How many of those people's success could you trace back to the GI bill? Gates' father attended university because of it, for example.

Gates's maternal grandfather, a multimillionaire bank president, left him a million dollar trust fund; his mother was on the a United Way board with an IBM exec which is how he got the contract for DOS. The GI Bill had little or nothing to do with Gates's success.

How much of that trust fund - which Gates never asked for and had nothing to do with - did Bill Gates invest into starting Microsoft? All I'm seeing here is Bill Gates bashing with no actual substance.

If Gates didn't have the trust fund, and didn't invest it into Microsoft, then why are you referring to it as somehow indicting his success?

In fact, the IBM exec is not how Microsoft got the contract for DOS. Microsoft was already a very successful software company by the time the deal with IBM was signed, they had millions in profit in 1980 (in 1980 dollars).

They already had the equivalent of $60 to $80 million in sales (2013 dollars) in fiscal 1980, with 40 employees. They did the equivalent of $130 million in sales in 1981 (DOS 1.0 was first released in August 1981). If you understand anything about the software market's history, you understand how already substantial that was at the time for a stand-alone software business. Fact is, Microsoft was already one of the biggest software companies before they ever signed that deal.

IBM was looking to compete with Apple and others in a very important, fast growing market for personal computing. A multi-billion dollar market opportunity at the time (1980 dollars at that).

Your claim is that IBM would have just given that opportunity to any 'kids' with a half-way connection to an IBM exec (that one of the most powerful companies on earth would rest a multi-billion dollar, critical, opportunity with somebody just over one modest connection). It's an absurd position to put it nicely.

Re: How the .0001% Made Its Money

#85

Post by erichocean »

scotty79 wrote: post #56
cylinder wrote: post #44

Earlier quoted context omitted.

What you're saying is "The surest way to get rich is to be rich." Real estate is just a way to invest money you already have. It doesn't generate wealth unless you have access to capital and can put deals together to develop properties and take a chunk. But that might as well put you in the "Finance" category.

You can build real estate gradually, starting with one, two, three apartments paid for with your job and rent your tenants pay. At some point, pretty early you could stop working but if you don't you can buy additional apartments faster. During first generation, I think, you could buy around 10 if you have a good job. Your children will be able buy faster, their grandchildren even faster.

A friend of mine from college had parents that started from scratch and bought and rented ~1200 homes in Indiana during their working years. So, it can be done.

Re: How the .0001% Made Its Money

#86

Post by walid »

programminggeek wrote: post #32

> 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 lik…

The last sentence is the most important point of the article and probably should have been a separate article on its own:

> America’s .0001% is becoming more meritocratic, but the means of a middle class background remain a necessary launching board.

So in other words the most important aspect is to be from the middle class to be successful otherwise your chances are much less. Makes sense on many levels such as chances of personal development due to financial and psychological stability. Poverty has been in the news lately and I read an article on how being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive.

Re: How the .0001% Made Its Money

#87

Post by [deleted] »

programminggeek wrote: post #32

> 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 lik…

[deleted]

Re: How the .0001% Made Its Money

#88

Post by [deleted] »

programminggeek wrote: post #32

> 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 lik…

[deleted]

Re: How the .0001% Made Its Money

#89

Post by walid »

Samuel_Michon wrote: post #52
programminggeek wrote: post #32

> 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 lik…

> The top 0.0001% gained their wealth not by inheriting it How did you come to that conclusion? I looked for that in the figures, but I couldn’t find what percentage came into money from an inheritance. Perhaps it’s placed in the 12% ‘Diversified/Other’ category, but the impression I got from the article was that they tallied how the money was earned in the first place, not where the ones holding the purse got it fro…

Do some math. According to Wikipedia the population of the USA is 316,856,000. The 0.0001% of the population is 31685 after removing partial human beings caused by mathematical division. If the Forbes 400 list is used as a sample space for the rest of the 0.0001% then the numbers seem plausible. Note that I'm just playing "mathematician" and I haven't analyzed the 400 people in the list or did anything deeply scientific.

Re: How the .0001% Made Its Money

#90

Post by pringles885 »

programminggeek wrote: post #32

> 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 lik…

That is absolutely wrong. The middle class got richer.

http://1.bp.blogspot.com/-q83NyGTLock/UekhmnoX4tI/AAAAAAAABc...

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