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

Re: How the .0001% Made Its Money

#101

Post by nitrogen » Mon, Oct 14, 2013, 10:56 PM UTC

humanrebar wrote: post #95

walid wrote: post #86

Earlier quoted context omitted.

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 chan…

> being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. While that's poetic, I'm very skeptical that you could even prove that empirically. It's much more likely (because it is empirically demonstrable) that IQ is more strongly impacted by genetics (IQ of the parents), prenatal care (especially with respect to smoking and binge drinking), and childhood (mal)nutrition. I'm n…

> > being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive.

> While that's poetic, I'm very skeptical that you could even prove that empirically.

A study which claims to show exactly this: https://news.ycombinator.com/item?id=6298326

Anecdotally, I consider this plausible based on my own experiences during lean months as a startup founder.

Re: How the .0001% Made Its Money

#102

Post by codexon » Mon, Oct 14, 2013, 10:56 PM UTC

adventured wrote: post #84

rafcavallaro wrote: post #78

Earlier quoted context omitted.

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. Microsof…

The right question is if Gates would have started Microsoft if he didn't have a trust fund safety net if MS failed.

Re: How the .0001% Made Its Money

#103

Post by r00fus » Mon, Oct 14, 2013, 11:04 PM UTC

adventured wrote: post #84

rafcavallaro wrote: post #78

Earlier quoted context omitted.

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. Microsof…

> 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.

This is specious reasoning. The safety net provided by a trust fund (even if you didn't ask for it), is quite significant and allows you to take significant risks.

Let's take the analogy of FU money. The whole point of having it is that you can take risks or breaks in the future (saying F-U to any/all VCs/Investors/bosses without impact to your financial security). You don't need to invest any/all of it, since you can generate more, but if you choose paths that don't generate that wealth, you haven't squandered your financial comfort.

Re: How the .0001% Made Its Money

#104

Post by werner34 » Mon, Oct 14, 2013, 11:15 PM UTC

elp1stolero wrote: post #63

werner34 wrote: post #19

Earlier quoted context omitted.

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…

I certainly feel your sentiment, werner38 (Re: Paris Hilton - right?), but I disagree with your conclusions. And I agree with you that it is not necessarily a positive outcome that a king's heir would assume the wealth of the king. However, I think the trade-off of using law to essentially plunder property (again, assuming the property was acquired through no act of injustice), undermines the purpose of law - to defe…

Well, I believe that people should be left alone as often as possible and should only be interfered with when urgently needed.

But I also believe that commanding wealth comes with responsibilities, and if some people are not willing to act responsible, they might need someone(the public) to remember them and take some of that wealth to build schools, universities or the like.

I am not saying that Mr. Hiltons wealth should be seized and randomly given to people on the streets. I am certainly not of the opinion that todays western governments are super effective either. But if I have the choice of having Paris spend that massive fortune or the government, I would opt for the government I am afraid.

If Larry Ellison decides to build himself a big pink bouncy castle the size of Oklahoma with his Oracle money he is free to do so and thats fine by me. He earned that money, he is free to do with it what he likes, I don't have to like his choices, but I won't interfere(not that I could anyways).

If someone earns his money by being born and decides to spend it on the big bouncy castle I am not fine with it. If most of what he would have inherited was taken by the public and he still manages to amass a fortune that is enough to build himself that bouncy castle, he is free to do so, and I won't interfere. He made the money,its his choice, not mine.

Re: How the .0001% Made Its Money

#105

Post by Samuel_Michon » Mon, Oct 14, 2013, 11:32 PM UTC

alnis wrote: post #67

Samuel_Michon wrote: post #52

Earlier quoted context omitted.

> 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…

From the article: > Kaplan and Rauh find that America’s wealthiest are no longer a collection of Rockefellers and Carnegies. During the period the researchers investigated, the number of individuals on the Forbes 400 who were the first in their family to run a business rose from 40% to 69%. Sixty percent of individuals on the list grew up wealthy in 1982 while only 32% did in 2011. > Although being born into wealth i…

Thanks for your input, but the comment I was responding to was:

> The top 0.0001% gained their wealth not by inheriting it

Your contribution does not cover that.

Re: How the .0001% Made Its Money

#106

Post by humanrebar » Mon, Oct 14, 2013, 11:32 PM UTC

nitrogen wrote: post #101

humanrebar wrote: post #95

Earlier quoted context omitted.

> being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. While that's poetic, I'm very skeptical that you could even prove that empirically. It's much more likely (because it is empirically demonstrable) that IQ is more strongly impacted by genetics (IQ of the parents), prenatal care (especially with respect to smoking and binge drinking), and childhood (mal)nutrition. I'm n…

> > being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. > While that's poetic, I'm very skeptical that you could even prove that empirically. A study which claims to show exactly this: https://news.ycombinator.com/item?id=6298326 Anecdotally, I consider this plausible based on my own experiences during lean months as a startup founder.

I read that article. While those studies are interesting, they are definitely limited and far from conclusive. For example, they didn't control for genetics as far as I can tell. It's entirely plausible that "rich" people are rich in the first place because, statistically speaking, innate intelligence lets them make better financial decisions even under duress.

While it's possible and interesting, I certainly wouldn't make policy recommendations or support charities based on that kind of evidence.

In the meantime, while independent parties come up with something more conclusive, let's try to affect known vectors for stunted childhood development like parental substance abuse, prenatal care, and malnourishment. And, again, these are real problems we should be doing something about anyway.

Re: How the .0001% Made Its Money

#107

Post by quinnchr » Mon, Oct 14, 2013, 11:42 PM UTC

humanrebar wrote: post #106

nitrogen wrote: post #101

Earlier quoted context omitted.

> > being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. > While that's poetic, I'm very skeptical that you could even prove that empirically. A study which claims to show exactly this: https://news.ycombinator.com/item?id=6298326 Anecdotally, I consider this plausible based on my own experiences during lean months as a startup founder.

I read that article. While those studies are interesting, they are definitely limited and far from conclusive. For example, they didn't control for genetics as far as I can tell. It's entirely plausible that "rich" people are rich in the first place because, statistically speaking, innate intelligence lets them make better financial decisions even under duress. While it's possible and interesting, I certainly wouldn'…

Are you seriously asserting poverty is not a known vector for stunted childhood development?

Do you realize there are millions of impoverished people in this country who can't afford to eat healthily? You are aware of the effect nutrition has on childhood development right? Do you realize there exist impoverished parts of this country which simply don't have access to fresh healthy food?

There's literally hundreds of ways poverty stunts childhood development...

Re: How the .0001% Made Its Money

#108

Post by gadders » Mon, Oct 14, 2013, 11:58 PM UTC

walid wrote: post #86

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 chan…

Do you not think that a lower IQ would tend you to have lower earning power?

Re: How the .0001% Made Its Money

#109

Post by nickbauman » Tue, Oct 15, 2013, 12:32 AM UTC

humanrebar wrote: post #95

walid wrote: post #86

Earlier quoted context omitted.

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 chan…

> being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. While that's poetic, I'm very skeptical that you could even prove that empirically. It's much more likely (because it is empirically demonstrable) that IQ is more strongly impacted by genetics (IQ of the parents), prenatal care (especially with respect to smoking and binge drinking), and childhood (mal)nutrition. I'm n…

The strongest indicator of a child's ACT score is the INCOME of the parents. Increasingly IQ tests are being revealed as being culturally-based, too. And the things that you list; things like impulse control, general responsibility, mental health, are strongly influenced by the environment that the subject must contend with.

Eugenics always seem so seductive, but, like phrenology, much is revealed about the outlook and tendencies of the practitioner rather than the subject.

Re: How the .0001% Made Its Money

#110

Post by _delirium » Tue, Oct 15, 2013, 12:47 AM UTC

adventured wrote: post #43

recuter wrote: post #37

Earlier quoted context omitted.

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 partn…

Connections aren't results. Getting an introduction won't help you one iota if you can't deliver. The only thing that ultimately matters in investing is results. Buffett is the absolute worst example you could use to claim privilege results. Unless your theory is that his father's friends made all those investment decisions for him. Just about the hardest thing to do in business would be to generate a $300 billion co…

How is it "robbing" Buffett of his success to accurately describe the conditions of his success? When he writes about his own biography, it's along similar lines; he doesn't try to portray himself as a poor kid who pulled himself up by his bootstraps with nobody's help.