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How the .0001% Made Its Money

priceonomics.com

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Re: How the .0001% Made Its Money

#131

Post by ljf »

bedhead wrote: post #116
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 widening wealth inequality as it relates to inheritance can be explained mostly by one simple concept, something Buffett himself call the most powerful force in the universe: compounding. Wise people with money, given enough time, will rocket to become insanely wealthy. Compounding does nothing for the middle class who generally spend most of their income, and it works the opposite way for the poor who are debtor…

"wise people with money" or did you mean "people who are wise with their money" - America seems to have a default setting of rich people = good, poor = stupid.

Re: How the .0001% Made Its Money

#133

Post by im3w1l »

walid wrote: post #114
humanrebar wrote: post #106

Earlier quoted context omitted.

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'…

I don't think you can control for genetics, at least not directly. There is no intelligence genetic marker as far as I know which only leaves testing the IQ/intelligence of the whole family tree as the only option. However getting access to ancestors might not be feasible. On the other hand having a large pool of people is good enough since the distribution of intelligence is usually uniform and not restricted to thi…

Compare IQ of lottery winners vs lottery losers. They should have same genetic IQ, but different wealth.

Re: How the .0001% Made Its Money

#134

Post by gcb0 »

NhanH wrote: post #12
gcb1 wrote: post #7

Earlier quoted context omitted.

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…

finance create more distributed wealth than real state, that is for sure.

And finance when done right is to generate business. That tech company wouldn't exist if it weren't for a loan, that weren't be if there was no money for the bank to invest...

What you are trying to describe the closed network banks use to scam everyone bypassing regulation and what not. such as dark liquidity and such. or microtrading.

anyway, illegal actions exist on all markets. not just finance. as mentioned above, finance is just the market the big criminals (0.0001%) are chosing at this time. Or do you think they dealt land, oil, etc under all the regulations as well in the past?

Re: How the .0001% Made Its Money

#135

Post by leoedin »

ljf wrote: post #131
bedhead wrote: post #116

Earlier quoted context omitted.

The widening wealth inequality as it relates to inheritance can be explained mostly by one simple concept, something Buffett himself call the most powerful force in the universe: compounding. Wise people with money, given enough time, will rocket to become insanely wealthy. Compounding does nothing for the middle class who generally spend most of their income, and it works the opposite way for the poor who are debtor…

"wise people with money" or did you mean "people who are wise with their money" - America seems to have a default setting of rich people = good, poor = stupid.

I don't think the commentor implied that people without money couldn't be wise, but just that people who are both wise and posess money will be able to make it grow.

Re: How the .0001% Made Its Money

#136

Post by [deleted] »

ljf wrote: post #131
bedhead wrote: post #116

Earlier quoted context omitted.

The widening wealth inequality as it relates to inheritance can be explained mostly by one simple concept, something Buffett himself call the most powerful force in the universe: compounding. Wise people with money, given enough time, will rocket to become insanely wealthy. Compounding does nothing for the middle class who generally spend most of their income, and it works the opposite way for the poor who are debtor…

"wise people with money" or did you mean "people who are wise with their money" - America seems to have a default setting of rich people = good, poor = stupid.

[deleted]

Re: How the .0001% Made Its Money

#137

Post by lmm »

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?

Would he have dropped out of university to work on Microsoft full-time if he hadn't had the trust fund to fall back on?

Re: How the .0001% Made Its Money

#138

Post by jmngomes »

nitrogen wrote: post #128
humanrebar wrote: post #106

Earlier quoted context omitted.

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'…

I do know that I felt less intelligent when I was more worried about money, as though some fixed cognitive reserve were depleted by worrying about uncertain near-term survival, leaving fewer intellectual resources for long-term planning and development.

Same here. I think the same phenomenon is observable in middle class and below: a person's main concern becomes surviving, leaving less/little time for introspection and learning.

Re: How the .0001% Made Its Money

#139

Post by sumedh »

recuter wrote: post #37
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…

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…

The Snowball I read said that Buffett had a difficult time raising money because no one took him seriously. Once word started spreading around that "the kid" knows what he is doing that is when people started approaching Buffett.

Buffett was running his own business even when he was a kid and was earning more than his teachers.

Re: How the .0001% Made Its Money

#140

Post by gadders »

walid wrote: post #112
gadders wrote: post #108

Earlier quoted context omitted.

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

You're not proving cause and effect here. IQ and earning power are correlated but the relation has been proven to run both ways. Low IQ may or may not lead to low income but low income has been shown to lead to low IQ scoring.

Only a massive study would show cause and effect.

Barring occupations like professional sports, though, common sense would tend to suggest that that a higher IQ would tend to lead to a higher salary in the majority of cases.

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