Why the “Self-Made” Success Story Is a Myth • Hacker News Board

Re: Why the “Self-Made” Success Story Is a Myth

#151

Post by es7 » Tue, Feb 19, 2019, 6:53 PM UTC

sarchertech wrote: post #35

ralusek wrote: post #24

> So why do millennials act like [financial help from parents] doesn't exist? I would argue the exact opposite. I would argue that with the rise of socialist tendencies among millennials, and the hyper fixation on gender, racial, and economic privilege, there is almost an outright rejection of the existence of merit at all. I think that the position is so extreme, that many millennials believe the output of an indivi…

>Where you start matters, but so do the choices you make. Of course it does...but the single largest predictor of future income is parental income. >I would argue the exact opposite. I would argue that with the rise of socialist tendencies among millennials, and the hyper fixation on gender, racial, and economic privilege, there is almost an outright rejection of the existence of merit at all. I think that the positi…

> the single largest predictor of future income is parental income.

I have seen this claim made many many times, but it isn't clear cut. Quite a bit of research points in other directions also (like intelligence), for example: https://www.sciencedaily.com/releases/2012/03/120329142035.h...

Re: Why the “Self-Made” Success Story Is a Myth

#152

Post by astrodust » Tue, Feb 19, 2019, 7:02 PM UTC

weberc2 wrote: post #118

astrodust wrote: post #98

Earlier quoted context omitted.

Yeah, like fall back into poverty. People that are wildly successful often hit some very narrow window. You can be persistent and try and try again which increases your odds, but it's still a crap-shoot.

You have to be lucky perhaps to be wildly successful, but you'd have to be quite unlucky to work hard and take smart risks and fail to be successful at all. Similarly, you have to be very, very lucky to rise from poverty to wealth without working hard or taking smart risks. In particular, seeing and executing on a narrow-window opportunity that others miss is itself an accomplishment. The idea that self-made success…

You can do everything right, work very hard, and still fail. You can do everything wrong, be a complete idiot, and still succeed.

There's ways you can increase your luck, or be more observant as to opportunities, but it's self-deluding if you don't think luck plays a huge factor in success.

Re: Why the “Self-Made” Success Story Is a Myth

#153

Post by projektfu » Tue, Feb 19, 2019, 7:03 PM UTC

fireflash38 wrote: post #112

honkycat wrote: post #73

I like that we keep talking about privilege, no matter how much it irks the hacker news elite. I have a previous comment about this[0], so I will not go into too much detail. Nobody thinks they are rich or privileged. Now, the Hendersons down the street? THOSE PEOPLE are rich! I feel that people underestimate the huge effect of having a safety net under them. It is the difference between going to the amazing state sc…

Every time I see privilege come up, people start denying it, or excusing it. Saying things like "I still had to work hard for this!" It's a tricky subject to talk about, as the article references, specifically because it's hard to differentiate between what you got from privilege and what you got from hard work. I find analogies best to talk about it. Your goal is to reach the top floor of a building. Some people sta…

There's very little that's more impertinent than telling an American he didn't earn what he has. Can't speak for other cultures.

Re: Why the “Self-Made” Success Story Is a Myth

#154

Post by donaldknuth123 » Tue, Feb 19, 2019, 7:03 PM UTC

ben509 wrote: post #57

Isamu wrote: post #2

>She told me, “I was curious, but I don't know how a single person in America who doesn't have family money could buy anything, I really don’t, if they're not working in finance or they're not a doctor. ” Easy, there are vast areas of America where housing is more affordable. I certainly got zero cash from family when I bought a home. My family put money into giving me food and shelter growing up though. This is kind…

Responding to your quote: Working in finance, I can report that we do not have magic money machines. You could narrow "finance" to mean professional traders who do extensive market research and take large risks, sure, they make a lot of money, but they also get wiped out periodically. They're not very different from other entrepreneurs who make a big investment into their area of expertise and takes big risks, often…

Hedge Funds literally print money. 2/20 is guaranteed money, 2% on all funds managed so you win regardless of the market and 20% of any gains when you beat the market. Easy.

Re: Why the “Self-Made” Success Story Is a Myth

#155

Post by simonsarris » Tue, Feb 19, 2019, 7:05 PM UTC

honkycat wrote: post #108

darawk wrote: post #26

This is such nonsense. First of all, there are absolutely people who come from dirt poverty and become wildly successful. Second of all, plenty of people receive lots of help from their parents and amount to precisely nothing. IMO it's fair to refer to your success as "self made" if you exceed the median success level of your class peer group by a substantial margin. If you immigrate from Africa with nothing, and you…

> First of all, there are absolutely people who come from dirty poverty and become wildly successful. Second of all, plenty of people receive lots of help from their parents and amount to precisely nothing. There are way more people who are born wealthy and continue being wealthy. There are way more people who go from poor to poor. Social mobility is piss poor right now in the US. If "having a nice family and a wonde…

[some person] had a TON of opportunity and privilege funneled to him from his parents.

What percentage of those persons became billionaires? Is it less than 0.1%?

(What percentage of them die broke? I bet greater than 1%)

Re: Why the “Self-Made” Success Story Is a Myth

#156

Post by cableshaft » Tue, Feb 19, 2019, 7:13 PM UTC

heydonovan wrote: post #137

cableshaft wrote: post #111

Earlier quoted context omitted.

Between the cost of daycare, health care/insurance, pet care, car payments and maintenance, student loan payments, and then a mortgage (even a cheap mortgage) on top of that, not to mention saving something for retirement, forget the 10x your salary by the time you retire or whatever, and once every 2-3 years go on a vacation at least to the next state over, I do sometimes wonder how households can make ends meet on…

As someone who has come from poverty, it still blows my mind that folks who make more than $70k struggle at all. A few of the things you mentioned are strictly luxuries. College, pets, new cars, vacations are all put on the back burner until it's financially reasonable to do so. I've met many folks making more than $100k who are in more debt than someone making $40k. Just ignorant of finances.

Making more money means more people will be willing to give you the rope to hang yourself with. People aren't as willing to lend money to people who don't have a means to pay it back, but someone can be doing well, take out a decent amount of debt ("buy" a car, "buy" a house, take out loans for education, etc), suffer a health or career setback, long periods of unemployment, and it starts a debt that spirals out of control.

I went through a period of near poverty myself (seriously considered declaring bankruptcy a couple of times), and it seemed like the first year or two of any new job I had was just digging myself out of the hole from last time (only to get laid off right as I was starting to get back to a 'normal' amount of debt, and thus be forced to dig myself back deep into debt while I made the next job work). It can be a vicious cycle. I'm finally free of it, but if I was forced not to work for six months or so due to a health issue I could very easily be back in the midst of it again.

Re: Why the “Self-Made” Success Story Is a Myth

#157

Post by foldr » Tue, Feb 19, 2019, 7:13 PM UTC

darawk wrote: post #103

foldr wrote: post #83

Earlier quoted context omitted.

>IMO it's fair to refer to your success as "self made" if you exceed the median success level of your class peer group by a substantial margin. Even if success were 100% down to luck, there'd still be people who exceeded the median success level of their class peer group by a substantial margin. It's begging the question to simply assert that a majority of these people can fairly claim to be "self made".

Ok, then, calculate the t-statistic of your income level with respect to your starting cohort then, if you want to be rigorous about it. I think my point stands.

That does nothing to show that it's not down to luck. By your logic, anyone who wins the lottery can claim to be "self made" (since so few other ticket holders had anywhere near the same degree of success).

Re: Why the “Self-Made” Success Story Is a Myth

#158

Post by jonbarker » Tue, Feb 19, 2019, 7:15 PM UTC

briandear wrote: post #89

jonbarker wrote: post #45

So the author's parents encouraged leverage by subsidizing a down payment on real estate, an asset class which underperforms index funds. The story doesn't seem to end well; it is probably self correcting in the long run.

Real estate underperforms index funds? Perhaps in capital appreciation, but in terms of cash on cash returns, nothing beats real estate. If you can turn a $50k downpayment into a $250k property netting $300 per month after mortgage/expenses, plus get capital appreciation on top of that — you’ll make far more money on that $50k than the same money invested in an index fund. Statements such as “indexes out-perform real…

The annual net from the house you live in I guess is arguably the benefit of living in it. Hard to compare that with the dividends produced by an index. The dividends produced by the index can be used to pay rent, for example.

Re: Why the “Self-Made” Success Story Is a Myth

#159

Post by jonbarker » Tue, Feb 19, 2019, 7:18 PM UTC

briandear wrote: post #89

jonbarker wrote: post #45

So the author's parents encouraged leverage by subsidizing a down payment on real estate, an asset class which underperforms index funds. The story doesn't seem to end well; it is probably self correcting in the long run.

Real estate underperforms index funds? Perhaps in capital appreciation, but in terms of cash on cash returns, nothing beats real estate. If you can turn a $50k downpayment into a $250k property netting $300 per month after mortgage/expenses, plus get capital appreciation on top of that — you’ll make far more money on that $50k than the same money invested in an index fund. Statements such as “indexes out-perform real…

Also, I was speaking from a leverage standpoint. If someone is worth less than the value of a house, and finances most of it, then they have effectively put their personal balance sheet book value into negative territory, effectively making an ROE calculation very ugly in the near term. The scenario described above is just the effect of leverage, not the fact that said leverage is applied to real estate.

Re: Why the “Self-Made” Success Story Is a Myth

#160

Post by ijpoijpoihpiuoh » Tue, Feb 19, 2019, 7:20 PM UTC

ForHackernews wrote: post #64

ijpoijpoihpiuoh wrote: post #51

Earlier quoted context omitted.

Where do the people you know live? That might inform the probability of being able to buy a home with or without parental help. I just picked a metro: Baton Rouge. Median home price there is around $160k, although naturally there is plenty of inventory available for less than $100k. Some of it's in pretty dismal shape, but, looking at Zillow, there are non-zero houses in this category that look livable. The median HH…

I grew up in the midwest. Most of the people I know are in Iowa, some in Illinois and Missouri. Saving up a down-payment is a significant obstacle, I think. I know that in some areas, you can get a rural development loan that requires a much smaller downpayment, but my friends don't want to live in the boonies and it would lead to a pretty miserable commute for them.

A hearty mmmeeehhhh to the idea that the median household cannot save 10%. Proof by existence: 50% of families live on less than the median. Probably at least 35% live on 10% or more less than the median. At that point it's a matter of priorities.

Not saying life is cushy in this situation by any means. And of course there will be many families that cannot save enough. But it is doable if someone wants to make it a priority.