321–330 of 356 posts
Visit Bogleheads.org, where many wealthy people hang out and discuss finances.
You'll find that for a great many wealthy people, the secret is simply living below your means, saving and investing for decades, and keeping costs low. That's it. Not lucky. Not necessarily smarter. Just disciplined, and having the basic knowledge of the simple steps described.
Rich people got "lucky" but they don't define what luck is to begin with. To quote Naval, there are 4 kinds of luck. 1. Blind luck - Where I just got lucky because something completely out of my control happened 2. Luck from hustling - luck that comes through persistence, hard work, hustle, motion. Which is when you’re running around creating lots of opportunities, you’re generating a lot of energy, you’re doing a lo…
2-4 are great examples of survivorship bias. For every success story with those traits are thousands of failures. If Bill Gates had been born and raised in Ruanda, you wouldn't know his name today. Same IQ, same hustler. But no parents with connections, no upbringing devoid of war and violence. It's just like in sports. Usain Bolt is not the fastest man alive. He is the fastest professional runner. Within a sample se…
// Still on the backs of “labor”.
Years ago, a friend of the family said "You're so smart. Everyone thought you would be a millionaire by age thirty. What happened?" I pointed at my kids and said "They happened. And they take all my time." I was a full-time wife and mom. This is not a career known to lead to great wealth. So, for starters, not all interests or career paths have equal potential to lead to wealth. Intelligence in no way guarantees that…
This is well-said. James Hughes advocates families account their balance sheets on human, intellectual, financial, and social capital. For very-long-term (50-100+ years and >3 generations), the human, social, and intellectual components are arguably more important than the financial one, and it is essential to mitigate liabilities like divorce etc.
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IQ tests are also a bad example because they have a normal distribution by design. It's like saying grades fall into a normal distribution when you're graded on a normal distribution curve
It's a good example because most human traits are normally distributed. There aren't any 1000IQ humans, just like there are no 18ft tall humans, or ones that could run a marathon in under an hour.
Comparing IQ as a measurement to measuring height would require we create a non linear unit of measurement so that humans fit into a normal distribution of "Height Quotient" where most humans are 100 units tall. Then every few years we adjust these units so that most humans are always 100 units tall
100 IQ fifty years ago wasn't the same as 100 IQ today
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Don't confuse smart for the individual with smart for the society. Of course a good social safety net would be great. We don't have it. Nothing in my short life tells me this political system or culture can produce it. I am not putting my bets on a change in culture or government. I see what's happening to people who counted on Social Security/Medicare and discovered too late that it wasn't enough.
Other places have managed to produce it, it seems kind of bizarre to rule out the possibility given its manifest existence elsewhere.
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I’ve been surprised at how uncomfortable people are with capitalism in various parts of Europe Talk about my fintech venture or trading and young people are visible apprehensive Very distinct from the general awe and congratulations and “wow but you're so young!” that comes with completely misunderstanding what personal and liquid monetary wealth is Outside of Monaco and Zug I just started telling people I was a stud…
Agree. And that raise of socialism is also annoying. But some of US citizens are communists, not just socialists, so it's not just Europe :)
I really appreciate the business climate of the US, the tax and accounting rules are so complex that even communists likely wouldn't achieve much if they gained representation. they'll focus on "income tax" and "wealth tax" because its all they know, and their state planning would never gain consensus.
Mark to Market elections on securities transactions at arbitrary prices causing Net Operating Losses forever no matter what the income tax rate is? 60/40 rule on futures trades? Its unlikely they would ever notice.
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Billionaire is a bad metric. These are outliers of outliers. Obviously everyone can't be a billionaire. That's like asking why everyone isn't an Olympic gold medalist. Of course the path to a billionaire is going to start with abnormal conditions. It's also going to be completely abnormal along the way, too. It's an abnormal outcome. Why would you expect anything different?
Because if you're not born rich your chances of dying rich are astronomically low. We pretend social mobility exists when in reality it does not, or at least it's extremely rare (even in the US, now more than ever).
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>Unless you were the first to market in a completely new field, it's very possible that some of a firm's worth comes from gaining market share from existing players. It is possible, but you can simply check that the size of the US and world economy has grown tremendously, so that argument doesn't explain the growth. >So what? Make co-op financing better, There are plenty of ESOP companies. If they consistently did we…
> It is possible, but you can simply check that the size of the US and world economy has grown tremendously, so that argument doesn't explain the growth. Can it keep growing forever? If not, how much longer can it keep growing? Should we alter our economic system to account for the change in economic environment?
I mean, I guess the strict answer to the first question is "no", but the answer to the second question is - it can keep growing for so long that it really doesn't matter.
There's no real reason to think that we've reached the end of innovation - we keep innovating, we keep finding ways to squeeze more stuff out of less material and labor - the economy keeps growing.
There are people that argue that innovation has slowed down - but I don't think everyone agrees, and even if they do, the mechanism is not well understood. And most importantly, even if it slowed down, it doesn't mean that innovation stopped.
> Should we alter our economic system to account for the change in economic environment?
Well it depends on what the change is and what our goals are. Most people who want the "economic system" changed have, I think, different goals than the ones who want it kept the same (e.g. what is more important - growth or equality? There are real, honest debates one can have about this, but if people land on different sides of this, obviously they may want different changes enacted).
But what did the reviewers say about the paper? ( http://arxiv.org/abs/1802.07068 ) They used a normal distribution for "Talent", but that's false. There is plenty of evidence that , like everything in life , it's power-law distributed https://www.forbes.com/sites/joshbersin/2014/02/19/the-myth-... http://blogs.cornell.edu/info2040/2018/11/16/power-laws-reve... And the assumtions of the model are rather childish: eac…
Both of your links show a power-law distributions for the returns on talent , not the underlying distribution of raw talent in the population. We already know this. Wealth begets wealth- a successful book author is more likely to sell another successful book than a new author. Likewise with artist paintings and salesmen. But actual talent, like human height or average running speed, is probably normally distributed.
Talent would be normally distributed if it was e.g. the sum of your partial talents, as a result of Central limit. There are different kinds of talent though, and gifted people are talented in one thing, but may even suck badly in others. If there are 5 talents, a person barely above average, with 0.6 in everything has total talent 3 and Mozart who has 1.0 only in music has total talent 1. That's not how talent works though: extremely gifted people are almost unstoppable. It would take extremely adverse circumstances for Mozart of Maria Callas or Michelangelo to not be successful. So, i don't think Talent works at all like a bell curve. It's futile to make parallels with IQ (which IS a sum of variable representing partial skills).
That's why i think those studies find those power laws (and frankly, there are not many ways to measure talent directly). Also: Note that they didn't measure the wealth of the artist, but the price of their works since the time they lived , as a long-term testament to their talent.
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2-4 are great examples of survivorship bias. For every success story with those traits are thousands of failures. If Bill Gates had been born and raised in Ruanda, you wouldn't know his name today. Same IQ, same hustler. But no parents with connections, no upbringing devoid of war and violence. It's just like in sports. Usain Bolt is not the fastest man alive. He is the fastest professional runner. Within a sample se…
> If Bill Gates had been born and raised in Ruanda, you wouldn't know his name today. Same IQ, same hustler. But no parents with connections, no upbringing devoid of war and violence. Flip that around. There are thousands, if not millions of other kids who grew up with wealthy, connected parents. Why aren't they all billionaires if that's all it takes?