How People Get Rich Now • Hacker News Board

Re: How People Get Rich Now

#461

Post by jdonaldson » Mon, Apr 12, 2021, 6:45 PM UTC

cryptoz wrote: post #160

WhompingWindows wrote: post #120

Earlier quoted context omitted.

Paul Graham's articles always shoot immediately up to the top of HN, but I agree with you, they're generally cursory and pithy thoughts which don't convince my skeptical mind. I don't know, can someone explain why his work is so popular? Think of all the amazing writers across our civilization whose work is linkable, and we're worshipping these decent but not amazing blog posts?

PG's recent articles have changed from what they used to be. Recently (last few years) there is a dramatic change towards defending riches, logical fallacies to explain why being rich is okay, a lot of focus on wealth and how to get it and why it's okay. A lot less technically interesting than he used to post. I used to send Startup=Growth to everyone I knew. I think people are used to high-quality content from PG an…

PG's articles are like a modern day Siddhartha. He illustrates the glories of growth and change initially, but by the end he illustrates the glories of stability and security.

Re: How People Get Rich Now

#462

Post by ablekh » Mon, Apr 12, 2021, 6:45 PM UTC

> It's easier now to start and grow a company than it has ever been.

Arguing that, due to being easier now to start and grow a company, more wealth gets created, is "conveniently" seeing only one [the positive] side of the coin. Because, considering the alarmingly low ratio of success in the startup world, growth in the overall number of startups also means growth of startup failures (which often means destruction of wealth, however small, instead of its creation). But, for obvious reasons, VCs don't like to talk much - at least, publicly - about it ... And this essay is just one more example of that trend.

Re: How People Get Rich Now

#463

Post by Ericson2314 » Mon, Apr 12, 2021, 6:45 PM UTC

closeparen wrote: post #210

cryptoz wrote: post #160

Earlier quoted context omitted.

PG's recent articles have changed from what they used to be. Recently (last few years) there is a dramatic change towards defending riches, logical fallacies to explain why being rich is okay, a lot of focus on wealth and how to get it and why it's okay. A lot less technically interesting than he used to post. I used to send Startup=Growth to everyone I knew. I think people are used to high-quality content from PG an…

The political messaging has also changed from “people in poverty have specific material needs that we need money to fix” (war on poverty) to “actually, people having or making different amounts of money is inherently wrong” (war on inequality). The war on poverty can be waged with a modest tax on the PGs of the world. The war on inequality is different. Venture capital always seeks to create wealth that will flow to…

If the utility of money is a suitably concave function, those two become much more similar.

https://www.jasonhickel.org/blog/2021/3/28/extreme-poverty-i... makes a good case that poverty and inequality are quite related historically, too.

Re: How People Get Rich Now

#464

Post by qzw » Mon, Apr 12, 2021, 6:46 PM UTC

I'm rather disappointed PG would think that the Forbes wealth list could support any kind of conclusion whatsoever. One of the biggest reasons that the top of the list is filled with tech billionaires is that their wealth is relatively transparent, being mostly in the form of stock holdings in publicly traded companies and often directly disclosed. This makes it much easier for Forbes to estimate their net worth with some degree of confidence. Older wealth is often more opaque and diffuse, hidden behind various complex financial structures or stored in assets that are difficult to value or rarely change hands. Whether Forbes is aware of how much wealth there is and in what form, depends largely on the desire of the possessor to make it known. Some would want to disclose (or even inflate) their wealth for ego or branding reasons. Others would likely prefer to remain off the Forbes list altogether. So the Forbes list is a poor starting point even for a discussion soley about the wealthiest people. To draw any kind of inference from it to the broader economy is just downright ridiculous.

Re: How People Get Rich Now

#465

Post by alpha_squared » Mon, Apr 12, 2021, 6:46 PM UTC

missedthecue wrote: post #452

peter422 wrote: post #446

Earlier quoted context omitted.

Why can’t employee compensation also come from diluting Wall Street? Why do they vast majority of those benefits go to top executives?

Performance and incentive alignment. John Doe stacking pallets at the Coca Cola factory really won't produce much better top or bottom line results for the business if you offer him a stock bonus. His forklift only drives so fast, and he plays a very minute part in the direction of the business. The CEO on the other hand can have a huge impact, and it's why shareholders choose and vote on certain incentives and bonus…

> John Doe stacking pallets at the Coca Cola factory really won't produce much better top or bottom line results for the business if you offer him a stock bonus. His forklift only drives so fast.

A counter-perspective would be that John Doe becomes incentivized to improve efficiency and innovate in the process. People are not machines or primitive animals. Humans are capable of creative problem-solving.

Note: stock options are not stocks. You're not given a share in the company, you're given the opportunity to invest in the company. You have to put money in to _potentially_ get money back.

Re: How People Get Rich Now

#466

Post by mattknox » Mon, Apr 12, 2021, 6:46 PM UTC

iur12 wrote: post #195

cryptoz wrote: post #160

Earlier quoted context omitted.

PG's recent articles have changed from what they used to be. Recently (last few years) there is a dramatic change towards defending riches, logical fallacies to explain why being rich is okay, a lot of focus on wealth and how to get it and why it's okay. A lot less technically interesting than he used to post. I used to send Startup=Growth to everyone I knew. I think people are used to high-quality content from PG an…

This isn’t a surprise. The religion that formed here hanging off his every word subscribed to it to get rich, just like he started YC to get rich. Now he’s happily rich, barely even looks in the mirror at these adherents that he left behind, and is writing for his new friends who are also rich. It was always pointless snake oil but the Sand Hill Greed here made everyone overlook that because maybe, just maybe, the ke…

He was rich enough not to need more money before starting YC-the acquisition price for viaweb was $49M, and it roughly ~10x'd between then and the peak in late 1999. (cites: https://www.cnet.com/news/yahoo-buys-viaweb-for-49-million/ https://venturebeat.com/2008/10/08/as-other-tech-stocks-rall... ). I don't know how long he spent there or what fraction of the company he still held, but I'd assume that he'd have stayed long enough to get to his personal Fuck You Money.

More generally, I know many many people (maybe literally tons by weight?) who continue to work long after they don't need to, usually because they're just deeply interested in the domain. I've seen this up close with my father, who continues to farm at 70, and with some founders who keep founding despite having more money than they will ever need. So when someone in that situation says they work on a thing because it is interesting to them, I generally believe them.

Re: How People Get Rich Now

#467

Post by FabHK » Mon, Apr 12, 2021, 6:47 PM UTC

whimsicalism wrote: post #313

timkam wrote: post #167

Earlier quoted context omitted.

I agree. To me, the post reads a bit like this: "Back then, we did not have as much inequality, but the super-rich did not deserve their wealth. Now, we have more inequality, but the super-rich [like PG himself] really deserve it, because they are innovators." The post does not cover the arguably more important questions like "Are the working and middle classes better off?", "Was there less innovation back then or we…

Moreover, people seem to continuously forget the fact that half of all wealth in the United States is inherited by the top 5% wealthiest households, not 'earned' via value creation. In general, I tend to agree with Rawls that this notion of 'deserving' is irrelevant to the question of how we ought to distribute goods/welfare in society.

Yes, not only good old Rawls, but many contemporary writers make arguments about the limits of meritocracy. Some books I can recommend:

Robert H. Frank: Success and Luck: Good Fortune and the Myth of Meritocracy

https://press.princeton.edu/books/hardcover/9780691167404/su...

https://blogs.lse.ac.uk/lsereviewofbooks/2016/06/28/book-rev...

Michael Sandel: The Tyranny of Merit: What’s Become of the Common Good?

https://www.nytimes.com/2020/09/15/books/review/the-tyranny-...

Re: How People Get Rich Now

#468

Post by BlargMcLarg » Mon, Apr 12, 2021, 6:47 PM UTC

bradlys wrote: post #263

jkubicek wrote: post #200

Earlier quoted context omitted.

It is an insane amount of money even in the Bay Area. It's more than enough to support a large family living a very comfortable lifestyle while also saving significantly for retirement. I'm not sure what the grandparent poster is on about.

Everyone argues about this but for most people in tech - $400k/yr does not give you a "very comfortable" lifestyle. You cannot afford a $2m home. A $2m home isn't even that comfortable in the peninsula. (Varies on location but it'll probably be under 2000sqft, still 3-4 bedroom, 4000-8000sqft lot, 2-car garage if you're fortunate, will likely require $200k+ in renovation/repairs on move in, nothing lavish) Good luck…

>for most people in tech

The majority of people in tech do not work in Silicon Valley or even US tech hubs for that part. Friendly reminder entire continents across either side of the US coast by with less than 15% of that number and would live extremely comfortable lives with just the 100k that often gets tossed around here.

Re: How People Get Rich Now

#469

Post by triceratops » Mon, Apr 12, 2021, 6:48 PM UTC

monoideism wrote: post #230

tyre wrote: post #130

Earlier quoted context omitted.

Add to that that tech companies concentrate wealth line never before. Airbnb takes a cut of transactions not only around the US but across the world. Not everyone works in the Bay Area, but how many of the founders, early employees, and VCs do? The ones who really make massive wealth? Not 100%, but most. Same with Stripe, the same with Facebook, Google, etc. we’re pulling tremendous wealth into a small area, with tec…

> But this level of wealth concentration and inequality is detrimental to the fabric of a society. We’re not better off, we’re not more innovative, we’re not healthier or more cohesive or happier when this happens. I agree 100%, but you're ignoring the other factor that is detrimental to society: social factors. Notably, the divorce rate and single-parent rate among poor and working class Americans of all races has s…

Finances are generally a big cause of divorces. Have you considered that upper-class couples have low divorce rates because they have money? Rather than they are upper-class because they don't get divorced.

Don't get me wrong, divorce is a massive destroyer of wealth. But happy couples don't generally get divorced. And financial stability is a big contributor to happiness.

Re: How People Get Rich Now

#470

Post by lotsofpulp » Mon, Apr 12, 2021, 6:48 PM UTC

thegrimmest wrote: post #440

lotsofpulp wrote: post #424

Earlier quoted context omitted.

Yes, the easiest way to see it is in the lack of income security and wage stagnation for the vast majority. You have to hustle, your employer may not be around for your working lifespan, or they might be obviated by cheaper labor from overseas and/or technology and automation. Edit: Another example is health insurance is tied to your employer in the US. It costs anywhere from $400 per child per month to $1k per month…

Doesn't the article point out that this is pretty much the normal condition of life, with a brief interlude from the 50s into the 80s? Yes, life is unpredictable, bad things happen for no reason. This is a moral condition we all have to accustom ourselves to. I'd speculate that the pain our society seems to be going through now represents a correction towards the normal condition, and that we should adjust our expect…

The gist of your original comment was that life has been getting better for everyone. But if you also claim people need to adjust their expectations downward, then some things are not getting better for everyone.

I know that people from the 50s to the 80s didn't have internet, healthcare technology, medicines, smartphones, etc like today. But obviously there is something to be said for the stability or utility of knowing that your children will most likely have a better future than you did, and the demise of this fact (or belief) is causing friction in society.