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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#471

Post by missedthecue »

joshuamorton wrote: post #453
missedthecue wrote: post #433

Earlier quoted context omitted.

I hate this comparison. Stock based compensation didn't exist in 1965. It's an oranges to apples comparison. CEO salaries today are still about 20-1, depending on the business. For instance: - Doug McMillon of Walmart makes $1.2 million in salary. - James Quincy of Coca-Cola makes $1.5 million in salary. - JPMorgan's CEO Jamie Dimon has a $1.5 million salary. - Sundar Pichai of Google makes $2 million in salary. You…

> They come from diluting Wall Street. Yes, until the company offers a stock buyback (which these companies collectively spent more than 50 billion on in 2020)

ok. But then they're using cash from the business to get the share count back down to prior levels, and it's still a net loss for Icahn. There are only 100 percents. If the management team gets more ownership through dilution, it means Carl Icahn owns less.

Re: How People Get Rich Now

#472

Post by taurath »

bawolff wrote: post #423
taurath wrote: post #269

So in the 1960s the rest of the world was rebuilding their bombed out cities. The US had no competition to speak of and provided “mature” at the time manufacturing to the rest of the world. There’s a lot of cracks and hand waving in this article, it’s a very roundabout way to say that income inequality isn’t a problem. It is a problem, and PG is so far removed from it he’s just thinking about how to justify keeping h…

I don't think he said that. This seems like an article trying to explain increased wealth inequality. At most he's saying its a neccesary consequence of innovation, and he would prefer a world with innovation than without. That's very different from saying its not a problem.

Tying innovation/technology to wealth inequality at all is a false narrative. There’s literally the industrial revolution that “counts” towards this “pattern” and that is it. It’s comparing apples to 1970s automobiles.

Re: How People Get Rich Now

#473

Post by Aunche »

peter422 wrote: post #446
missedthecue wrote: post #433

Earlier quoted context omitted.

I hate this comparison. Stock based compensation didn't exist in 1965. It's an oranges to apples comparison. CEO salaries today are still about 20-1, depending on the business. For instance: - Doug McMillon of Walmart makes $1.2 million in salary. - James Quincy of Coca-Cola makes $1.5 million in salary. - JPMorgan's CEO Jamie Dimon has a $1.5 million salary. - Sundar Pichai of Google makes $2 million in salary. You…

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

A lot of employee compensation does come from diluting Wall Street. Until recently, Tesla was operating at a loss. During that time the workers were paid by diluting equity.

Re: How People Get Rich Now

#474

Post by jodrellblank »

giantg2 wrote: post #50

I just wish I was financially independent. When I buy a Powerball ticket (maybe every other year), I don't hope for the jackpot. I just hope for the million dollar prize. Edit: why downvote? This is how I feel. This is my only opportunity to make "real money".

> Edit: why downvote?

Every thread about money comes with some "if you don't want it, give it to me!", "I wish I had money", "If I had money I'd pay for my wife's college debt!!!", "I dream of a million dollars", just like every internet thread that hints of a woman posting gets some "no woman has ever spoken to me before, can I see your tits?" drooling.

Drool doesn't make a good comment.

Re: How People Get Rich Now

#475

Post by zo1 »

whimsicalism wrote: post #276
bondarchuk wrote: post #80

Earlier quoted context omitted.

But that is the government inflation, which is considered by some to be fake. Shadowstats [1] says inflation would be about 5%/year if we use the same methodology as in 1990, which gives about 60% over 10 years, i.e. you'd have to make 320k now. I'm just eyeballing the chart but if we use the 1980 method (~7% a year) it's almost 100% (i.e. you'd have to make 400k now). For another example, Dow Jones with dividends re…

Yes, and those trails from airplanes are considered by some to be mind control chemicals. I wonder why the whole "secret inflation" theory seems so popular among techies, I see it multiple times a week on HN.

The same "techies" that are proponents of using Goodhart's law to describe measures of development effort?

https://en.wikipedia.org/wiki/Goodhart%27s_law

Or how about https://en.wikipedia.org/wiki/Campbell%27s_law ?

Both of those are good and reasonable rules to describe the world, and something that is very intuitive. That is why a lot of people find government inflation stats suspect - even if they are measured correctly!

Re: How People Get Rich Now

#476

Post by JMTQp8lwXL »

aqme28 wrote: post #11

I don't think that the top 100 richest people is a good dataset. You can be extremely rich without making it anywhere near that list. While a lot of those top 100 people made it to that list by starting companies, I'm curious how many of them did so by leveraging family or inherited wealth.

People should read how the Forbes 400 list got started. It was extremely difficult to get off the ground. It's hard to know who has the most wealth -- it isn't public information, after all. Those who become wealthy via public markets have their ownership disclosed, so we can place a minimum value on their assets, and as a proxy, their total net worth.

The changes to the list over the decades could be more a function of wealth disclosure, which are mandated by the regulatory requirements of equity markets (e.g., we can all look up Zuckerberg's percentage ownership of Facebook).

Re: How People Get Rich Now

#477

Post by djrogers »

alpha_squared wrote: post #465
missedthecue wrote: post #452

Earlier quoted context omitted.

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 o…

> 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.

While pedantically true, in reality this is generally not the case. As long as you are still employed by the company that granted you the options, you do not have to exercise them ('invest') until you wish to sell them. What this means in practice is that nary a single dollar ever comes out of your pocket.

Re: How People Get Rich Now

#478

Post by sidlls »

purple_ferret wrote: post #95

>So it's not 2020 that's the anomaly here, but 1982. The real question is why so few people had gotten rich from starting companies in 1982...a wave of consolidation was sweeping through the American economy Microsoft, Oracle, Apple, Bloomberg, etc were all started in the late 70's/ early 80's. Their founders are the richest people in the world. Seems like the question he's asking, though, is why weren't they obscene…

> Every time I read one of PG's posts, it seems like he's working from a narrative that he's trying to conform facts to.

Because that's precisely what he's doing.

Re: How People Get Rich Now

#479

Post by anon_tor_12345 »

jdminhbg wrote: post #336
anon_tor_12345 wrote: post #198

Earlier quoted context omitted.

not sure what this means since i'm not a native english speaker - i understand praxis to mean something that you do instead of something that you say.

In standard American English, 'praxis' is a Marxist shibboleth. For a non-loaded term, you can just use 'practice.'

I'm not sure what marxism has to do with this (I don't think Marx wrote about charity) and although I'm not a native speaker I'm pretty good at syntax/semantics:

>the solution to guilt is more speech instead of praxis

vs

>the solution to guilt is more speech instead of practice

Second one is vague and unclear.

Re: How People Get Rich Now

#480

Post by drexlspivey »

alpha_squared wrote: post #465
missedthecue wrote: post #452

Earlier quoted context omitted.

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 o…

> 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.

Stock options and shares are pretty much equivalent. If the stock price goes up the option goes up (by a ratio). You don’t have to put your own money in, i.e you get 100 options every quarter, you sell 50 of them to get the money to exercise the other 50.

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