How to earn a billion dollars

No. Earned income is salary, and taxed as such. Unearned income is capital gains, exercised options, etc, not taxed as income. It's pretty easy.

If we just use this tax office definition, it's effectively impossible to earn a billion dollars because you'd need to pay yourself ~$1.6 billion dollars in salary (depending on where you live), and very, very, few people can afford to do that

There is a "hack" to wealth, and PG has explained it here. You need a large addressable market with little competition where you can capture a small amount of value from a huge number of people at scale.

Individually, that value is often not worth much. A surgeon can save your life, and you'd give up most of your fortune for it. A starving person would do almost anything for food. Most startups don't create that kind of value for any one customer. They create a little bit of value for a lot of customers, and at scale that turns into enormous wealth.

That's what people are arguing when they say scale is a form of cheating. Maybe you got into the position to own it through harder work, smarter decisions, more risk taking, more grit, or more luck. But not a billion times more. Once you own it, you've locked yourself into a growth curve that scales with little additional work. In many cases, it gets easier as it grows.

Past a certain point, wealth is no longer tied to your work. It's tied to your ownership.

That's also why CEOs want equity. They don't want to be paid solely for their labor. They want ownership in large scale production so they can benefit from the growth of the system itself and eventually sell that ownership for far more than they could ever earn through wages alone.

This is why, as a software engineer, I favor equity compensation and have benefited from it myself. But I don't think I've worked harder than countless people in jobs that don't have this characteristic.

I wasn't paid more because I worked more. I was paid more because I owned something that scaled.

That's the "cheat."

What comes after?

Both things can be true:

- the incredible benefit brought about by YC companies as they grow into their markets and mint billionaire founders... - monopolizing, price fixing, what can feel like gouging, etc. as the temptations of what may be currently possible war with what may be ultimately wise (and for whom)...

Kind of like: - the temptation to appeal to the increasingly common set of hash-taggable moral & political absolutes... - the more measured, wisdom-dense sharing the best possible, and fortunately (hopefully? maybe?) most common form of billionaire-minting...

Is, or was there previously, a different, more American-value-compatible status quo?

... Historically did we IPO earlier, leaving more of the exponential on the table, leading to greater public wealth, resilience, opportunity, and capability? ... Is the profit-margin gas pedal ever pumped a tad aggressively preceding this, inducing trust wobbles in the public and customers as prices are raised and services degraded the quarter before, with share price corrections the quarter after? ... Do we (should we) maintain relatable humility in the face of success and wealth - surely earned, though perhaps better enjoyed by more enduring trophies (disease eradication; public works enhancements; life extension progress) than a mega-yacht in the Mediterranean?

Very easy to be a keyboard-warrior. Very hard to provide $1B in new capability and value.

Good read as always. Back to work.

Given how tech has gone from nerdy underdog to Orwellian, Machiavellian, dopamine-peddling overlord, I’m actually a bit surprised people aren’t more angry / upset.

Over the last 40 years there has been two career paths with “disproportionate leverage”: tech and finance.

I believe in capitalism, contracts and the rule of law. A founder starting a company and attracting capital, employees and customers and generating tremendous wealth I see as an opportunity, not a bug.

But if I were in a normal career the wealth generated by tech & finance would certainly look & feel like some form of cheat code.

The last forty years have been a huge transient. Massive. AI will probably push it even further.

I hope we as a society and democracy can survive the strain.