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How People Get Rich Now

paulgraham.com

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Re: How People Get Rich Now

#881

Post by zozbot234 »

domk wrote: post #155

This essay feels really dishonest. It tries to simplify the vastly complex problem of income inequality, on which there is a sea of existing, detailed research, into a simple "it's easier to start companies now" argument. And it doesn't even explore that argument in that much depth. What about bottom incomes? Why have those barely increased in real terms in the last 30 years, while the top 1% of incomes has been shoo…

> What about bottom incomes? Why have those barely increased in real terms in the last 30 years

Because the main source of productivity growth in that period was technical change, and those who were not well positioned to adapt were stuck at the bottom of the income ladder. Of course there were other factors (globalization, increasing costs in some sectors putting pressure on real incomes etc.), but that's the main story. It's quite consistent with Graham's argument.

Re: How People Get Rich Now

#882

Post by zozbot234 »

ludocode wrote: post #455
david927 wrote: post #194

Earlier quoted context omitted.

It's not just dishonest -- it's gross. Paul needs to spend less time on yachts. Being a mouthpiece to try to find a morality in increasing income inequality, when so many are suffering, more each year, is simply vile.

> You would think, after having been on the side of labor in its fight with capital for almost two centuries, that the far left would be happy that labor has finally prevailed. But none of them seem to be. You can almost hear them saying "No, no, not that way." This line is particularly disgusting. Labor has not prevailed. Labor in fact has been crushed by deregulation, union busting, automation, and most importantly…

> That line is disgusting. Labor has not prevailed

Workers in newly industrializing countries have seen huge gains in incomes. That's "labor" as well, and those gains should be counted when asking whether "labor" has done well.

Re: How People Get Rich Now

#883

Post by yardie »

WalterBright wrote: post #583
yardie wrote: post #548

Earlier quoted context omitted.

> top athletes getting contracts paying them millions of dollars whether or not they continue to win games. I know in the NFL, a lot of those contracts have clauses big enough to drive a dump truck through. Many of those million dollar football contracts are back loaded to only pay out if the athlete competes the full term [0]. Winning and losing games is definitely tied to whether they stay or are cut. Unlike a CEO,…

You don't think that CEOs also have a lot of performance related clauses? Stock options are, for example.

They get paid more for good performance but they don't get paid less for bad performance.

Athlete contracts on the other hand are fixed. If the athlete does well the team organization gains the benefit. If the athlete does poorly the athlete may be fired or transferred. And there is no gold parachute when they are cut.

So I don't recognize the similarities between CEO and pro athlete compensation at all.

Re: How People Get Rich Now

#884

Post by ashtonkem »

zozbot234 wrote: post #882
ludocode wrote: post #455

Earlier quoted context omitted.

> You would think, after having been on the side of labor in its fight with capital for almost two centuries, that the far left would be happy that labor has finally prevailed. But none of them seem to be. You can almost hear them saying "No, no, not that way." This line is particularly disgusting. Labor has not prevailed. Labor in fact has been crushed by deregulation, union busting, automation, and most importantly…

> That line is disgusting. Labor has not prevailed Workers in newly industrializing countries have seen huge gains in incomes. That's "labor" as well, and those gains should be counted when asking whether "labor" has done well.

I believe he’s talking about the US here, where labor is definitely losing at the moment.

Re: How People Get Rich Now

#885

Post by ashtonkem »

ludocode wrote: post #848
GeorgeTirebiter wrote: post #768

Earlier quoted context omitted.

PG is probably not delusional. To make such a claim without proper evidence is probably suggesting you may be having an emotion response to what he wrote. Understood. Not Cool to call people 'delusional' with paltry evidence. I know PG only a little, but I think his intention was to stir the pot on this old debate. But yes, for the lower 70% that have as much wealth as the top 10% (and it takes about $ 95K net worth…

He is either delusional or he's lying. How else can you explain his claim that labor has prevailed? As Amazon and Tesla employees fail to unionize, as Uber buys a law to avoid treating their drivers as employees, as the Democrats fail to increase the minimum wage despite holding all three branches of government, as the US is the only western nation without universal health care... What honest person can look at the c…

Nit: Democrats definitely don’t hold all three branches of government. They hold two, the Supreme Court is 6/3 conservative. Democrats have two chambers of one branch, the legislature, by the thinnest margins possible.

Re: How People Get Rich Now

#886

Post by drewkime »

ludocode wrote: post #455
david927 wrote: post #194

Earlier quoted context omitted.

It's not just dishonest -- it's gross. Paul needs to spend less time on yachts. Being a mouthpiece to try to find a morality in increasing income inequality, when so many are suffering, more each year, is simply vile.

> You would think, after having been on the side of labor in its fight with capital for almost two centuries, that the far left would be happy that labor has finally prevailed. But none of them seem to be. You can almost hear them saying "No, no, not that way." This line is particularly disgusting. Labor has not prevailed. Labor in fact has been crushed by deregulation, union busting, automation, and most importantly…

You're mis-reading him. You need to understand that this entire essay is an attempt to define tech founders as "labor". That's the only way any of what he's saying makes sense. So it's not really about, "how to get rich," but instead, "My friends and I aren't the next generation of robber barons, we're working-class folks like you."

Re: How People Get Rich Now

#887

Post by francisthesixth »

boatsie wrote: post #556
domk wrote: post #155

This essay feels really dishonest. It tries to simplify the vastly complex problem of income inequality, on which there is a sea of existing, detailed research, into a simple "it's easier to start companies now" argument. And it doesn't even explore that argument in that much depth. What about bottom incomes? Why have those barely increased in real terms in the last 30 years, while the top 1% of incomes has been shoo…

The inequality is also being caused by the internet. Before, people would choose a product, restaurant, retailer, service, entertainment, etc based on what was near them. Or what they had a good experience with. Or what their neighbor recommended. But now the internet has pushed everything into what’s “best”. So if a company comes out with a great product or service, it can get huge and popular fast. Same with movies…

> But now the internet has pushed everything into what’s “best”.

You put it as it was a bad thing per se. Moreover, what’s your suggestion?

Re: How People Get Rich Now

#888

Post by danans »

_fhnu wrote: post #861
danans wrote: post #569

Earlier quoted context omitted.

> Everyone who isn't like PG (so, 100% of the population) is finding it difficult to make enough money to have a life in the most basically fulfilling sense: education, retirement, support for loved ones, and good health This exactly. PG arguing the relevance of the Gini coefficient is oblivious to the the crumbling state of the public infrastructure in the US and the declining accessibility of high quality public go…

Life expectancy is dropping like a rock, and that's a number with a little more rigor behind it than PG's moronic hand waving. The guy has no idea what he's talking about and comes across as incredibly desperate to justify obscene hoarding of wealth. He'll draw a line between any two data points you can dig up, no matter how distant and spuriously correlated, if it will allow him to fellate a few billionaires. We get…

> The guy has no idea what he's talking about and comes across as incredibly desperate to justify obscene hoarding of wealth.

I don't think he's ill-intentioned, but like many people in his position, he's probably just personally unaffected by the crumbling of public goods.

He'll never take a dangerously overcrowded train, nor will he ever worry about whether his kids are in a safe school. Inequality seems mostly like a set of interesting stats to him, with little real world negative personal impact.

I don't believe he has ill intent because he has taken concrete steps to examine the issues (i.e. YC's UBI experiment), but it sounds like he's limited like anyone by the environment he mostly exists in, where he reasons about issues like inequality too much from data like the Forbes top 100 list.

Re: How People Get Rich Now

#889

Post by sangnoir »

d110af5ccf wrote: post #863
sangnoir wrote: post #856

Earlier quoted context omitted.

Software Engineers sometimes act as if administration and coordination of effort are unwelcome distractions to productivity, but those are necessary components to any viable commercial effort. The super-productive, "$3M/year engineer" who goes and starts a successful new startup always metamorphosizes into the pointy-haired boss. Why is that? Because that is the steady state of companies, anything else is transient.…

I mostly agree, but I think it's important to note that the necessity of administrative overhead (and associated friction) scales with team size and project scope. I expect a lone developer to be the most productive by far in the narrow sense of producing working code. However, at some point a single person just can't do everything that needs doing themselves. So I'll agree that as things grow administrative overhead…

> So if (as in PG's hypothetical) the developer is worth $80k at a big company, how much would you estimate them to be worth at a company of only 4 people that has a good idea and funding?

My point is that a 4-person company with a good idea and funding doesn't usually remain a 4-person company. Sure, they could be churning out good code at an amazing rate, but is transient state - in order to make money at the levels that the VC-class demands, pointy-haired bosses will be required, and they come with structure, meetings, emails, templates, and other administrata rituals.

edit: I think this is proof enough that VCs don't optimize for individual productivity - nobody who likes having more money does.

Re: How People Get Rich Now

#890

Post by bumby »

WalterBright wrote: post #791
bumby wrote: post #748

Earlier quoted context omitted.

I appreciate the advice. While I’ve only been investing this way for about 11-12 years, back testing has been statistically valid to the early 2000s (limited by the availability of index funds for comparison). You’re right though, who knows if it’ll work in 30 years. There’s some evidence that it may based on trends in institutional investing. That enough uncertainty to avoid putting all my eggs in that basket.

> early 2000s I got hammered really hard by the 2000 crash. Down something like 75%. I thought I was smart by not investing in bubble stocks. But the secondary die-off caught me. It was a bitter pill.

It’s certainly possible something similar can happen to me. Part of this is mitigated, I think, by the fact that the overall volatility is reduced. That’s one of the pitfalls I’ve seen in contrast to the growth plays not based on intrinsic value. I think it’s the main reason the risk-adjusted returns are better but time will tell. Black swan events always seem obvious only in hindsight.
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