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> As the best predictor of your wealth is your parents wealth. Coming from an Eastern European country, my parents were making less than $10000 a year combined

by pacala 10y ago

> As the best predictor of your wealth is your parents wealth. Coming from an Eastern European country, my parents were making less than $10000 a year combined in the '80s and '90s. Nowhere near "wealthy" by western standards. However, they gifted me with a strong STEM education, which translated in material affluence 25 years later on a different continent. Might consider that the biggest transferable wealth across generations is a good education and a life long example of thrift and hard work.

kartan 10y ago
I complete agree on that. I was NOT arguing against good education. Education (that gives you knowledge), love (that gives you mental well being) and good habits (that makes you more resilient) are going to have a huge impact in your physical, mental and economic well being. > which translated in material affluence 25 years later on a different continent Yes. And that's why emigration has a big impact in improving world-wide socio-economic mobility. But suppose that you have started your live in an already rich country. In that case that country socio-economic mobility, by definition, is what gives you how dependent is your wealth on your parents wealth. World wide socio-economic mobility probably is quite good. As it is easier and cheaper to emigrate than ever and also because there has been a lot of growth in non-western countries. But the article was talking about North America. And in that case, as it is also true on all western countries, mobility is shrinking. In that scenario education, love, good habits are still important for your well being. But they are not strong indicators of your absolute wealth.
OvidNaso 10y ago
But there is one other factor more important than any and muddles everything..the desire to accumulate wealth.
- LnxPrgr3 10y ago
  If family socioeconomic status is the best predictor of your own wealth, it's hard to argue "wanting it" is the most important factor. Unless you genuinely believe most everyone living in poverty is perfectly happy to stay there.
drauh 10y ago
You are one case.
- daveguy 10y ago
  The epitome of anecdotal evidence.
  - tajen 10y ago
    I see your agenda: Reducing other people's arguments. The Godwin point applied to factual evidence. On the opposite: he's the proof that parent's wealth is not necessary, as opposed to the opinion of "disadvantage"-ers. So many of my mid-to-highschool classmates mates had desite for, air quote, me "working all the time", end of air quote. Can't ignore that.
    - aqme28 10y ago
      No one is arguing that family wealth is "necessary" for financial success, just that it's a strong predictor of it.
vintermann 10y ago
I'm sure giving your kids a good and useful education is one way to transfer wealth between generations. However, it sometimes fails. Direct ways of transferring wealth between generations never fail. And there's a lot of those going on too. Transferring values is hard. Transferring cash is easy.
- js8 10y ago
  > Transferring cash is easy. Not always easy. There are disasters too - hyperinflation, nationalization, monetary/land reform, privatization.. any of them can cause you to lose large amount of wealth.
  - vintermann 10y ago
    All of them hit work-acquired wealth just as hard as inherited wealth.
- Donzo 10y ago
  "Direct ways of transferring wealth between generations never fail." Sure it does. Plenty of heirs "lose the farm." It's been said that the first generation builds the business, the second generation manages it, and the third generation loses it. Maintaining and growing wealth are different than receiving and spending.
  - Terr_ 10y ago
    > It's been said that the first generation Ah, but how diluted does it get with each increasing cohort of heirs?
  - theoh 10y ago
    "Clogs to clogs in three generations": https://en.m.wiktionary.org/wiki/clogs_to_clogs_in_three_generations https://en.m.wiktionary.org/wiki/clogs_to_clogs_in_three_gen...
  - vintermann 10y ago
    Plenty of heirs "lose the farm." The transfer still worked. And people who get success more on their own sometimes lose the farm too (more often, I'd bet - I don't think there are any low risk strategies of getting richer than your parents). Maintaining and growing wealth are different than receiving and spending. It's much easier than getting it in the first place, though.
coldtea 10y ago
>Coming from an Eastern European country, my parents were making less than $10000 a year combined in the '80s and '90s. Nowhere near "wealthy" by western standards. However, they gifted me with a strong STEM education, which translated in material affluence 25 years later on a different continent. That's the very definition of anecdotal evidence and survivorship bias. Both things that a strong STEM education should help squash. It's also based on a historical peculiarity. In the west, and in particular in the US, to get a good STEM education you statistically have to be middle class or wealthy in the first place. (It's not impossible to have one if you're not -- just more difficult and rare). That wasn't the case in Eastern Europe, where the state provided easier access to higher education.
- deadtofu 10y ago
  Define "good STEM education". I had cable internet very early in it's history, and I used to for things other than playing Half Life. I did not end up going to Stanford, but I went to a decent state school and while I'm not rich, I'm certainly much better of than friends who had other majors.
  - haukilup 10y ago
    I'm not sure I get what you're going for with this comment
  - Retra 10y ago
    A good STEM education is one that would (at the very least least) make one wary of committing such obvious mistakes when drawing up arguments.
galfarragem 10y ago
Randomness is a more relevant factor than "gurus" want you to acknowledge, just change "strong STEM education" by "strong Non-STEM education" and keep all the rest. Probably your story would be slightly different no matter the hard work..

by pacala 10y ago

kartan 10y ago

I complete agree on that. I was NOT arguing against good education. Education (that gives you knowledge), love (that gives you mental well being) and good habits (that makes you more resilient) are going to have a huge impact in your physical, mental and economic well being. > which translated in material affluence 25 years later on a different continent Yes. And that's why emigration has a big impact in improving world-wide socio-economic mobility. But suppose that you have started your live in an already rich country. In that case that country socio-economic mobility, by definition, is what gives you how dependent is your wealth on your parents wealth. World wide socio-economic mobility probably is quite good. As it is easier and cheaper to emigrate than ever and also because there has been a lot of growth in non-western countries. But the article was talking about North America. And in that case, as it is also true on all western countries, mobility is shrinking. In that scenario education, love, good habits are still important for your well being. But they are not strong indicators of your absolute wealth.

OvidNaso 10y ago

But there is one other factor more important than any and muddles everything..the desire to accumulate wealth.

LnxPrgr3 10y ago
If family socioeconomic status is the best predictor of your own wealth, it's hard to argue "wanting it" is the most important factor. Unless you genuinely believe most everyone living in poverty is perfectly happy to stay there.

drauh 10y ago

You are one case.

daveguy 10y ago
The epitome of anecdotal evidence.
- tajen 10y ago
  I see your agenda: Reducing other people's arguments. The Godwin point applied to factual evidence. On the opposite: he's the proof that parent's wealth is not necessary, as opposed to the opinion of "disadvantage"-ers. So many of my mid-to-highschool classmates mates had desite for, air quote, me "working all the time", end of air quote. Can't ignore that.
  - aqme28 10y ago
    No one is arguing that family wealth is "necessary" for financial success, just that it's a strong predictor of it.

vintermann 10y ago

I'm sure giving your kids a good and useful education is one way to transfer wealth between generations. However, it sometimes fails. Direct ways of transferring wealth between generations never fail. And there's a lot of those going on too. Transferring values is hard. Transferring cash is easy.

js8 10y ago
> Transferring cash is easy. Not always easy. There are disasters too - hyperinflation, nationalization, monetary/land reform, privatization.. any of them can cause you to lose large amount of wealth.
- vintermann 10y ago
  All of them hit work-acquired wealth just as hard as inherited wealth.
Donzo 10y ago
"Direct ways of transferring wealth between generations never fail." Sure it does. Plenty of heirs "lose the farm." It's been said that the first generation builds the business, the second generation manages it, and the third generation loses it. Maintaining and growing wealth are different than receiving and spending.
- Terr_ 10y ago
  > It's been said that the first generation Ah, but how diluted does it get with each increasing cohort of heirs?
- theoh 10y ago
  "Clogs to clogs in three generations": https://en.m.wiktionary.org/wiki/clogs_to_clogs_in_three_generations https://en.m.wiktionary.org/wiki/clogs_to_clogs_in_three_gen...
- vintermann 10y ago
  Plenty of heirs "lose the farm." The transfer still worked. And people who get success more on their own sometimes lose the farm too (more often, I'd bet - I don't think there are any low risk strategies of getting richer than your parents). Maintaining and growing wealth are different than receiving and spending. It's much easier than getting it in the first place, though.

coldtea 10y ago

>Coming from an Eastern European country, my parents were making less than $10000 a year combined in the '80s and '90s. Nowhere near "wealthy" by western standards. However, they gifted me with a strong STEM education, which translated in material affluence 25 years later on a different continent. That's the very definition of anecdotal evidence and survivorship bias. Both things that a strong STEM education should help squash. It's also based on a historical peculiarity. In the west, and in particular in the US, to get a good STEM education you statistically have to be middle class or wealthy in the first place. (It's not impossible to have one if you're not -- just more difficult and rare). That wasn't the case in Eastern Europe, where the state provided easier access to higher education.

deadtofu 10y ago
Define "good STEM education". I had cable internet very early in it's history, and I used to for things other than playing Half Life. I did not end up going to Stanford, but I went to a decent state school and while I'm not rich, I'm certainly much better of than friends who had other majors.
- haukilup 10y ago
  I'm not sure I get what you're going for with this comment
- Retra 10y ago
  A good STEM education is one that would (at the very least least) make one wary of committing such obvious mistakes when drawing up arguments.

galfarragem 10y ago

Randomness is a more relevant factor than "gurus" want you to acknowledge, just change "strong STEM education" by "strong Non-STEM education" and keep all the rest. Probably your story would be slightly different no matter the hard work..