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Gosh. OP made me sad with his thesis. "1. For owners, work is optional." ... As an owner I wish this were true. For me and most owners I know work is mandator

by rrggrr 9y ago

Gosh. OP made me sad with his thesis. "1. For owners, work is optional." ... As an owner I wish this were true. For me and most owners I know work is mandatory, and its 60 hour weeks and a lot of sleepless nights. There is no safety net. There is no unemployment. I get no workman's compensation. I have no employment law protections. Its, as one HN comment said some time ago, "a suffering contest" a lot of the time. "2. ...your stuff will keep on making money forever." ... Again, I wish this were true. Lifetime income producing investments are hard to find where volatility, fees, inflation, taxes and life's circumstances don't erode value. Sure, the truly wealthy are set. But most business owners are not truly wealthy, and the exit strategies just aren't there in many industries. "3. We can get entrepreneurship without the enormous rewards to ownership we have today" ... Anyone whose dealt with the day-to-day grind of owning a business would be especially offended by this comment. A firehose of pain, suffering and risk flows to the owner in the form of litigation, regulators, employees, vendors, customers, bank officers, etc., etc. I've equated it to a "lazy susan" dispensing aggravation in every conceivable form. Its the reward - if you can get it - that makes it worthwhile. Try just getting divorced as an owner and you become an instant convert to rewarding ownership. Yes, rent-seeking monopolies are bad. Yes, more needs to be done to create opportunities for wealth creation by employees - to give them the freedom to say "no". No, punishing ownership isn't the answer. UPDATE x2: I'm really not confusing types of owners. The author's thesis is broad not only in the article, but in his works in general. Access to passive income investments (eg. REIT's) is among the few places small business owners can go to rent-seek. Rent seeking is bad under a few sets of conditions but doesn't deserve author's indictment.

maerF0x0 9y ago
I think OP is not talking about the kind of owners you're thinking of. "Owner" of a startup, or "Owner" of a unvested equity package etc. are not his intended group. I think its more like people who can easily meet their needs/wants even while holding something like a dividend fund or w/e. Owner of sufficient passive income assets that any extra effort or income or ROI is only gravy.
ktta 9y ago
You are mixing together business owners and rentiers (property owners). Very different things. Property owners don't need to work 60-hour weeks unless they are the sole handyman for 100+ houses.
- cookiecaper 9y ago
  A lot of work goes into property ownership. There is an entire industry that exists to relieve property owners of that burden: property management companies. The tradeoff is that if you use a property management company, most of the profit from your properties flows to them, because they don't work for free. There is also a non-negligible risk involved in moving your control of your assets over to a barely-interested third party. Truly passive income is rare, and it always involves a dollar-and-cents tradeoff in how much profit and oversight you're willing to forfeit to others in exchange for open time. Very few people are Scrooge McDucks with all the time in the world to swim around in a vault full of gold coins, and of those rare people who could, even fewer actually find that to be a worthwhile use of their time. The key takeaway here is that everyone has got their problems and concerns, and in this competitive world, it is naive to assume that anyone can maintain their position without significant effort.
  - fsargent 9y ago
    Property management companies do not take the majority of the profit. They often work for marginal fees based on the unit itself - somewhere around 10% of yearly rent. On top of that are fees for the maintenance of the building. Depending on how you bought the place you may need to pay financing -- or not. The rest is pure gravy. And that's just the rent. Next you also need to take into account the appreciation of the underlying asset - the land the property is built on. This is where the majority of the profits from home ownership come from. A lot of work goes into property ownership. It's just not very expensive.
  - ktta 9y ago
    >A lot of work goes into property ownership Sure, but the $/hour return is much higher that the average job. 'A lot' isn't a good quantifier. I bet the same people who live in the house he rents work a lot more for a lot less money. >Very few people are Scrooge McDucks with all the time in the world to swim around in a vault full of gold coins True, but there are a lot more people who comfortably live off money their investments and properties make. This isn't about the 1%. >The key takeaway here is that everyone has got their problems and concerns, and in this competitive world, it is naive to assume that anyone can maintain their position without significant effort. Key takeaway from where? The author point still stands. The takeway from the article is that people don't get paid according to their hardwork, rather it is a lot of luck. It is naive to assume anyone can maintain their position without significant effort, sure. But it is also naive to declare that without knowing for certain. I personally know people who work less than hour a week and make as much as the average software engineer in the US. Sidenote: This whole thread is sad to read. Most comments take a single part of the article then start to bash the author or question the validity of his thesis. Many on here didn't even bother to read the article properly, which I assume the topmost parent of this comment chain is also a part of. Life isn't fair, and many people have trouble with coping with that fact. I just didn't think HN would have trouble with that too.
urethrafranklin 9y ago
Did you read the whole article? You totally whooshed on the meaning of owner.
- rrggrr 9y ago
  You are wrong. The author is very much concerned about the employer-employee relationship. Not only did I read the article, I also read the OPs bio and glanced at his philosophy toward property rights. He appears to have come to the conclusion that the social contract isn't really beneficial, and that Hobbes state of nature isn't a thing, and that left to their own devices - people's better angels will bring about higher social equality.
  - vitaminbandit 9y ago
    Ah when all else fails, go for the ol' ad hominem.
rayiner 9y ago
You're conflating two different roles: owner and operator. While many owners, particularly of smaller businesses, wear both hats, your responses to points (1) and (3) arise out of wearing the operator hat, not the owner hat. For the companies that comprise most of the economy (less than half of U.S. GDP is attributable to small businesses), ownership and operatorship are distinct roles. The CEO of GE is not the company's owner; the shareholders who own GE don't face the travails of operating it.
- deleted 9y ago
  [deleted]
- rrggrr 9y ago
  US small businesses, collectively, are the largest employer of US citizens, especially at the margins of society where the author's "right to say no" is at its weakest. Its these small businesses, trying to accumulate wealth through property rights and rent-seeking, that would be disproportionately impacted were the author's philosophy to be adopted.
  - int_19h 9y ago
    The author's philosophy is not to prohibit rent-seeking, but to tax it appropriately. Given that it's currently taxed less than income from labor, I don't see what's so controversial about that notion.
jackmodern 9y ago
couldn't you just incorporate and pay yourself a salary as well as unemployment premiums / disability premiums and other such benefits? At least that is kind of a safety net? albeit a crappy one.
norea-armozel 9y ago
I think there's a huge difference between an owner of a small company and a majority owner in a major corporation or that a CEO of said major corporation. The former has little, if any, support beyond a small circle of friends, associates, and business partners. The latter has an entire tax system setup to let them fail and come up smelling like roses. Not to mention the latter has many more options and seem to be rewarded by stockholders for failing (aka golden parachute).
david_shaw 9y ago
> UPDATE: I'm really not confusing types of owners. The author's thesis is broad not only in the article, but in his works in general. I totally agree with your points, but only when talking about the traditional/entrepreneurial sense of "business owner." The article is talking more about owning equity in a business, whether that's real estate (which is his example), or just investing in businesses. He even explicitly states that: > Owners do not have to be entrepreneurs. They don’t even have to be competent. They can hire competent people to manage their money for them. The amount of 'entrepreneurship' in my story was miniscule. In other words, if you're very wealthy, you can invest in diversified REITs and have exposure to the real estate market. You do not (and cannot, really) work on these projects, and your investments -- ownership of real estate through REITs -- will keep making money. That's not to say it's without risk, of course: the market could crash, the funds could fail to return on investment, the business could collapse. Again, I think that for the HN crowd, your critiques are totally valid and I agree 100%. I just think this article is more about "hey, if you're really wealthy, your money can work for you!" Not that that's particularly groundbreaking.
deleted 9y ago
[deleted]

by rrggrr 9y ago

maerF0x0 9y ago

I think OP is not talking about the kind of owners you're thinking of. "Owner" of a startup, or "Owner" of a unvested equity package etc. are not his intended group. I think its more like people who can easily meet their needs/wants even while holding something like a dividend fund or w/e. Owner of sufficient passive income assets that any extra effort or income or ROI is only gravy.

ktta 9y ago

You are mixing together business owners and rentiers (property owners). Very different things. Property owners don't need to work 60-hour weeks unless they are the sole handyman for 100+ houses.

cookiecaper 9y ago
A lot of work goes into property ownership. There is an entire industry that exists to relieve property owners of that burden: property management companies. The tradeoff is that if you use a property management company, most of the profit from your properties flows to them, because they don't work for free. There is also a non-negligible risk involved in moving your control of your assets over to a barely-interested third party. Truly passive income is rare, and it always involves a dollar-and-cents tradeoff in how much profit and oversight you're willing to forfeit to others in exchange for open time. Very few people are Scrooge McDucks with all the time in the world to swim around in a vault full of gold coins, and of those rare people who could, even fewer actually find that to be a worthwhile use of their time. The key takeaway here is that everyone has got their problems and concerns, and in this competitive world, it is naive to assume that anyone can maintain their position without significant effort.
- fsargent 9y ago
  Property management companies do not take the majority of the profit. They often work for marginal fees based on the unit itself - somewhere around 10% of yearly rent. On top of that are fees for the maintenance of the building. Depending on how you bought the place you may need to pay financing -- or not. The rest is pure gravy. And that's just the rent. Next you also need to take into account the appreciation of the underlying asset - the land the property is built on. This is where the majority of the profits from home ownership come from. A lot of work goes into property ownership. It's just not very expensive.
- ktta 9y ago
  >A lot of work goes into property ownership Sure, but the $/hour return is much higher that the average job. 'A lot' isn't a good quantifier. I bet the same people who live in the house he rents work a lot more for a lot less money. >Very few people are Scrooge McDucks with all the time in the world to swim around in a vault full of gold coins True, but there are a lot more people who comfortably live off money their investments and properties make. This isn't about the 1%. >The key takeaway here is that everyone has got their problems and concerns, and in this competitive world, it is naive to assume that anyone can maintain their position without significant effort. Key takeaway from where? The author point still stands. The takeway from the article is that people don't get paid according to their hardwork, rather it is a lot of luck. It is naive to assume anyone can maintain their position without significant effort, sure. But it is also naive to declare that without knowing for certain. I personally know people who work less than hour a week and make as much as the average software engineer in the US. Sidenote: This whole thread is sad to read. Most comments take a single part of the article then start to bash the author or question the validity of his thesis. Many on here didn't even bother to read the article properly, which I assume the topmost parent of this comment chain is also a part of. Life isn't fair, and many people have trouble with coping with that fact. I just didn't think HN would have trouble with that too.

urethrafranklin 9y ago

Did you read the whole article? You totally whooshed on the meaning of owner.

rrggrr 9y ago
You are wrong. The author is very much concerned about the employer-employee relationship. Not only did I read the article, I also read the OPs bio and glanced at his philosophy toward property rights. He appears to have come to the conclusion that the social contract isn't really beneficial, and that Hobbes state of nature isn't a thing, and that left to their own devices - people's better angels will bring about higher social equality.
- vitaminbandit 9y ago
  Ah when all else fails, go for the ol' ad hominem.

rayiner 9y ago

You're conflating two different roles: owner and operator. While many owners, particularly of smaller businesses, wear both hats, your responses to points (1) and (3) arise out of wearing the operator hat, not the owner hat. For the companies that comprise most of the economy (less than half of U.S. GDP is attributable to small businesses), ownership and operatorship are distinct roles. The CEO of GE is not the company's owner; the shareholders who own GE don't face the travails of operating it.

deleted 9y ago
[deleted]
rrggrr 9y ago
US small businesses, collectively, are the largest employer of US citizens, especially at the margins of society where the author's "right to say no" is at its weakest. Its these small businesses, trying to accumulate wealth through property rights and rent-seeking, that would be disproportionately impacted were the author's philosophy to be adopted.
- int_19h 9y ago
  The author's philosophy is not to prohibit rent-seeking, but to tax it appropriately. Given that it's currently taxed less than income from labor, I don't see what's so controversial about that notion.

jackmodern 9y ago

couldn't you just incorporate and pay yourself a salary as well as unemployment premiums / disability premiums and other such benefits? At least that is kind of a safety net? albeit a crappy one.

norea-armozel 9y ago

I think there's a huge difference between an owner of a small company and a majority owner in a major corporation or that a CEO of said major corporation. The former has little, if any, support beyond a small circle of friends, associates, and business partners. The latter has an entire tax system setup to let them fail and come up smelling like roses. Not to mention the latter has many more options and seem to be rewarded by stockholders for failing (aka golden parachute).

david_shaw 9y ago

> UPDATE: I'm really not confusing types of owners. The author's thesis is broad not only in the article, but in his works in general. I totally agree with your points, but only when talking about the traditional/entrepreneurial sense of "business owner." The article is talking more about owning equity in a business, whether that's real estate (which is his example), or just investing in businesses. He even explicitly states that: > Owners do not have to be entrepreneurs. They don’t even have to be competent. They can hire competent people to manage their money for them. The amount of 'entrepreneurship' in my story was miniscule. In other words, if you're very wealthy, you can invest in diversified REITs and have exposure to the real estate market. You do not (and cannot, really) work on these projects, and your investments -- ownership of real estate through REITs -- will keep making money. That's not to say it's without risk, of course: the market could crash, the funds could fail to return on investment, the business could collapse. Again, I think that for the HN crowd, your critiques are totally valid and I agree 100%. I just think this article is more about "hey, if you're really wealthy, your money can work for you!" Not that that's particularly groundbreaking.

deleted 9y ago

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