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Those are outliers, I think. Most wealth is family wealth and it is measured in the billions of assets under management. The land is owned. The companies are ow

by bogle 8y ago

Those are outliers, I think. Most wealth is family wealth and it is measured in the billions of assets under management. The land is owned. The companies are owned. The bonds and share certificates are in the bank.

montrose 8y ago
I believe only about a third of big fortunes are inherited.
- bogle 8y ago
  Perhaps someone else knows the actual ratio of inherited to earned wealth. I'm sure it varies but the majority of people, in fact almost all of them, are not going to win the lottery. My experience of wealth has been through working in financial services where families have billions (UKP) in assets and whole firms managing that for them for many generations. Also of living in a country that's been owned in very large chunks for hundreds of years (Scotland).
  - TangoTrotFox 8y ago
    In America at least 67% of all "high-net-worth" individuals are self made, with only 8% directly inheriting their wealth. [1] If you consider only men (as women have an easier time marrying into wealth) 76% are self made. I don't think individual wealth is any big secret. The two pathways are either work for others and live well below your means -- an individual earning $50k and living on $20k is a millionaire in 17 years if he tosses that extra in index funds. Or start a business. The problem is that most of us consume near to what we earn, even when that's not necessary and don't have the ambition to start your own business, which now a days can start as simple setting up a webpage or selling some craft online where there is enormous amounts of free support. So becoming wealthy is impossible without, as you put it, winning the lottery. I completely agree with you that dynastic wealth is a huge negative, but at least in America it's not as huge a deal as it would seem. And I think people like Bill Gates are at least going in the right direction. He will be giving each of his offspring 'only' $10 million in inheritance. That's an enormous amount of money, but it's also literally about 1/10000th of his peak wealth. If your parents were worth $1 million, it'd be like them giving you an inheritance of $100. But I'm not sure this direction should be forced. Though I used to find a death tax very reasonable, lately I've come to wonder how justified it is, from the perspective of liberty, for a government to forcibly seize some large majority of the assets of an individual in passing, just because they happened to live a very successful life. And even if we do find this reasonable, enactment is going to be dubious at best as it would simply encourage people to distribute their assets, prior to death, to the same people it would have gone to previously by right of will. [1] - https://www.fa-mag.com/news/most-millionaires-self-made--study-says-14565.html https://www.fa-mag.com/news/most-millionaires-self-made--stu...
dageshi 8y ago
I was under the impression that most such fortunes end up disappearing within a few generations as the descendants squander it?
- bogle 8y ago
  I think you must be referring to President Trump?
  - dageshi 8y ago
    Nope? Just in general, inherited family wealth ends up getting spent within a few generations.

by bogle 8y ago

montrose 8y ago

I believe only about a third of big fortunes are inherited.

bogle 8y ago
Perhaps someone else knows the actual ratio of inherited to earned wealth. I'm sure it varies but the majority of people, in fact almost all of them, are not going to win the lottery. My experience of wealth has been through working in financial services where families have billions (UKP) in assets and whole firms managing that for them for many generations. Also of living in a country that's been owned in very large chunks for hundreds of years (Scotland).
- TangoTrotFox 8y ago
  In America at least 67% of all "high-net-worth" individuals are self made, with only 8% directly inheriting their wealth. [1] If you consider only men (as women have an easier time marrying into wealth) 76% are self made. I don't think individual wealth is any big secret. The two pathways are either work for others and live well below your means -- an individual earning $50k and living on $20k is a millionaire in 17 years if he tosses that extra in index funds. Or start a business. The problem is that most of us consume near to what we earn, even when that's not necessary and don't have the ambition to start your own business, which now a days can start as simple setting up a webpage or selling some craft online where there is enormous amounts of free support. So becoming wealthy is impossible without, as you put it, winning the lottery. I completely agree with you that dynastic wealth is a huge negative, but at least in America it's not as huge a deal as it would seem. And I think people like Bill Gates are at least going in the right direction. He will be giving each of his offspring 'only' $10 million in inheritance. That's an enormous amount of money, but it's also literally about 1/10000th of his peak wealth. If your parents were worth $1 million, it'd be like them giving you an inheritance of $100. But I'm not sure this direction should be forced. Though I used to find a death tax very reasonable, lately I've come to wonder how justified it is, from the perspective of liberty, for a government to forcibly seize some large majority of the assets of an individual in passing, just because they happened to live a very successful life. And even if we do find this reasonable, enactment is going to be dubious at best as it would simply encourage people to distribute their assets, prior to death, to the same people it would have gone to previously by right of will. [1] - https://www.fa-mag.com/news/most-millionaires-self-made--study-says-14565.html https://www.fa-mag.com/news/most-millionaires-self-made--stu...

dageshi 8y ago

I was under the impression that most such fortunes end up disappearing within a few generations as the descendants squander it?

bogle 8y ago
I think you must be referring to President Trump?
- dageshi 8y ago
  Nope? Just in general, inherited family wealth ends up getting spent within a few generations.