4 ms·

If course it is...it's a natural consequence of compound interest. One's ability to accumulate additional wealth scales exponentially with their level OF EFFORT

• petemill 7y ago
  Classic. Poor people just aren't working hard enough!
  • billions 7y ago
    How did you get the computer you're writing on, if not by the method described above?
    • deleted 7y ago
      [deleted]
    • lucideer 7y ago
      (not op but) parents supported me through a high quality education, in the safe wealthy western country they brought me into, helped me to develop social skills, and provided a stable upbringing which—all combined—gave me the confidence, comfort and skills to navigate the labour market, secure a well-paying job, and eventually use my wages to purchase this computer.
      • billions 7y ago
        Sound like you got there exactly by the method described above.
        • mikepurvis 7y ago
          Um, but the point is that most of that is stuff he had no control over. The Econ 101 fantasy of "work hard, get ahead" doesn't apply if being a straight white male born into a middle class western family means you're starting 80% of the way to the finish line.
          • billions 7y ago
            Please keep your prejudices out of this. How did hunter-gatherers get ahead?
            • dang 7y ago
              Would you please stop posting in the flamewar style to HN, and stop using HN for ideological battle? Those are things we're trying to avoid here and you've unfortunately been doing them repeatedly. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
            • mikepurvis 7y ago
              A combination of hard work and good luck. But of course, it was a lot harder to inherit massive wealth in those days. :)
            • jodrellblank 7y ago
              I can suggest that fishermen don’t get ahead through working harder, but more through being near a livelier bigger body of water with plants more suitable for fashioning into fishing lines. Hunter gatherers - by being the son of the chief and getting chosen for the most instruction and preferable kills? By not having raids of people stealing everything you gather? By hoarding a secret fund of very desirable plants which they guard jealously to retain status? By being more attractive?
  • mikepurvis 7y ago
    Yup, easy rebuttal to that one is just looking at how insanely hard some poor people work, while still struggling to succeed: https://www.nytimes.com/2019/01/31/books/review/stephanie-land-maid.html https://www.nytimes.com/2019/01/31/books/review/stephanie-la... The more insidious version of this is arguing over whose labours have more "market value". And there's something to that, but I can't get away from the feeling that it's deeply unfair how a software professional can coast for weeks on the occasional flash of insight or burst of productivity, while a housecleaner works two full time jobs and still is one unexpected car repair from insolvency.
• lucideer 7y ago
  You're assuming a world without parents. What an odd world. How do people come to be?
  • billions 7y ago
    You're assuming you're not born to rich parents. How wealthy are you compared to the people living on $1 per day?
    • jhomedall 7y ago
      Where did he assume that?
• mikepurvis 7y ago
  But "investing" is just rent-seeking from other people doing actual work. Literally it's taking a portion of the profits of someone else's labour in exchange for access to your capital.
  • AnthonyMouse 7y ago
    It's only rent seeking if the capital isn't worth anything or was illicitly obtained. If you drive a truck for ten years to save up enough to buy your own truck, and then drive it eight hours a day while you pay two other people to drive it the other sixteen hours a day, you're making more money than them for the same work. But it's only because you saved instead of spent for ten years, and the only reason they have a job driving a truck is that you have a truck. They have neither a truck nor the money to buy one, so without you they're standing on a street corner with no job.
    • AmericanChopper 7y ago
      I’ve gotten the impression that many HN commenters seem to think having a job is a form of slavery.
• smashthepants 7y ago
  You're assuming a world without inheritance, nepotism, politics, lobbying, etc. So many factors go into how much a person's effort can compound....
  • billions 7y ago
    Imagine missing an arm! There's always barriers, however, focusing on what you don't have won't result in progress.
• ergothus 7y ago
  The fallacy of your argument is that you equate "requires effort" with "the level of results scales with level of effort" If I have nothing, I have a couple of days to live - I need water, food, shelter. I cannot afford to be picky in the means of getting these. I find a manual labor task. It's hard, exhausting work, but I get paid and can buy water, food, and shelter. Through work and cleverness, I can improve my situation. And "improve" almost always means LESS work, LESS exhaustion, MORE security. If I have $10,000, I can have at least a few months of water, food, and shelter. I can be picky in how I obtain employment. I can afford to travel distances to find better opportunities (better = LESS work, LESS exhaustion, MORE security). Should something happen (illness, transportation troubles, etc) I can arrange to work around it. Just having that initial wealth creates an imbalance that is unrelated to my level of effort. If I have $5 million, I can live modestly off the interest. My "effort" is finding an investment that outstrips inflation enough to let me live off the remainder. This is effort, sure, but it is not 40+ hour work weeks. It is not holding down multiple jobs. It is not skipping paying for car insurance or car inspections or oil treatments because you need one more month to make the payments. Sure, there are millionaires spending 60+ hours/week trading and dealing. And they are successful. That's fine, but that's not the whole of existence. (it is also very selective - how many people work hard - that hard or harder - and aren't millionaires? That's not the model I want everyone striving towards. That's not success, that's just obsessive wealth.
• jodrellblank 7y ago
  The "Just World" fallacy written into a single comment. It starts with "effort leads to results", and then mixes that with "effort is virtue" and concludes "people who have results, must be virtuous". Then turns it around and says "people who don't have results must not be virtuous, and therefore deserve their lack of results". "Effort leads to results" is based on the Just World idea that if you do what the winners do, you must get the results the winners got. It's only fair! If you invest "properly" then you must get good results. If you don't get what the winners got, you must not have been doing what they did well enough, and you only have yourself to blame. Nevermind the post-hoc definition of "properly" where, if it worked it was proper, and if it didn't work, it must have been improper. Reinforced by Survivor Bias - you can't see how many people invested like Warren Buffet, but didn't get results, so somehow their effort doesn't count. Same reasoning as "proper" earlier - if it worked, it counts, if it didn't work, it doesn't count. Just World where successful people deserve it, and unsuccessful people deserve it too. It falls apart again when you look at lottery winners - their results were disconnected from their initial effort. That single counterexample is enough, the problem is not that they got money unfairly, the problem is that you or I cannot do what they did - choose a winnint ticket - and get the same results they got. For the mindset to work, there must be a path going from effort to success, but here there is not one. You can't defend the way they got success as any kind of virtue, so it has to be put down to luck, and luck has to be outside the system, so the Just World can be upheld. It must be true that rich people were hard working, people who got smarter and created value for others, because if it was luck, we can no longer sell people the pipe dream "you can do what they did, and achieve what they achieved", and use it to manipulate and guilt and shame them. It must have been hard work that made Amazon successful (survivor bias: don't look at any other internet company, any other shop, any other investor choices, they clearly didn't deserve success because they didn't get success, by definition). It can't have been luck that Jeff Bezos was born who he was, where he was, had the ideas he had, got the investors he got, in the dotcom boom he was in... all that was effort. But in a fatalist, determinist view, there's no place for luck or effort. He got what he got, because he was who he was, in the place he was in, in that part of universe configuration space. You can't have what he had, because you can't do what he did, because you aren't him, in his environment, in his area of spacetime, anymore than you picked the right lottery ticket. I don't know what room there is for free will in this view, whether people can still choose to add effort to things, but: "investing it properly" - there is no properly. Some investments work, some don't. Whether they work after the fact can't be the determining factor in whether they were proper. "How do people build wealth from the ground up?" // "They work hard each and every day and that effort COMPOUNDS." - those two can both happen, but correlation is not causation. "They get smarter" - disconnected virtuous thinking. People generally don't consider there is any way to "get smarter". Because they got wealthy post-hoc, doesn't mean they must have become smarter (read: better) people. "they get better creating value for others" - logically inaccurate; they might get better at extracting value not creating it, they might get better at manipulating people to see value where there is none, they might get wealth through large groups of people speculating others will see value where none ends up existing. "When you make strangers happy, they reward you with their money" - sometimes yes, sometimes no, correlation isn't causation, sometimes the two aren't even correlated. I have made strangers happy and received no monetary benefit on many occasions. "a fair exchange" - in the sense that you want wealth and wealth creation to be seen as virtue, maybe. "This is how wealth is made - compound effort" - wealth is made by magicking money into existence through debt, and giving it to someone. Almost all "wealth" in the global economy is fictional credit, not backed by material anything, not directly correlated with creating human happiness. Holding wealth isn't virtue and is disconnected from compound effort and largeyl disconnected from doing useful things for others. With so many trillions of dollars in the global economy, you'd think everyone would be ecstatic 24/7 now! "One's ability to accumulate additional wealth scales exponentially with their level OF EFFORT.*" - How much EFFORT did Warren Buffet put into Berkshire Hathaway compared to a coal miner or a partner in a law firm working 16 hour days, or a startup founder working 16 hour days but being squashed by a bad faith third party? How much EFFORT did Elon Musk put into Tesla and SpaceX compared to the other smart, hardworking, long-hours-pulling engineers designing Tesla cars and SpaceX rocket engines? Did Betsy DeVos put into marrying rich? Then, accept this, and one "must wnat to reward the poor and lazy", which is bad because they're clearly digusting inferior humans who must be lazy because they are poor, and therefore deserve what they have. But that isn't the only conclusion of accepting this reasoning is awful, another is that if wealth doesn't reliably, repeatably, come from effort, people without wealth can't be labelled untouchables and exploited by their betters, and need to be seen as equally deserving humans in disadvantaged situations - including familially, educationally, genetically, nutritionally, and other ways - as well as geographically.
• mypalmike 7y ago
  Give your financial advisor $8M and tell him you're happy with a 4% annual return. If you can live on an annual pre-tax income of a mere $200K, the remaining $120K gets compounded. Zero effort, compound growth, risk bordering on zero. *Edit : a typo