8 ms·

I don't think that the top 100 richest people is a good dataset. You can be extremely rich without making it anywhere near that list. While a lot of those top

by aqme28 6y ago

I don't think that the top 100 richest people is a good dataset. You can be extremely rich without making it anywhere near that list. While a lot of those top 100 people made it to that list by starting companies, I'm curious how many of them did so by leveraging family or inherited wealth.

api 6y ago
I'd be more interested in a study of how people move from lower classes to at least upper middle class.
- UnpossibleJim 6y ago
  https://www.visualcapitalist.com/the-decline-of-upward-mobility-in-one-chart/ https://www.visualcapitalist.com/the-decline-of-upward-mobil... Here's a chart that tries to show the decline of upward mobility in the U.S. with an article that explains it. While, from the reading I did while trying to find this - which was not a huge amount - it does appear down, somewhat, worldwide, it is in a much sharper decline in the U.S. on average. This, of course, is in comparison to European nations. Not a true "worldwide" comparison.
  - betwixthewires 6y ago
    Looking at that link, in particular I really like the 3 tier "chance of out-earning parents" chart because it shows that while average upward mobility may have gone down, there's a sharp decrease in upper classes moving up while the decrease for lower classes is much less. This means that the rich in fact get richer less so than lower class people move up, and by a huge margin, than in the mid 20th century. Also I like the stagnant wage growth numbers because it demonstrates that the corporations are no longer the gatekeepers to economic opportunity. If you're more likely to make money starting a business than getting a job somewhere and working there 30 years, this is good for everyone because their economic prospects aren't dictated by McDonalds and General Motors. It means a more diversified economy, more opportunity beyond the beaten path, and more creativity driving economic growth. I'd also like to see the criteria for "upper", " middle" and "lower" used in the chart about income distribution. Judging by the first graph of "is it all bad news?" I'd say it's a hard dollar amount delimitation, a very bad metric, because while that would appear to show a bad trend, all it shows is that more people have higher amounts of money. The only way to get a clear picture is to weight income/wealth with purchasing power as the delimiter between classes. Another note on this first graph, it clearly shows that less people are in the lower class and lower middle class, and more people are in the middle, upper middle and wealthy class with each graph since 1967, which means people have gotten richer and as a whole life is getting better for people economically. Ideally what you'd want to see is the bars to the right of each sample get bigger and the bars to the left get smaller with each sample, and you almost see exactly that. I'd like to see the same graphs in 20 years and that will tell if upward mobility has actually decreased. I'd also like to see this graph weighted with purchasing power. From those graphs, upward mobility looks perfectly fine, I'm getting the sense it peaked about 20-30 years ago, but has not had a sharp decline and is definitely still higher than it was 50 years ago.
    - UnpossibleJim 6y ago
      And, let's be honest, poverty and poor in the 40's and 50's was very different than poverty and poor in todays imaginations. I'm not saying it's fantastic and that the safety nets are great, but they exist. Especially for single mothers, which weren't thought of in the 40's and 50's. I'm not one who glorifies the 60's, but it did help reproductive rights (which is a big step out of a poverty cycle) and it brought in help for single mothers, from church groups to government.
  - labatyd 6y ago
    Starts at decade born 40's and goes from there. This is the moral equivalent of starting in mid March to look at stock gains. If we had the same information from the founding of our country until today it would probably look closer to a U with "born in the 40's" being pretty damn close to the top of that U. This should not be used by anyone to make any conclusions. The world just went through massive war that destroyed nearly all of Europes infrastructure and the demand to fix it mostly manifested as opportunity for Americans. Since then Europe has rebuilt and both India and China have arrived on the scene as powerhouses of their own. We will never have the same opportunities that we had then again, or at least we should all pray we don't.
- jedberg 6y ago
  Unless it's changed recently, I believe there is exactly one person on the billionaires list that started life in the bottom quintile -- Oprah. So you have a good question is all I'm trying to say.
  - areyousure 6y ago
    https://www.forbes.com/real-time-billionaires/ https://www.forbes.com/real-time-billionaires/ #1 was born to a teenage mom (and an alcoholic/deadbeat dad). Since she was still in high school, I assume she was probably in the bottom quintile of income. #7 was given up by his mother and adopted. #9 was born in the Soviet Union. It's likely his family's income (in rubles) was in the bottom quintile of the United States at the time. (Sources I've found suggest that the top 1% income cutoff in the SU was around 250 rubles per month, which is less than the $5,000--$7,500 cutoff for the bottom quintile in the US at the time.) #13 was born in Yemen before his family moved backed to India. One could probably assume that he was in the bottom quintile by US standards, because even today, the top 10% cutoff in India is below the bottom 10% in the United States. #18 was born in China and I have little doubt that he was far below the bottom quintile cutoff for the United States growing up. You might think it's a stretch to call Bezos's family "bottom quintile", but saying that billionaires Zhong Shanshan, Xu Jiayin, or Qin Yinglin weren't is hard.
    - jedberg 6y ago
      When I look at that list, Jeff Bezos is #1. The first woman on the list is at #10 and inherited her wealth. Are you looking at a different list? Also, people born in foreign countries had completely different experiences, and more importantly, what is relevant is if they were in the bottom quintile in their own country. If you're super rich in your own country then you have a lot of opportunity. For example Sergey Brin may have been born in Russia, but his family managed to come to the US when he was a kid and he was clearly middle class as a teen.
      - throwaway_1301 6y ago
        > When I look at that list, Jeff Bezos is #1. The first woman on the list is at #10 and inherited her wealth. Are you looking at a different list? I think the comment does refer to Jeff Bezos. Here is the relevant section from Wikipedia: "At the time of his birth, his mother was a 17-year-old high school student and his father was 19.[17] After completing high school despite challenging conditions, Jacklyn attended night school while bringing baby Jeff along.[18]" IMO a 17 year old attending night school is pretty low in terms of economic status. Also I am sure there are other cases but I know about #17 (Mukesh Ambani) and his father was a petrol bunk attendant - pretty low down even by Indian standards.
- sjg007 6y ago
  There are studies. The bay area is one of the best places for that to happen. New York as well I think.
josefresco 6y ago
I agree. A rich individual can give their child $0 in inheritance but one introduction, referral or diner party later and they could be set for life. In between this scenario, and the other (handed money) there are countless scenarios that make conclusions very cloudy.
- pc86 6y ago
  > A rich individual can give their child $0 in inheritance but one introduction, referral or diner party later and they could be set for life. It's a mighty big leap to go from a single intro to "set for life."
  - Pfhreak 6y ago
    Don't misinterpret what the parent is saying. It's not "one introduction will", it's "one introduction could". If you are wealthy and connected enough there are many folks who will gladly ensure your children are taken care of, if for no other reason than to be connected to the parent/family. An introduction might lead to a job, apprenticeship, or internship. It might lead to a partnership somewhere or the opportunity to invest in some way you would not normally have access to. Or it could open the door to further introductions and connections. Network effects are powerful things, and being introduced to the right node in the social graph can make all the difference.
    - fumar 6y ago
      Add to it that that one investment requires the capital to invest. I have no connections outside of my career bubble and those people are seemingly in the same class as I am. How would I ever supersede my class?...or should I even aspire to do so? It seems unlikely and in many ways out of my control. This is coming from someone who believes in a strong work ethic and increasing access to risk (good or bad).
    - seppin 6y ago
      I think it's dramatically understated as well how much of a permeant disadvantage not having connections from family/friends is. You can literally work your whole life and not be able to have a single deal be made that another person can ask a "family friend" to help facilitate in a matter of days. The door to some people is permanently closed, no matter how hard their "hustle".
VBprogrammer 6y ago
There is a pretty low bar for inherited wealth. Simply having a family who is able to support you if everything goes pair shaped (maybe as little as letting you live in your childhood bedroom for little or no rent) gives you a huge advantage over someone who isn't in that position. Having parents who are able to lend / invest / gift modest sums of money is yet another step up the ladder. All the way up to having parents with business / political contacts in the industry you are trying to move into.
- technofiend 6y ago
  >Having parents who are able to lend / invest / gift modest sums of money is yet another step up the ladder. >All the way up to having parents with business / political contacts in the industry you are trying to move into. Well that and understanding how to leverage those contacts. I have people in my social circle that could serve as contacts, but the idea of asking for that makes me extremely uncomfortable. And if I somehow forced myself to do it, it would still end up in a "what now" situation because it's not really clear what next steps are. I think the kind of people who know how to operate in those circles have a skillset that's not taught in a CS/EE curriculum.
  - 908B64B197 6y ago
    > I think the kind of people who know how to operate in those circles have a skillset that's not taught in a CS/EE curriculum. You nailed it. I don't think there's any formal way of learning it either.
- lostcolony 6y ago
  Yeah; the ways that small differences lead to big changes in outcomes is super interesting. I was lucky to live in a state where my college tuition was mostly paid for, and with a parent who, despite making very little (worked in the school system), was still able to help support me with a stable home and to help cover some of the gaps (like living on campus). I was very lucky. I realized later on the advantages other people had though when talking with people; a work colleague whose parents, though not rich, were far better off than mine, and had equipped her with life skills I and my family simply did not have. It was from her I learned about the company 401k, and investing in general, and caused me to realize that I should be investing money, not saving it.
eloff 6y ago
To make it on that list, you have to have succeeded at such an extreme outlier level that almost by definition almost everything had to have gone perfectly. That takes a lot of luck and advantages, such as family advantages. I'm not saying that detracts from what they accomplished, but they can't take all the credit either and it's not reproducible.
- boringg 6y ago
  I'd agree - I have seen a lot of wealthy family children completely underperform relative to this bar. I'd say it's the exception and far from the norm that wealthy families to produce exceptional children. Exception to the statement being wealth taken from your countries people through corruption (like Putin, Jinping etc).
  - pc86 6y ago
    I'd be curious to see if the rate of "exceptional" children is higher for "exceptional" families than "unexceptional" families since by definition it's going to be far from the norm regardless. But the rate could still be 2x or 3x (I don't think it is, but it's a possibility). There's a lot of focus on the exceptional but I think where having a very rich or wealthy family helps is less in a much bigger upside, which certainly exists in some degree, but in a much higher floor. If you are born into a single-income, lower-middle class family, your floor is poverty and even literally starving to death. If you're born into a family of two high-income individuals, the odds of you living your adult life in poverty are vanishingly small and your floor is probably something closer to a ho-hum middle/upper-middle life. If you're born into a family where one of your parents is the CEO of a publicly traded company and makes tens of millions a year, your floor is probably a $150k/yr lower management job in some sector-adjacent company that your parents had to call in a bunch of favors to get you. It's not so much that coming from an exceptional family increases the "genetic" odds of exceptionality, but it provides safety and security that allows you to take risks someone waiting tables at night to pay for college wouldn't be able to, which coupled with the natural contacts and associations you'll have, gives you a huge advantage.
    - 6y ago
Quarrelsome 6y ago
> I'm curious how many of them did so by leveraging family or inherited wealth. Its interesting to note that many of our own prized meritocratic examples owe their parents in terms of intellectual inheritance or first-round funding. I believe Trump's father (a billionaire in 2018 dollars) was given start up capital by his father who owned a diner in gold territory during the rush. Elon Musk I believe also was the beneficiary of a small amount of investment from his parents. The question is whether or not that "counts". It certainly counts when discussing disparate outcomes between demographic groups when discussing success/failure with broad brush strokes but probably doesn't when comparing aristocratic-like inheritances to startup wealth.
- FireBeyond 6y ago
  > Elon Musk I believe also was the beneficiary of a small amount of investment from his parents. There's so much mythology around this. I've heard the argument, "he had no support from his father", and I've read in more detail that one of the examples of said lack of support was "Elon and his friends wanted to buy and operate a video game arcade when they were teenagers, but his father refused to provide financial assistance". There's a whole world between "deadbeat" and "wouldn't buy his son and his friends their own video arcade".
boringg 6y ago
What is leveraging family? Thats kind of broad. I.e. having parents who were able to afford you extra time for learning, paying for secondary education so you have no debt, exposing you to interesting people/ideas or something more Trumpian like offering up a multi million loans for free? I'd agree top 100 is too small a data set.
deleted 6y ago
[deleted]
JMTQp8lwXL 6y ago
People should read how the Forbes 400 list got started. It was extremely difficult to get off the ground. It's hard to know who has the most wealth -- it isn't public information, after all. Those who become wealthy via public markets have their ownership disclosed, so we can place a minimum value on their assets, and as a proxy, their total net worth. The changes to the list over the decades could be more a function of wealth disclosure, which are mandated by the regulatory requirements of equity markets (e.g., we can all look up Zuckerberg's percentage ownership of Facebook).

by aqme28 6y ago

api 6y ago

I'd be more interested in a study of how people move from lower classes to at least upper middle class.

UnpossibleJim 6y ago
https://www.visualcapitalist.com/the-decline-of-upward-mobility-in-one-chart/ https://www.visualcapitalist.com/the-decline-of-upward-mobil... Here's a chart that tries to show the decline of upward mobility in the U.S. with an article that explains it. While, from the reading I did while trying to find this - which was not a huge amount - it does appear down, somewhat, worldwide, it is in a much sharper decline in the U.S. on average. This, of course, is in comparison to European nations. Not a true "worldwide" comparison.
- betwixthewires 6y ago
  Looking at that link, in particular I really like the 3 tier "chance of out-earning parents" chart because it shows that while average upward mobility may have gone down, there's a sharp decrease in upper classes moving up while the decrease for lower classes is much less. This means that the rich in fact get richer less so than lower class people move up, and by a huge margin, than in the mid 20th century. Also I like the stagnant wage growth numbers because it demonstrates that the corporations are no longer the gatekeepers to economic opportunity. If you're more likely to make money starting a business than getting a job somewhere and working there 30 years, this is good for everyone because their economic prospects aren't dictated by McDonalds and General Motors. It means a more diversified economy, more opportunity beyond the beaten path, and more creativity driving economic growth. I'd also like to see the criteria for "upper", " middle" and "lower" used in the chart about income distribution. Judging by the first graph of "is it all bad news?" I'd say it's a hard dollar amount delimitation, a very bad metric, because while that would appear to show a bad trend, all it shows is that more people have higher amounts of money. The only way to get a clear picture is to weight income/wealth with purchasing power as the delimiter between classes. Another note on this first graph, it clearly shows that less people are in the lower class and lower middle class, and more people are in the middle, upper middle and wealthy class with each graph since 1967, which means people have gotten richer and as a whole life is getting better for people economically. Ideally what you'd want to see is the bars to the right of each sample get bigger and the bars to the left get smaller with each sample, and you almost see exactly that. I'd like to see the same graphs in 20 years and that will tell if upward mobility has actually decreased. I'd also like to see this graph weighted with purchasing power. From those graphs, upward mobility looks perfectly fine, I'm getting the sense it peaked about 20-30 years ago, but has not had a sharp decline and is definitely still higher than it was 50 years ago.
  - UnpossibleJim 6y ago
    And, let's be honest, poverty and poor in the 40's and 50's was very different than poverty and poor in todays imaginations. I'm not saying it's fantastic and that the safety nets are great, but they exist. Especially for single mothers, which weren't thought of in the 40's and 50's. I'm not one who glorifies the 60's, but it did help reproductive rights (which is a big step out of a poverty cycle) and it brought in help for single mothers, from church groups to government.
- labatyd 6y ago
  Starts at decade born 40's and goes from there. This is the moral equivalent of starting in mid March to look at stock gains. If we had the same information from the founding of our country until today it would probably look closer to a U with "born in the 40's" being pretty damn close to the top of that U. This should not be used by anyone to make any conclusions. The world just went through massive war that destroyed nearly all of Europes infrastructure and the demand to fix it mostly manifested as opportunity for Americans. Since then Europe has rebuilt and both India and China have arrived on the scene as powerhouses of their own. We will never have the same opportunities that we had then again, or at least we should all pray we don't.
jedberg 6y ago
Unless it's changed recently, I believe there is exactly one person on the billionaires list that started life in the bottom quintile -- Oprah. So you have a good question is all I'm trying to say.
- areyousure 6y ago
  https://www.forbes.com/real-time-billionaires/ https://www.forbes.com/real-time-billionaires/ #1 was born to a teenage mom (and an alcoholic/deadbeat dad). Since she was still in high school, I assume she was probably in the bottom quintile of income. #7 was given up by his mother and adopted. #9 was born in the Soviet Union. It's likely his family's income (in rubles) was in the bottom quintile of the United States at the time. (Sources I've found suggest that the top 1% income cutoff in the SU was around 250 rubles per month, which is less than the $5,000--$7,500 cutoff for the bottom quintile in the US at the time.) #13 was born in Yemen before his family moved backed to India. One could probably assume that he was in the bottom quintile by US standards, because even today, the top 10% cutoff in India is below the bottom 10% in the United States. #18 was born in China and I have little doubt that he was far below the bottom quintile cutoff for the United States growing up. You might think it's a stretch to call Bezos's family "bottom quintile", but saying that billionaires Zhong Shanshan, Xu Jiayin, or Qin Yinglin weren't is hard.
  - jedberg 6y ago
    When I look at that list, Jeff Bezos is #1. The first woman on the list is at #10 and inherited her wealth. Are you looking at a different list? Also, people born in foreign countries had completely different experiences, and more importantly, what is relevant is if they were in the bottom quintile in their own country. If you're super rich in your own country then you have a lot of opportunity. For example Sergey Brin may have been born in Russia, but his family managed to come to the US when he was a kid and he was clearly middle class as a teen.
    - throwaway_1301 6y ago
      > When I look at that list, Jeff Bezos is #1. The first woman on the list is at #10 and inherited her wealth. Are you looking at a different list? I think the comment does refer to Jeff Bezos. Here is the relevant section from Wikipedia: "At the time of his birth, his mother was a 17-year-old high school student and his father was 19.[17] After completing high school despite challenging conditions, Jacklyn attended night school while bringing baby Jeff along.[18]" IMO a 17 year old attending night school is pretty low in terms of economic status. Also I am sure there are other cases but I know about #17 (Mukesh Ambani) and his father was a petrol bunk attendant - pretty low down even by Indian standards.
sjg007 6y ago
There are studies. The bay area is one of the best places for that to happen. New York as well I think.

josefresco 6y ago

I agree. A rich individual can give their child $0 in inheritance but one introduction, referral or diner party later and they could be set for life. In between this scenario, and the other (handed money) there are countless scenarios that make conclusions very cloudy.

pc86 6y ago
> A rich individual can give their child $0 in inheritance but one introduction, referral or diner party later and they could be set for life. It's a mighty big leap to go from a single intro to "set for life."
- Pfhreak 6y ago
  Don't misinterpret what the parent is saying. It's not "one introduction will", it's "one introduction could". If you are wealthy and connected enough there are many folks who will gladly ensure your children are taken care of, if for no other reason than to be connected to the parent/family. An introduction might lead to a job, apprenticeship, or internship. It might lead to a partnership somewhere or the opportunity to invest in some way you would not normally have access to. Or it could open the door to further introductions and connections. Network effects are powerful things, and being introduced to the right node in the social graph can make all the difference.
  - fumar 6y ago
    Add to it that that one investment requires the capital to invest. I have no connections outside of my career bubble and those people are seemingly in the same class as I am. How would I ever supersede my class?...or should I even aspire to do so? It seems unlikely and in many ways out of my control. This is coming from someone who believes in a strong work ethic and increasing access to risk (good or bad).
  - seppin 6y ago
    I think it's dramatically understated as well how much of a permeant disadvantage not having connections from family/friends is. You can literally work your whole life and not be able to have a single deal be made that another person can ask a "family friend" to help facilitate in a matter of days. The door to some people is permanently closed, no matter how hard their "hustle".

VBprogrammer 6y ago

There is a pretty low bar for inherited wealth. Simply having a family who is able to support you if everything goes pair shaped (maybe as little as letting you live in your childhood bedroom for little or no rent) gives you a huge advantage over someone who isn't in that position. Having parents who are able to lend / invest / gift modest sums of money is yet another step up the ladder. All the way up to having parents with business / political contacts in the industry you are trying to move into.

technofiend 6y ago
>Having parents who are able to lend / invest / gift modest sums of money is yet another step up the ladder. >All the way up to having parents with business / political contacts in the industry you are trying to move into. Well that and understanding how to leverage those contacts. I have people in my social circle that could serve as contacts, but the idea of asking for that makes me extremely uncomfortable. And if I somehow forced myself to do it, it would still end up in a "what now" situation because it's not really clear what next steps are. I think the kind of people who know how to operate in those circles have a skillset that's not taught in a CS/EE curriculum.
- 908B64B197 6y ago
  > I think the kind of people who know how to operate in those circles have a skillset that's not taught in a CS/EE curriculum. You nailed it. I don't think there's any formal way of learning it either.
lostcolony 6y ago
Yeah; the ways that small differences lead to big changes in outcomes is super interesting. I was lucky to live in a state where my college tuition was mostly paid for, and with a parent who, despite making very little (worked in the school system), was still able to help support me with a stable home and to help cover some of the gaps (like living on campus). I was very lucky. I realized later on the advantages other people had though when talking with people; a work colleague whose parents, though not rich, were far better off than mine, and had equipped her with life skills I and my family simply did not have. It was from her I learned about the company 401k, and investing in general, and caused me to realize that I should be investing money, not saving it.

eloff 6y ago

To make it on that list, you have to have succeeded at such an extreme outlier level that almost by definition almost everything had to have gone perfectly. That takes a lot of luck and advantages, such as family advantages. I'm not saying that detracts from what they accomplished, but they can't take all the credit either and it's not reproducible.

boringg 6y ago
I'd agree - I have seen a lot of wealthy family children completely underperform relative to this bar. I'd say it's the exception and far from the norm that wealthy families to produce exceptional children. Exception to the statement being wealth taken from your countries people through corruption (like Putin, Jinping etc).
- pc86 6y ago
  I'd be curious to see if the rate of "exceptional" children is higher for "exceptional" families than "unexceptional" families since by definition it's going to be far from the norm regardless. But the rate could still be 2x or 3x (I don't think it is, but it's a possibility). There's a lot of focus on the exceptional but I think where having a very rich or wealthy family helps is less in a much bigger upside, which certainly exists in some degree, but in a much higher floor. If you are born into a single-income, lower-middle class family, your floor is poverty and even literally starving to death. If you're born into a family of two high-income individuals, the odds of you living your adult life in poverty are vanishingly small and your floor is probably something closer to a ho-hum middle/upper-middle life. If you're born into a family where one of your parents is the CEO of a publicly traded company and makes tens of millions a year, your floor is probably a $150k/yr lower management job in some sector-adjacent company that your parents had to call in a bunch of favors to get you. It's not so much that coming from an exceptional family increases the "genetic" odds of exceptionality, but it provides safety and security that allows you to take risks someone waiting tables at night to pay for college wouldn't be able to, which coupled with the natural contacts and associations you'll have, gives you a huge advantage.
  - 6y ago

Quarrelsome 6y ago

> I'm curious how many of them did so by leveraging family or inherited wealth. Its interesting to note that many of our own prized meritocratic examples owe their parents in terms of intellectual inheritance or first-round funding. I believe Trump's father (a billionaire in 2018 dollars) was given start up capital by his father who owned a diner in gold territory during the rush. Elon Musk I believe also was the beneficiary of a small amount of investment from his parents. The question is whether or not that "counts". It certainly counts when discussing disparate outcomes between demographic groups when discussing success/failure with broad brush strokes but probably doesn't when comparing aristocratic-like inheritances to startup wealth.

FireBeyond 6y ago
> Elon Musk I believe also was the beneficiary of a small amount of investment from his parents. There's so much mythology around this. I've heard the argument, "he had no support from his father", and I've read in more detail that one of the examples of said lack of support was "Elon and his friends wanted to buy and operate a video game arcade when they were teenagers, but his father refused to provide financial assistance". There's a whole world between "deadbeat" and "wouldn't buy his son and his friends their own video arcade".

boringg 6y ago

What is leveraging family? Thats kind of broad. I.e. having parents who were able to afford you extra time for learning, paying for secondary education so you have no debt, exposing you to interesting people/ideas or something more Trumpian like offering up a multi million loans for free? I'd agree top 100 is too small a data set.

deleted 6y ago

[deleted]

JMTQp8lwXL 6y ago

People should read how the Forbes 400 list got started. It was extremely difficult to get off the ground. It's hard to know who has the most wealth -- it isn't public information, after all. Those who become wealthy via public markets have their ownership disclosed, so we can place a minimum value on their assets, and as a proxy, their total net worth. The changes to the list over the decades could be more a function of wealth disclosure, which are mandated by the regulatory requirements of equity markets (e.g., we can all look up Zuckerberg's percentage ownership of Facebook).