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This is really about how to get upper-middle class wealth. The psychology of these millionaires is very different from the mentality of big startup founders --

This is really about how to get upper-middle class wealth. The psychology of these millionaires is very different from the mentality of big startup founders -- sure, half run businesses, but these are lifestyle-type companies with no ability to scale.

JoelSutherland 18y ago
http://en.wikipedia.org/wiki/Upper_middle_class#Income http://en.wikipedia.org/wiki/Upper_middle_class#Income 10 Million households have $1 million+. There are an estimated 111,162,259 households in the US... This is upper class wealth...just not completely elite levels of wealth. I think the point of the article is that people with upper class levels of wealth tend to have upper-middle class lifestyles.
- ambition 18y ago
  This is really an argument of semantics of "upper-middle-class" vs. "upper-class." Maybe there's standard definition I don't know about. My personal definition is that upper class is "don't need to work ever again." You're right that upper middle class people have the same lifestyles as upper class. The difference isn't in material goods, it's in freedom.
  - JoelSutherland 18y ago
    But not having to work again is tied directly to consumption along with income. The interesting component of the article was that the average income of somebody with $1 million of net worth was approaching $400,000. This implies a poor savings rate and not very much savings at all. If freedom is the goal, it seems the key component is a modest lifestyle.
- gaius 18y ago
  Upper class is second-generation. To be truly upper class you'd have had to have gone to an elite boarding school, for example, and bonded socially with the rest of the upper class. Self-made people can never be more than upper-middle regardless of how much cash they have.
lsemel 18y ago
Just because a business isn't suited for investment by VCs doesn't mean it's not a great investment for its owners nor that they necessarily possess lesser business ability or some kind of inferior mentality.
- netcan 18y ago
  Nor does it mean that they can't scale.
  - ambition 18y ago
    Actually, it does. If they had businesses that scaled, they'd be well above the million-dollar mark and in the even-tinier minority. But I'll go one further and suggest there's a causal link in play here: The half that are business owners are people who make their money precisely in businesses that don't scale. They own and operate local businesses which are natural geographic monopolies and they don't get crushed by large multinational competitors because of that fact. For example, these are businesses like landscaping companies, local shops, construction contractors, and services businesses. Also note that a chunk of the 50% that don't own businesses are well-paid, sometimes independent professionals such as doctors, lawyers, architects and engineers. Again, their source of income does not scale, so they get rich by cutting costs.
- ambition 18y ago
  I didn't intend to imply anything about inferiority. The people described here have a different mentality. They get rich by avoiding risks and cutting costs. It is a slow and systematic process with guaranteed results. Startup people get rich by taking big risks and working hard to increase their top-line productivity and wealth-creation. It is relatively fast and chaotic process with unpredictable results.
  - huherto 18y ago
    At the same time startup people have to cut their costs to the minimum.

JoelSutherland 18y ago

http://en.wikipedia.org/wiki/Upper_middle_class#Income http://en.wikipedia.org/wiki/Upper_middle_class#Income 10 Million households have $1 million+. There are an estimated 111,162,259 households in the US... This is upper class wealth...just not completely elite levels of wealth. I think the point of the article is that people with upper class levels of wealth tend to have upper-middle class lifestyles.

ambition 18y ago
This is really an argument of semantics of "upper-middle-class" vs. "upper-class." Maybe there's standard definition I don't know about. My personal definition is that upper class is "don't need to work ever again." You're right that upper middle class people have the same lifestyles as upper class. The difference isn't in material goods, it's in freedom.
- JoelSutherland 18y ago
  But not having to work again is tied directly to consumption along with income. The interesting component of the article was that the average income of somebody with $1 million of net worth was approaching $400,000. This implies a poor savings rate and not very much savings at all. If freedom is the goal, it seems the key component is a modest lifestyle.
gaius 18y ago
Upper class is second-generation. To be truly upper class you'd have had to have gone to an elite boarding school, for example, and bonded socially with the rest of the upper class. Self-made people can never be more than upper-middle regardless of how much cash they have.

lsemel 18y ago

Just because a business isn't suited for investment by VCs doesn't mean it's not a great investment for its owners nor that they necessarily possess lesser business ability or some kind of inferior mentality.

netcan 18y ago
Nor does it mean that they can't scale.
- ambition 18y ago
  Actually, it does. If they had businesses that scaled, they'd be well above the million-dollar mark and in the even-tinier minority. But I'll go one further and suggest there's a causal link in play here: The half that are business owners are people who make their money precisely in businesses that don't scale. They own and operate local businesses which are natural geographic monopolies and they don't get crushed by large multinational competitors because of that fact. For example, these are businesses like landscaping companies, local shops, construction contractors, and services businesses. Also note that a chunk of the 50% that don't own businesses are well-paid, sometimes independent professionals such as doctors, lawyers, architects and engineers. Again, their source of income does not scale, so they get rich by cutting costs.
ambition 18y ago
I didn't intend to imply anything about inferiority. The people described here have a different mentality. They get rich by avoiding risks and cutting costs. It is a slow and systematic process with guaranteed results. Startup people get rich by taking big risks and working hard to increase their top-line productivity and wealth-creation. It is relatively fast and chaotic process with unpredictable results.
- huherto 18y ago
  At the same time startup people have to cut their costs to the minimum.