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this 'people are rich because they are smart' is not a take i expected to find on HN. Its not quite as damaging as 'people are rich because they work harder' b

this 'people are rich because they are smart' is not a take i expected to find on HN. Its not quite as damaging as 'people are rich because they work harder' but its really not far off

tristor 4y ago
Okay, rather than being pithy, perhaps you could explain succinctly why people are rich, then? Or perhaps you can admit that in many cases people have achieved moderate to high wealth in democratic free market societies by either working harder or worker smarter than their peers?
- thesuitonym 4y ago
  People are mostly rich because their parents were rich. Rich people do not come from poverty. Why is that? Do you think it's because impoverished people are not smart?
  - philwelch 4y ago
    Sometimes rich people do come from poverty. Sometimes middle class people come from poverty and rich people come from the middle class. And sometimes rich heirs and heiresses go bankrupt and fade into obscurity. Why does this happen? Because the people who improve their position are either intelligent or diligent and the people who decline in position are either stupid or lazy. To whatever degree these traits are genetic, you’d expect them to get roughly sorted out to the point where social mobility would decline, but it wouldn’t disappear entirely.
    - jimnotgym 4y ago
      > Because the people who improve their position are either intelligent or diligent Or corrupt, or given a leg up through connections of ones father or school. > and the people who decline in position are either stupid or lazy. Or unlucky. Or got ill. Your ideas sound very Victorian to me. I have noticed that most people who did get rich assume it is something special about themselves that did it, I'm guessing you are one of them.
      - philwelch 4y ago
        Jokes on you, I’m not even rich. I’m talking about broad population-level averages. Maybe you define “luck” as an actual quantifiable trait that measures whether or not you’re blessed by God, but I define luck as a completely random variable that produces noise in the individual case but does not affect population-wide averages.
- jimnotgym 4y ago
  One big reason people get rich is because their parents were rich. Rich parents pay for a better education for their children. This gives them access to the best jobs, and most valuable of all a network of people to give them a leg up. This also gives them better access to capital. It is also much easier to try your business idea if failure means moving back into Daddies pool-house, rather than complete ruin. I have worked with a lot of 'entreprenuers' and they are overwhelmingly from rich backgrounds. 'Started it with a small loan from my father of 1m' is a quote I heard more than once. Another reason is luck. My father worked from nothing to owning a house in a nice place because he had a skill that was in demand. He nearly lost it all and is now scraping a living in his 70's, because technology made his skill less valuable. 10 more years of luck he would have retired at 50 and I would have had the advantages... Someone, mentioned that rich people were better looking. Perhaps they are just healthier, better dressed, and better groomed?
  - tristor 4y ago
    Without causing this to become an argument of semantics, generally speaking, the US has higher class mobility than the rest of the world. No, it is not commonplace for someone born in abject poverty to become fabulously wealthy, it's not commonplace for anyone to become fabulously wealthy. That said, it is rather common for folks to come to the US in pretty close to abject poverty and grow to sustain a middle class lifestyle, something which is nearly impossible in most of the rest of the world. Is someone with a middle class lifestyle in the US "rich"? I guess it depends on your outlook, and this is where semantics plays a part. Mobility is not entirely caused by intelligence or hard work, but they definitely play a part. You are correct that the best way to become rich is to be born into a rich family and inherit the wealth (or the opportunities that create wealth). But it is simply false to state that this is the only way, or even the predominate way, in which people become rich in democratic free markets. There are a LOT of small business owners in the US that, are at least on paper, millionaires, and most of these people were not born into rich families. Through my life I've known many wealthy people, and only a handful were born into generational wealth, the majority grew their wealth during economic booms and worked to entrench it so they could survive busts, most by starting a small business in a high-value niche. By global and national standards, many people who are simply professionals and not even business owners, are rich or wealthy, just by being smart with their money. If you own a home and are working a job that pays six figures for your entire career and invest well, you will retire a millionaire without much difficulty, which definitely puts you in the upper quintile in the US. This fatalistic, defeatist, and frankly infantile attitude from some people that acts as if wealth is only ever granted by random chance and at birth is utterly ridiculous, doesn't help anyone, and is factually incorrect from every angle. Your comment clearly illustrates an understanding of this, but you seem bent on defending the thrust of the comment I was replying to from the other poster.
- ZeroGravitas 4y ago
  'Luck' seems to cover most of it. Even in your example, how did they get themselves born into a democratic free market society? Luck. Some people really dont like that answer, since it makes them feel vulnerable. They'd rather blame a victim, and worship a lottery winner than accept that some things are outside their control.
  - philwelch 4y ago
    > Even in your example, how did they get themselves born into a democratic free market society? Luck. Sure. Your genetics are also luck. But both genetics and being born in a liberal democracy are identifiable variables that have non-random outcomes.
s1artibartfast 4y ago
There is some value to the averages, if not the absolute.
philwelch 4y ago
Being smart and working hard will both make most people richer than being stupid and lazy. There’s a share of luck, but that washes out in the population-wide statistical analysis. Plus, if you’re stupid and lazy but you max out on luck and win the Powerball, the odds are surprisingly high that you will eventually go bankrupt, and if you don’t, your children will. So even if you are lucky, you need to be smart and diligent enough not to fuck it up.
- KerrAvon 4y ago
  Except that most rich people come from inherited wealth. Elon Musk is an emerald mine scion, for example. Sometimes it’s intelligence, but mostly it’s not.
  - philwelch 4y ago
    Elon Musk didn’t actually inherit any wealth; he emigrated to America essentially broke and didn’t get rich until PayPal. Also, his father is still alive, so any inheritance hasn’t even happened yet. Setting that aside, how does being the son of a guy who owned an emerald mine in South Africa explain him being richer than the descendants of Henry Ford or John D. Rockefeller? How do explain the children of all the other emerald mine owners?
    - david927 4y ago
      He went to a fancy private boarding school as a boy and his family had connections. > how does being the son of a guy who owned an emerald mine in South Africa explain him being richer That's faulty, a posteriori reasoning.
      - philwelch 4y ago
        What I am doing is falsifying your hypothesis. If being born to rich parents, having connections, and going to boarding schools is the sole reason people get rich, then we would expect that people with richer parents and more connections who went to better boarding schools than Elon Musk would be richer, and people who grew up in similar conditions to Elon Musk would be equally rich. This is not true.
KerrAvon 4y ago
You must not read political stories on HN. We have both kinds of music: entitled old white dude takes and entitled young trust fundie takes. I’m exaggerating, but anecdotally HN does have this reputation.
ColanR 4y ago
To me it falls in a similar category as how highly intelligent people are less likely to be overweight. I think that with intelligence comes a better sense of how to control oneself. Ever seen the stats on how often lottery winners end up going broke? Not that many people have the capacity and knowledge to control their emotions with their reason. Being wealthy is not a question of making money, it's a question of keeping it.
- jimnotgym 4y ago
  This is all much easier if you grow up wealthy. If you start life with a trust fund and people around you who know how to manage wealth, you have a huge advantage
  - philwelch 4y ago
    Sometimes you develop a crippling drug addiction and go bankrupt.
    - jimnotgym 4y ago
      I personally don't no. I have been ill, I have had to give up on a career in an industry that died and retrain. I have been subject to a very costly legal challenge that was not even close to being of my own making. I am moderately intelligent, but luck didn't care. Luck can be a bastard like that
      - philwelch 4y ago
        I’m sorry to hear that, and I’m agree it isn’t your fault or the result of some personal flaw on your part that you’re not personally rich. What I’m saying is that on a larger statistical level, when we are talking about entire populations, those random factors still exist but nonrandom factors also exist, and the nonrandom ones are the ones that show up in aggregate once you have enough of a sample size.
  - nugget 4y ago
    Many children of the UHNW families I know are raised by a rotating cast of nannies and emotionally neglected by their parents. It's heartbreaking to watch the psychological damage being done. Given a choice for my embryonic self I'd choose an upper middle class couple with high degrees of empathy, one mostly stay at home parent and an obsessive focus on curiosity, knowledge, and self-education.
_greim_ 4y ago
> Hard working and intelligent people are more likely to get rich. > Most rich people are rich because they were born into it. Both of these can be true at the same time!
mywittyname 4y ago
Intelligence is inheritable. Intelligence is correlated with educational attainment and wealth. People tend to marry within their socio-economic group. Wealthy people who came from nothing are the exception. Even in places with high degrees of social mobility, climbing the social ladder is a multi-generational saga. Maybe a working class family has a child or two who enter the professional class, then maybe their child has the opportunity for their family to finance a company that goes big, like Dell or Microsoft, or maybe break in as an actor or sports figure. Most likely though, their kids also enter the professional class where the family rolls the dice again the next generation.
- gitgud 4y ago
  > Intelligence is inheritable. Intelligence is correlated with educational attainment and wealth. Wealth is also correlated with inheriting money...
- lamontcg 4y ago
  > Intelligence is inheritable. inheritable traits like intelligence tend to revert to the mean.
  - Noumenon72 4y ago
    This is because intelligence is not all inherited, so those above the mean owe some of their intelligence to luck. Children do not inherit their parents' luck, so they revert to the mean _compared to their parents_. The children retain their inherited advantage over people who didn't get the good genes.
laverya 4y ago
Let's work at this from reverse. OF COURSE smart people are more likely than average to become rich! How could it be otherwise, unless the only way to become rich was luck? Now, some people are born rich! But even if it's just the self-made rich that are smarter than average, and people born rich are exactly average (unlikely as intelligence/attractiveness/etc are at least partly inheritable), that means that rich people are ALSO smarter than average. ('above average' averaged with 'exactly average' is still 'above average')

this 'people are rich because they are smart' is not a take i expected to find on HN. Its not quite as damaging as 'people are rich because they work harder' but its really not far off

tristor 4y ago

Okay, rather than being pithy, perhaps you could explain succinctly why people are rich, then? Or perhaps you can admit that in many cases people have achieved moderate to high wealth in democratic free market societies by either working harder or worker smarter than their peers?

thesuitonym 4y ago
People are mostly rich because their parents were rich. Rich people do not come from poverty. Why is that? Do you think it's because impoverished people are not smart?
- philwelch 4y ago
  Sometimes rich people do come from poverty. Sometimes middle class people come from poverty and rich people come from the middle class. And sometimes rich heirs and heiresses go bankrupt and fade into obscurity. Why does this happen? Because the people who improve their position are either intelligent or diligent and the people who decline in position are either stupid or lazy. To whatever degree these traits are genetic, you’d expect them to get roughly sorted out to the point where social mobility would decline, but it wouldn’t disappear entirely.
  - jimnotgym 4y ago
    > Because the people who improve their position are either intelligent or diligent Or corrupt, or given a leg up through connections of ones father or school. > and the people who decline in position are either stupid or lazy. Or unlucky. Or got ill. Your ideas sound very Victorian to me. I have noticed that most people who did get rich assume it is something special about themselves that did it, I'm guessing you are one of them.
    - philwelch 4y ago
      Jokes on you, I’m not even rich. I’m talking about broad population-level averages. Maybe you define “luck” as an actual quantifiable trait that measures whether or not you’re blessed by God, but I define luck as a completely random variable that produces noise in the individual case but does not affect population-wide averages.
jimnotgym 4y ago
One big reason people get rich is because their parents were rich. Rich parents pay for a better education for their children. This gives them access to the best jobs, and most valuable of all a network of people to give them a leg up. This also gives them better access to capital. It is also much easier to try your business idea if failure means moving back into Daddies pool-house, rather than complete ruin. I have worked with a lot of 'entreprenuers' and they are overwhelmingly from rich backgrounds. 'Started it with a small loan from my father of 1m' is a quote I heard more than once. Another reason is luck. My father worked from nothing to owning a house in a nice place because he had a skill that was in demand. He nearly lost it all and is now scraping a living in his 70's, because technology made his skill less valuable. 10 more years of luck he would have retired at 50 and I would have had the advantages... Someone, mentioned that rich people were better looking. Perhaps they are just healthier, better dressed, and better groomed?
- tristor 4y ago
  Without causing this to become an argument of semantics, generally speaking, the US has higher class mobility than the rest of the world. No, it is not commonplace for someone born in abject poverty to become fabulously wealthy, it's not commonplace for anyone to become fabulously wealthy. That said, it is rather common for folks to come to the US in pretty close to abject poverty and grow to sustain a middle class lifestyle, something which is nearly impossible in most of the rest of the world. Is someone with a middle class lifestyle in the US "rich"? I guess it depends on your outlook, and this is where semantics plays a part. Mobility is not entirely caused by intelligence or hard work, but they definitely play a part. You are correct that the best way to become rich is to be born into a rich family and inherit the wealth (or the opportunities that create wealth). But it is simply false to state that this is the only way, or even the predominate way, in which people become rich in democratic free markets. There are a LOT of small business owners in the US that, are at least on paper, millionaires, and most of these people were not born into rich families. Through my life I've known many wealthy people, and only a handful were born into generational wealth, the majority grew their wealth during economic booms and worked to entrench it so they could survive busts, most by starting a small business in a high-value niche. By global and national standards, many people who are simply professionals and not even business owners, are rich or wealthy, just by being smart with their money. If you own a home and are working a job that pays six figures for your entire career and invest well, you will retire a millionaire without much difficulty, which definitely puts you in the upper quintile in the US. This fatalistic, defeatist, and frankly infantile attitude from some people that acts as if wealth is only ever granted by random chance and at birth is utterly ridiculous, doesn't help anyone, and is factually incorrect from every angle. Your comment clearly illustrates an understanding of this, but you seem bent on defending the thrust of the comment I was replying to from the other poster.
ZeroGravitas 4y ago
'Luck' seems to cover most of it. Even in your example, how did they get themselves born into a democratic free market society? Luck. Some people really dont like that answer, since it makes them feel vulnerable. They'd rather blame a victim, and worship a lottery winner than accept that some things are outside their control.
- philwelch 4y ago
  > Even in your example, how did they get themselves born into a democratic free market society? Luck. Sure. Your genetics are also luck. But both genetics and being born in a liberal democracy are identifiable variables that have non-random outcomes.

s1artibartfast 4y ago

There is some value to the averages, if not the absolute.

philwelch 4y ago

Being smart and working hard will both make most people richer than being stupid and lazy. There’s a share of luck, but that washes out in the population-wide statistical analysis. Plus, if you’re stupid and lazy but you max out on luck and win the Powerball, the odds are surprisingly high that you will eventually go bankrupt, and if you don’t, your children will. So even if you are lucky, you need to be smart and diligent enough not to fuck it up.

KerrAvon 4y ago
Except that most rich people come from inherited wealth. Elon Musk is an emerald mine scion, for example. Sometimes it’s intelligence, but mostly it’s not.
- philwelch 4y ago
  Elon Musk didn’t actually inherit any wealth; he emigrated to America essentially broke and didn’t get rich until PayPal. Also, his father is still alive, so any inheritance hasn’t even happened yet. Setting that aside, how does being the son of a guy who owned an emerald mine in South Africa explain him being richer than the descendants of Henry Ford or John D. Rockefeller? How do explain the children of all the other emerald mine owners?
  - david927 4y ago
    He went to a fancy private boarding school as a boy and his family had connections. > how does being the son of a guy who owned an emerald mine in South Africa explain him being richer That's faulty, a posteriori reasoning.
    - philwelch 4y ago
      What I am doing is falsifying your hypothesis. If being born to rich parents, having connections, and going to boarding schools is the sole reason people get rich, then we would expect that people with richer parents and more connections who went to better boarding schools than Elon Musk would be richer, and people who grew up in similar conditions to Elon Musk would be equally rich. This is not true.

KerrAvon 4y ago

You must not read political stories on HN. We have both kinds of music: entitled old white dude takes and entitled young trust fundie takes. I’m exaggerating, but anecdotally HN does have this reputation.

ColanR 4y ago

To me it falls in a similar category as how highly intelligent people are less likely to be overweight. I think that with intelligence comes a better sense of how to control oneself. Ever seen the stats on how often lottery winners end up going broke? Not that many people have the capacity and knowledge to control their emotions with their reason. Being wealthy is not a question of making money, it's a question of keeping it.

jimnotgym 4y ago
This is all much easier if you grow up wealthy. If you start life with a trust fund and people around you who know how to manage wealth, you have a huge advantage
- philwelch 4y ago
  Sometimes you develop a crippling drug addiction and go bankrupt.
  - jimnotgym 4y ago
    I personally don't no. I have been ill, I have had to give up on a career in an industry that died and retrain. I have been subject to a very costly legal challenge that was not even close to being of my own making. I am moderately intelligent, but luck didn't care. Luck can be a bastard like that
    - philwelch 4y ago
      I’m sorry to hear that, and I’m agree it isn’t your fault or the result of some personal flaw on your part that you’re not personally rich. What I’m saying is that on a larger statistical level, when we are talking about entire populations, those random factors still exist but nonrandom factors also exist, and the nonrandom ones are the ones that show up in aggregate once you have enough of a sample size.
- nugget 4y ago
  Many children of the UHNW families I know are raised by a rotating cast of nannies and emotionally neglected by their parents. It's heartbreaking to watch the psychological damage being done. Given a choice for my embryonic self I'd choose an upper middle class couple with high degrees of empathy, one mostly stay at home parent and an obsessive focus on curiosity, knowledge, and self-education.

_greim_ 4y ago

> Hard working and intelligent people are more likely to get rich. > Most rich people are rich because they were born into it. Both of these can be true at the same time!

mywittyname 4y ago

Intelligence is inheritable. Intelligence is correlated with educational attainment and wealth. People tend to marry within their socio-economic group. Wealthy people who came from nothing are the exception. Even in places with high degrees of social mobility, climbing the social ladder is a multi-generational saga. Maybe a working class family has a child or two who enter the professional class, then maybe their child has the opportunity for their family to finance a company that goes big, like Dell or Microsoft, or maybe break in as an actor or sports figure. Most likely though, their kids also enter the professional class where the family rolls the dice again the next generation.

gitgud 4y ago
> Intelligence is inheritable. Intelligence is correlated with educational attainment and wealth. Wealth is also correlated with inheriting money...
lamontcg 4y ago
> Intelligence is inheritable. inheritable traits like intelligence tend to revert to the mean.
- Noumenon72 4y ago
  This is because intelligence is not all inherited, so those above the mean owe some of their intelligence to luck. Children do not inherit their parents' luck, so they revert to the mean _compared to their parents_. The children retain their inherited advantage over people who didn't get the good genes.

laverya 4y ago

Let's work at this from reverse. OF COURSE smart people are more likely than average to become rich! How could it be otherwise, unless the only way to become rich was luck? Now, some people are born rich! But even if it's just the self-made rich that are smarter than average, and people born rich are exactly average (unlikely as intelligence/attractiveness/etc are at least partly inheritable), that means that rich people are ALSO smarter than average. ('above average' averaged with 'exactly average' is still 'above average')