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It also disregards the type of lottery game that is a part of wealth accumulation. Of course, it is not all luck but to believe wealth accumulation is a type o

It also disregards the type of lottery game that is a part of wealth accumulation. Of course, it is not all luck but to believe wealth accumulation is a type of purely deterministic meritocratic game without a giant stochastic factor is ridiculous. That might even be the dumbest aspect of our society. Believing the powerball lottery winner is a genius for picking the numbers they picked is obviously stupid. Yet we basically have that view with everything else besides the actual lottery.

onos 4y ago
Yeah but presumably averaging over many people or situations in a study like this would reduce that noise.
- Tade0 4y ago
  But that just averages to systematic error. The same mistake has much worse consequences if you don't have wealth.
  - Qem 4y ago
    Nailed it. If you're Elon Musk, do some dumb mistake and lose 200 billion, your life barely changes. If you live on minimum wage, and loses half of it, starvation ensues for your family. The impact of losses is disproportional between rich and poor.
    - onos 4y ago
      So you’re saying the poor have much more to gain through hard work and shouldn’t be discouraged?
      - ss2003 4y ago
        You have it completely reversed. Hard work for the poor most likely means they will still be poor and therefore have very little to gain from it.
        onos 4y ago
        We certainly disagree. You do you guys.
        AussieWog93 4y ago
        This is just not true, at least in Australia (and I suspect most other first-world countries, including the US). If anything, it's easier to go from having nothing to a comfortable, middle-class lifestyle than it is to go from middle-class to wealthy.
        Qem 4y ago
        First-world is not most world. And even those places face welfare state dismantlement since at least the 80s.
        AussieWog93 4y ago
        Funnily enough, most of the people that seem to express this sentiment live in the first world and are educated. I guess people who live in the third world and have mastered English see living proof every day of where their hard work can get them.
      - pas 4y ago
        They are already pretty motivated and usually do work a lot more than middle class folks. The poor people who burn out completely and stop working end up on the street and either die pretty fast or find some more motivation to keep going even in that state. Also, sadly what many poor people lack is not work ethic but capital, in the sense that they can't just take on a ~20-30M loan to send their kids to school and wait for them to start working and then pay it back. So instead of doing this they are forced to do very near-zero ROI things.
      - Teever 4y ago
        Could you imagine saying this to a poor person with a straight face?
      - beefield 4y ago
        So you’re saying the rich have much less to gain through hard work and shouldn’t be incentivized?
        epicureanideal 4y ago
        There’s probably a lot more of a self actualization and entertainment component to it at that level.
        bawolff 4y ago
        Isn't that a given? The idle rich as a class has been a thing for a long time. Rich people do not generally work shitty dead end jobs, as a general rule.
        beefield 4y ago
        For some reason companies still agree to pay huge bonuses to their (already rich) executives to incentivize them working more/better.
      - actually_a_dog 4y ago
        Quite the opposite. While a $200M loss for Elon Musk might be nothing significant, a $200 loss for someone who is truly poor could be a huge setback. The poor have to play the game much more conservatively than the rich, which means they can’t make the big bets that have those huge upside outcomes.
      - bawolff 4y ago
        Whether or not they should be discouraged is a very different question from what they have to gain.
robertlagrant 4y ago
[flagged]
- ShamelessC 4y ago
  [flagged]
friedman23 4y ago
> It also disregards the type of lottery game that is a part of wealth accumulation. It's not a lottery game, it's a poker game (and in reality, it's much easier than poker because the economy is positive sum and poker is zero sum). If you only consider "wealthy" to be people who have made billions or hundreds of millions then it's a lottery. But someone that consistently makes decisions that maximize expected monetary gain can consistently become a "rich" person if our definition of rich is have more than $10million. (Poker is negative sum if you are playing in a raked game)
- Swizec 4y ago
  Fun fact: The average American perceives “wealthy” as having just over $2.2million in net worth. https://www.kiplinger.com/personal-finance/605075/are-you-rich https://www.kiplinger.com/personal-finance/605075/are-you-ri... This is very achievable to most HN types. Maybe not in our 30’s, but easily by retirement. Just maxing out your 401k for an entire tech career will get you there.
  - mejutoco 4y ago
    Maybe by then (one's retirement) the average American will perceive "wealthy" as having $4million in net worth. If I understand right, this is the perception right now, not in the future. Probably then it will be higher.
    - Swizec 4y ago
      That sounds likely. Inflation and all that. Would also be interesting to know if people in general even count 401k as “wealth”. I feel like it occupies a different bracket in many people’s minds.
  - jononor 4y ago
    Interesting. 2.2 million seems to be around the top 10% in the US, and around 20x the median (Federal Reserve data from 2016). It also places one in the global top 1%.
vorpalhex 4y ago
This analysis seems to disprove your theory.
angarg12 4y ago
Not accounting for luck as a factor of success is one of my pet peeves. I'm reading "So good they can't ignore you" and although I'm loving it, it's also guilty of that. Cal Newport tells the story of a Clean Tech VC and how he got the job using a personal connection to VC. But then he dismisses it by saying that "such small breaks are relatively common". Why is it so hard to admit that someone success is partially due to luck?
- sidlls 4y ago
  Because few people are objective enough to put aside their deep emotional attachment to the notion that their particular bit of hard work and skill meant nothing without that luck. I’m wealthy now: very wealthy by any standard (mid 7-figure net worth). I came from humble beginnings (nearly homeless frequently as a youth with a single mom), but I am quite intelligent (PhD in physics) and I worked hard. I would have retired with the same 401k any other white collar worker would have but for the sheer luck of choosing the right company at the right time to win an IPO lottery. I wouldn’t have got hired without the work I put in: but there’s no doubt in my mind that my wealth is the product of luck more than that work. Literally billions of people worked harder than I have in that same period of time and have nothing but poverty to show for it. But to hear my engineer peers talk you’d think luck was negligible. They simply don’t want to discount their hard work and bias toward putting much more weight on it than is merited
  - jandrewrogers 4y ago
    Many people with your net worth grind it out without any windfalls, the product of consistent hard work and reasonable choices over decades. It was always a possibility. Most people don't require an IPO to achieve that. Luck can accelerate that outcome but it is not necessary in any meaningful sense. It requires significantly greater extremes of wealth before luck plays a more frequent role. I know people well into 8-figures who were never anything more than blue-collar grinders. They worked hard and smart for decades with nothing that you could identify as being particularly lucky.
    - 4y ago
roughly 4y ago
> It also disregards the type of lottery game that is a part of wealth accumulation. The article does not disregard this - luck and family wealth are the two factors they propose as causative.
- actually_a_dog 4y ago
  In other words, luck and luck. That is, unless you know how to control what family you’re born into.
  - WalterBright 4y ago
    If you're in America, you can be a success by making the right choices. Choices like not doing drugs, for example.
    - actually_a_dog 4y ago
      Correction: if you're lucky enough to be in America.
      - WalterBright 4y ago
        Millions of people come to America. Just in my neighborhood there are Indian, Chinese, Korean, Vietnamese, Japanese, and Iranian first generation immigrants. I often hear Russian at the local park. The local real estate agent is first gen Romanian. A good friend is a Polish immigrant. I've run into three first gen Afghan immigrants nearby. The other two members of the D Foundation BoD are Romanian and Turkish. My mother was an immigrant. My sister married an immigrant. They all came to America by choice. In fact, America is a nation of immigrants. They came here to establish a country based on freedom, and took advantage of that freedom. Any country could do what America did, if their citizens chose to.
        actually_a_dog 4y ago
        Great. Now what about the other ~7.5 billion people out there? It's extremely elitist to say that anyone who wants to succeed should "just" get to America. Even if you wanted to claim that just touching the shores of the USA meant automatic success (and I am not suggesting you are), not everyone literally can do that.
dabinat 4y ago
I prefer to think society doesn’t believe this because they are innocently misguided but because those with wealth and power have an incentive to push such narratives. If people think you’re rich because you’re a genius, they’re more likely to accept that you “deserve” your wealth and success and be less likely to think it should be redistributed. It’s also a useful way of downplaying all the other factors like social status, family connections, etc.
- WalterBright 4y ago
  > those with wealth and power have an incentive to push such narratives The luck narrative is often used to justify wealth redistribution.
closeparen 4y ago
Case in point: the tech industry has generated at least as much wealth for right-place-right-time homeowners as for its elite-educated LeetCode warrior engineers.
WalterBright 4y ago
Your decisions and choices have an enormous impact on the arc of your life. Far more than luck.

onos 4y ago

Yeah but presumably averaging over many people or situations in a study like this would reduce that noise.

Tade0 4y ago
But that just averages to systematic error. The same mistake has much worse consequences if you don't have wealth.
- Qem 4y ago
  Nailed it. If you're Elon Musk, do some dumb mistake and lose 200 billion, your life barely changes. If you live on minimum wage, and loses half of it, starvation ensues for your family. The impact of losses is disproportional between rich and poor.
  - onos 4y ago
    So you’re saying the poor have much more to gain through hard work and shouldn’t be discouraged?
    - ss2003 4y ago
      You have it completely reversed. Hard work for the poor most likely means they will still be poor and therefore have very little to gain from it.
      - onos 4y ago
        We certainly disagree. You do you guys.
      - AussieWog93 4y ago
        This is just not true, at least in Australia (and I suspect most other first-world countries, including the US). If anything, it's easier to go from having nothing to a comfortable, middle-class lifestyle than it is to go from middle-class to wealthy.
        Qem 4y ago
        First-world is not most world. And even those places face welfare state dismantlement since at least the 80s.
        AussieWog93 4y ago
        Funnily enough, most of the people that seem to express this sentiment live in the first world and are educated. I guess people who live in the third world and have mastered English see living proof every day of where their hard work can get them.
    - pas 4y ago
      They are already pretty motivated and usually do work a lot more than middle class folks. The poor people who burn out completely and stop working end up on the street and either die pretty fast or find some more motivation to keep going even in that state. Also, sadly what many poor people lack is not work ethic but capital, in the sense that they can't just take on a ~20-30M loan to send their kids to school and wait for them to start working and then pay it back. So instead of doing this they are forced to do very near-zero ROI things.
    - Teever 4y ago
      Could you imagine saying this to a poor person with a straight face?
    - beefield 4y ago
      So you’re saying the rich have much less to gain through hard work and shouldn’t be incentivized?
      - epicureanideal 4y ago
        There’s probably a lot more of a self actualization and entertainment component to it at that level.
      - bawolff 4y ago
        Isn't that a given? The idle rich as a class has been a thing for a long time. Rich people do not generally work shitty dead end jobs, as a general rule.
        beefield 4y ago
        For some reason companies still agree to pay huge bonuses to their (already rich) executives to incentivize them working more/better.
    - actually_a_dog 4y ago
      Quite the opposite. While a $200M loss for Elon Musk might be nothing significant, a $200 loss for someone who is truly poor could be a huge setback. The poor have to play the game much more conservatively than the rich, which means they can’t make the big bets that have those huge upside outcomes.
    - bawolff 4y ago
      Whether or not they should be discouraged is a very different question from what they have to gain.

robertlagrant 4y ago

[flagged]

ShamelessC 4y ago
[flagged]

friedman23 4y ago

> It also disregards the type of lottery game that is a part of wealth accumulation. It's not a lottery game, it's a poker game (and in reality, it's much easier than poker because the economy is positive sum and poker is zero sum). If you only consider "wealthy" to be people who have made billions or hundreds of millions then it's a lottery. But someone that consistently makes decisions that maximize expected monetary gain can consistently become a "rich" person if our definition of rich is have more than $10million. (Poker is negative sum if you are playing in a raked game)

Swizec 4y ago
Fun fact: The average American perceives “wealthy” as having just over $2.2million in net worth. https://www.kiplinger.com/personal-finance/605075/are-you-rich https://www.kiplinger.com/personal-finance/605075/are-you-ri... This is very achievable to most HN types. Maybe not in our 30’s, but easily by retirement. Just maxing out your 401k for an entire tech career will get you there.
- mejutoco 4y ago
  Maybe by then (one's retirement) the average American will perceive "wealthy" as having $4million in net worth. If I understand right, this is the perception right now, not in the future. Probably then it will be higher.
  - Swizec 4y ago
    That sounds likely. Inflation and all that. Would also be interesting to know if people in general even count 401k as “wealth”. I feel like it occupies a different bracket in many people’s minds.
- jononor 4y ago
  Interesting. 2.2 million seems to be around the top 10% in the US, and around 20x the median (Federal Reserve data from 2016). It also places one in the global top 1%.

vorpalhex 4y ago

This analysis seems to disprove your theory.

angarg12 4y ago

Not accounting for luck as a factor of success is one of my pet peeves. I'm reading "So good they can't ignore you" and although I'm loving it, it's also guilty of that. Cal Newport tells the story of a Clean Tech VC and how he got the job using a personal connection to VC. But then he dismisses it by saying that "such small breaks are relatively common". Why is it so hard to admit that someone success is partially due to luck?

sidlls 4y ago
Because few people are objective enough to put aside their deep emotional attachment to the notion that their particular bit of hard work and skill meant nothing without that luck. I’m wealthy now: very wealthy by any standard (mid 7-figure net worth). I came from humble beginnings (nearly homeless frequently as a youth with a single mom), but I am quite intelligent (PhD in physics) and I worked hard. I would have retired with the same 401k any other white collar worker would have but for the sheer luck of choosing the right company at the right time to win an IPO lottery. I wouldn’t have got hired without the work I put in: but there’s no doubt in my mind that my wealth is the product of luck more than that work. Literally billions of people worked harder than I have in that same period of time and have nothing but poverty to show for it. But to hear my engineer peers talk you’d think luck was negligible. They simply don’t want to discount their hard work and bias toward putting much more weight on it than is merited
- jandrewrogers 4y ago
  Many people with your net worth grind it out without any windfalls, the product of consistent hard work and reasonable choices over decades. It was always a possibility. Most people don't require an IPO to achieve that. Luck can accelerate that outcome but it is not necessary in any meaningful sense. It requires significantly greater extremes of wealth before luck plays a more frequent role. I know people well into 8-figures who were never anything more than blue-collar grinders. They worked hard and smart for decades with nothing that you could identify as being particularly lucky.
  - 4y ago

roughly 4y ago

> It also disregards the type of lottery game that is a part of wealth accumulation. The article does not disregard this - luck and family wealth are the two factors they propose as causative.

actually_a_dog 4y ago
In other words, luck and luck. That is, unless you know how to control what family you’re born into.
- WalterBright 4y ago
  If you're in America, you can be a success by making the right choices. Choices like not doing drugs, for example.
  - actually_a_dog 4y ago
    Correction: if you're lucky enough to be in America.
    - WalterBright 4y ago
      Millions of people come to America. Just in my neighborhood there are Indian, Chinese, Korean, Vietnamese, Japanese, and Iranian first generation immigrants. I often hear Russian at the local park. The local real estate agent is first gen Romanian. A good friend is a Polish immigrant. I've run into three first gen Afghan immigrants nearby. The other two members of the D Foundation BoD are Romanian and Turkish. My mother was an immigrant. My sister married an immigrant. They all came to America by choice. In fact, America is a nation of immigrants. They came here to establish a country based on freedom, and took advantage of that freedom. Any country could do what America did, if their citizens chose to.
      - actually_a_dog 4y ago
        Great. Now what about the other ~7.5 billion people out there? It's extremely elitist to say that anyone who wants to succeed should "just" get to America. Even if you wanted to claim that just touching the shores of the USA meant automatic success (and I am not suggesting you are), not everyone literally can do that.

dabinat 4y ago

I prefer to think society doesn’t believe this because they are innocently misguided but because those with wealth and power have an incentive to push such narratives. If people think you’re rich because you’re a genius, they’re more likely to accept that you “deserve” your wealth and success and be less likely to think it should be redistributed. It’s also a useful way of downplaying all the other factors like social status, family connections, etc.

WalterBright 4y ago
> those with wealth and power have an incentive to push such narratives The luck narrative is often used to justify wealth redistribution.

closeparen 4y ago

Case in point: the tech industry has generated at least as much wealth for right-place-right-time homeowners as for its elite-educated LeetCode warrior engineers.

WalterBright 4y ago

Your decisions and choices have an enormous impact on the arc of your life. Far more than luck.