4 ms·

Is compounding interest why Jeff Bezos is rich? Or is it because you get three Amazon deliveries a day?

by rayiner 9mo ago

kg 9mo ago
This reply has very strong "the average human does not eat 10 spiders a day; the average was thrown off by Spiders Georg who eats 10000 spiders a day" energy. Amazon does not have an exceedingly high profit margin, and my understanding is that a lot of it comes from stuff like AWS, not Amazon deliveries - correct me if I'm wrong here. So I'm not sure that "three amazon deliveries a day" - if this is even common - is why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly. Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed?
- lotsofpulp 9mo ago
  > Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed? The answer depends on how should the losses from unsuccessful entrepreneurship be distributed?
  - jacquesm 9mo ago
    Oh that's an easy one: that's societies' problem. Always has been. The same with pollution and all of the other stuff that can be externalized.
    - lotsofpulp 9mo ago
      Can you be more specific? Suppose I put $1M into developing a business. For whatever reason, construction hits a snag or revenues are not enough to cover expenses, how would it become “society’s” problem? Do I get made whole by the government giving me $1M, and the government takes posession of the property? If so, I foresee a lot more opportunities for corruption.
      - jacquesm 9mo ago
        https://en.wikipedia.org/wiki/Externality#Negative https://en.wikipedia.org/wiki/Externality#Negative
      - ceejayoz 9mo ago
        > For whatever reason, construction hits a snag or revenues are not enough to cover expenses, how would it become “society’s” problem? You declare bankruptcy. Your vendors who extended credit get hosed. Your employees go on unemployment benefits. Each of these costs money, and each of these reduces taxable income.
        lotsofpulp 9mo ago
        Those are not socialized losses. The aforementioned suggestions are a great way to kill any incentive to take risks and start a new business with one’s savings, further tilting the playing field to SP500 dominance.
- rayiner 9mo ago
  > why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly. Jeff Bezos owns 9% of Amazon. So 9% of the expected value of the money going "into Amazon's coffers" indefinitely into the future is counted as part of his current "wealth." It's not money under his mattress. Is your argument that people shouldn't be allowed to own 9% of a company that they started?
  - lores 9mo ago
    People should not be allowed to accumulate capital beyond $X, yes. What natural law means they should? Society created the conditions for that person to be so successful; in fact, the person only had the minor part in that success. Once you reach $X, you get a certificate saying you won at life and society is really grateful, and society gets the rest of the rewards while they dedicate their life to philanthropy or torturing kittens or whatever it is they do as a hobby.
    - rayiner 9mo ago
      > People should not be allowed to accumulate capital beyond $X, yes. The term "capital" is an abstraction that's not helpful here. The big "wealth" numbers are all about equity ownership in highly valued companies. Bezos owns 9% of Amazon stock. That's why he's "rich." What should happen to that stock? What happens to his voting control over Amazon?
      - fragmede 9mo ago
        The problem is people that rich don't own anything. It's all shell corporations and LLCs and money borrowed against those shares (so no need to pay any taxes). But they clearly have access to yacht money. We're not going to write an airtight law in the comments section. We can just ignore paper wealth and ownership stakes for the purposes of wealth redistribution. The question boils down to a feeling that when the revolution comes, that no one person needs more than, say, $100 million for themselves, or not. Trying to distract the conversation into defining "for themselves" will only prolong your time before the firing squad, comrad.
jacquesm 9mo ago
No, he's rich because (1) he had first mover advantage (credit to him) (2) he has a good sense of how to run a business (3) he exploits a large number of people to his own benefit.
- dangus 9mo ago
  Don’t forget the giant investment from his parents. Lots of people with great ideas, skills, and work ethic don’t have $250,000 lying around to invest.
  - jacquesm 9mo ago
    Yes, that's a good point.
  - rayiner 9mo ago
    His parents invested about $500,000 in today's money in their 50s. At that age, 10% of Americans have a financial net worth (excluding home equity) of over $2 million. People in America invest that kind of money in small businesses all the time. That’s on the low end of what it costs to open a Dunkin Donuts, and half of what it costs to open a McDonalds. The kids of the Indian guy who owns the Dunkin’ Donuts down the street aren’t exactly scions of wealth. And Bezos's biological dad was a unicyclist, his mom got pregnant with him at 16 and later dropped out of college, and his stepdad was a Cuban refugee who got an education and became an engineer for Exxon. Going from zero to billionaire in two generations actually says something remarkable about our system. Think about it another way. If the government doled out $500k to fund business ideas, do you think that investment would be available to kids of refugees? Of course not. There would be gatekeeping behind credentials and connections, and it would be open to a lot less than 10% of the population. [1] In terms of birth lottery, having top 10% parents is like being born smart enough to get a 1290 on the SAT or having a 120 IQ. Not exactly rarified aid! https://research.collegeboard.org/reports/sat-suite/understanding-scores/sat https://research.collegeboard.org/reports/sat-suite/understa...
    - pinnochio 9mo ago
      > Going from zero to billionaire in two generations actually says something remarkable about our system. It does? I mean, sure, it's better than having only the already rich stay rich, but let's not kid ourselves that this is a life outcome that everybody, or even 10% or 1% of the US can shoot for. The vast majority of people stay closer to zero. Who gives a shit that a few people get to win the right-time-right-place lottery?
Starman_Jones 9mo ago
Why are people getting three deliveries a day from a company that was founded as a bookseller? How many books do they need?
- crop_rotation 9mo ago
  This is like asking why are people buying so much stuff from a company that was founded as compiler/language tool seller. How much compiler do they need. The above would be Microsoft for context. For some reason your comment assumes that what a company was "founded as" should dictate what they do decades later.
  - Starman_Jones 9mo ago
    I think you've just explained how compounding wealth made Jeff Bezos rich.

Is compounding interest why Jeff Bezos is rich? Or is it because you get three Amazon deliveries a day?

by rayiner 9mo ago

Is compounding interest why Jeff Bezos is rich? Or is it because you get three Amazon deliveries a day?

kg 9mo ago

This reply has very strong "the average human does not eat 10 spiders a day; the average was thrown off by Spiders Georg who eats 10000 spiders a day" energy. Amazon does not have an exceedingly high profit margin, and my understanding is that a lot of it comes from stuff like AWS, not Amazon deliveries - correct me if I'm wrong here. So I'm not sure that "three amazon deliveries a day" - if this is even common - is why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly. Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed?

lotsofpulp 9mo ago
> Another way to look at this: Even if Amazon is wildly successful, does that mean Jeff Bezos specifically should become filthy rich as a result, instead of all its employees and investors? How should the gains from successful entrepreneurship be distributed? The answer depends on how should the losses from unsuccessful entrepreneurship be distributed?
- jacquesm 9mo ago
  Oh that's an easy one: that's societies' problem. Always has been. The same with pollution and all of the other stuff that can be externalized.
  - lotsofpulp 9mo ago
    Can you be more specific? Suppose I put $1M into developing a business. For whatever reason, construction hits a snag or revenues are not enough to cover expenses, how would it become “society’s” problem? Do I get made whole by the government giving me $1M, and the government takes posession of the property? If so, I foresee a lot more opportunities for corruption.
    - jacquesm 9mo ago
      https://en.wikipedia.org/wiki/Externality#Negative https://en.wikipedia.org/wiki/Externality#Negative
    - ceejayoz 9mo ago
      > For whatever reason, construction hits a snag or revenues are not enough to cover expenses, how would it become “society’s” problem? You declare bankruptcy. Your vendors who extended credit get hosed. Your employees go on unemployment benefits. Each of these costs money, and each of these reduces taxable income.
      - lotsofpulp 9mo ago
        Those are not socialized losses. The aforementioned suggestions are a great way to kill any incentive to take risks and start a new business with one’s savings, further tilting the playing field to SP500 dominance.
rayiner 9mo ago
> why that man is personally rich. Even if it were a big source of revenue, that would go into Amazon's coffers, not necessarily his directly. Jeff Bezos owns 9% of Amazon. So 9% of the expected value of the money going "into Amazon's coffers" indefinitely into the future is counted as part of his current "wealth." It's not money under his mattress. Is your argument that people shouldn't be allowed to own 9% of a company that they started?
- lores 9mo ago
  People should not be allowed to accumulate capital beyond $X, yes. What natural law means they should? Society created the conditions for that person to be so successful; in fact, the person only had the minor part in that success. Once you reach $X, you get a certificate saying you won at life and society is really grateful, and society gets the rest of the rewards while they dedicate their life to philanthropy or torturing kittens or whatever it is they do as a hobby.
  - rayiner 9mo ago
    > People should not be allowed to accumulate capital beyond $X, yes. The term "capital" is an abstraction that's not helpful here. The big "wealth" numbers are all about equity ownership in highly valued companies. Bezos owns 9% of Amazon stock. That's why he's "rich." What should happen to that stock? What happens to his voting control over Amazon?
    - fragmede 9mo ago
      The problem is people that rich don't own anything. It's all shell corporations and LLCs and money borrowed against those shares (so no need to pay any taxes). But they clearly have access to yacht money. We're not going to write an airtight law in the comments section. We can just ignore paper wealth and ownership stakes for the purposes of wealth redistribution. The question boils down to a feeling that when the revolution comes, that no one person needs more than, say, $100 million for themselves, or not. Trying to distract the conversation into defining "for themselves" will only prolong your time before the firing squad, comrad.

jacquesm 9mo ago

No, he's rich because (1) he had first mover advantage (credit to him) (2) he has a good sense of how to run a business (3) he exploits a large number of people to his own benefit.

dangus 9mo ago
Don’t forget the giant investment from his parents. Lots of people with great ideas, skills, and work ethic don’t have $250,000 lying around to invest.
- jacquesm 9mo ago
  Yes, that's a good point.
- rayiner 9mo ago
  His parents invested about $500,000 in today's money in their 50s. At that age, 10% of Americans have a financial net worth (excluding home equity) of over $2 million. People in America invest that kind of money in small businesses all the time. That’s on the low end of what it costs to open a Dunkin Donuts, and half of what it costs to open a McDonalds. The kids of the Indian guy who owns the Dunkin’ Donuts down the street aren’t exactly scions of wealth. And Bezos's biological dad was a unicyclist, his mom got pregnant with him at 16 and later dropped out of college, and his stepdad was a Cuban refugee who got an education and became an engineer for Exxon. Going from zero to billionaire in two generations actually says something remarkable about our system. Think about it another way. If the government doled out $500k to fund business ideas, do you think that investment would be available to kids of refugees? Of course not. There would be gatekeeping behind credentials and connections, and it would be open to a lot less than 10% of the population. [1] In terms of birth lottery, having top 10% parents is like being born smart enough to get a 1290 on the SAT or having a 120 IQ. Not exactly rarified aid! https://research.collegeboard.org/reports/sat-suite/understanding-scores/sat https://research.collegeboard.org/reports/sat-suite/understa...
  - pinnochio 9mo ago
    > Going from zero to billionaire in two generations actually says something remarkable about our system. It does? I mean, sure, it's better than having only the already rich stay rich, but let's not kid ourselves that this is a life outcome that everybody, or even 10% or 1% of the US can shoot for. The vast majority of people stay closer to zero. Who gives a shit that a few people get to win the right-time-right-place lottery?

Starman_Jones 9mo ago

Why are people getting three deliveries a day from a company that was founded as a bookseller? How many books do they need?

crop_rotation 9mo ago
This is like asking why are people buying so much stuff from a company that was founded as compiler/language tool seller. How much compiler do they need. The above would be Microsoft for context. For some reason your comment assumes that what a company was "founded as" should dictate what they do decades later.
- Starman_Jones 9mo ago
  I think you've just explained how compounding wealth made Jeff Bezos rich.