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Straw man. Nothing is guaranteed to make you rich. Entrepreneurship certainly has vastly more potential to make you rich. And if we're not talking about being
by ellyagg 17y ago
Straw man. Nothing is guaranteed to make you rich. Entrepreneurship certainly has vastly more potential to make you rich.
And if we're not talking about being rich strictly, but are implicitly including a quality of life component, well, the information I've seen[1] implies that entrepreneurship is near the income level of other professionals and has a higher sense of well-being.
[1] http://www.gallup.com/poll/122960/business-owners-richer-job-types.aspx http://www.gallup.com/poll/122960/business-owners-richer-job...
- mrshoe 17y agoI think that's just a link bait title which the author only addresses briefly. The rest of the article is actually quite valuable.
- tptacek 17y agoMany more people become rich from careful career planning and money management than do from starting companies. The difference between the approaches isn't the potential, it's the speed and the risk.
- Devilboy 17y agoYes the #1 way people become millionaires is still via buying real estate.
- rokhayakebe 17y agoThat is very misleading. There is a difference between having a million in the bank, and having a home that is worth a million. I would choose the first.
- tptacek 17y agoI think he was implying "and selling real estate". And everyone would choose the completely liquid asset over the one that takes months to sell.
- jacquesm 17y agoI would choose the second. Real estate is fairly solid, money in the bank is money that gets worth less every day. Sure the real estate market is in the dump right now, but that doesn't mean that a home isn't a solid investment. A home may devalue a bit, it needs upkeep and so on. But it'll never 'crash'.
- andymism 17y agoI'd definitely choose 1M in cash over living and owning a home worth 1M. The home is both illiquid and necessary: when you sell your home and cash in on the million, you've still got to find a new place to live. Given that you want to live in the same city (or state, etc.) and that you probably need space for all the stuff you accumulated, your office, and that fabulous kitchen, how much do you think you'll spend for a new home then? A home is only a solid investment if you're living in it. The real value of a home is in that it gives you something you want and need: a roof over your head in a place you want to live. But if you're paying a home loan on a second home, it's an investment asset just like any other asset and is just as vulnerable to market fluctuations.
- ryanwanger 17y agoActually, the home that you're living in isn't that solid of an investment...it's more like forced savings. Generally you'll come out ahead (versus if you rented), but depending on the market, it could easily take 10+ years before it works out in your favor. If you can buy property and then have other people pay the mortgage for you, now THAT is a solid investment.
- didip 17y agoI would buy real estates. Given a million bucks, I would buy five $175,000 homes and rent all of them out. By then, I could build whatever I want without needing outside money. The best thing about this strategy? It can happen slowly and sequentially with minimal risks.
- dkersten 17y agoI don't think real estate is that safe and assured of an it'll make you rich. The Irish recession is caused primarily because the economy was held up by the real estate business. Now there are too many houses and nobody willing to buy any. As a result, the value of real estate has dropped and people with your money making plan have found themselves losing money instead.
- DTrejo 17y agoAssuming the houses are in a desirable area, it's hard to do badly over the long-term.* *possibly very very long-term.
- araneae 17y agoEven on Second Life.
- pfedor 17y agoWhat's career planning and how does one go about it?
- tptacek 17y ago"I eventually want to be rich, so I'm going to be a lawyer, not an artist." "I eventually want to be rich, so I'm going to move to Ann Arbor to go to Michigan for law, instead of staying with my friends in Phoenix." "I eventually want to be rich, so I'm going to join a major firm after law school, not a nonprofit." "I eventually want to be rich, so I'm going to find out what the merit comp scheme is at my law firm, and put extra effort into doing that stuff." "I eventually want to be rich, so I'm going to work 80 hour weeks to impress the partnership selection process". etc, etc, etc. Was that what you wanted to know?
- pfedor 17y agoI see what you mean but I'm having trouble translating this from lawyers to computer programmers. You can get a programming job at a large company and then impress someone with your skills and become a tech lead and an engineering director and eventually a Senior VP, is that what you mean? The odds for a hard working hacker of getting rich that way seem worse than for an attorney of becoming a partner, or for the same hacker of getting rich through a startup. In my experience everyone who got rich did it by owning a significant stake in a business (not necessarily a startup or even anything high tech.) I'm aware there are people who got rich from writing bestsellers or becoming movie stars but I don't know anyone like it and I think such people are extremely rare. And I may be wrong but I would be inclined to classify hackers who got promoted to VPs and CTOs together with the movie stars. I don't really know much about the ownership structure of law firms, but I always assumed becoming a partner is a big deal because it means co-owning the firm in some sense, and getting a share of profits directly, not through salary and bonus. So that's why I figure this is different.
- tptacek 17y agoI'm having a hard time addressing your concern, because your notion that it's harder for a developer to eventually become a director or VP than it is for a lawyer to become a partner is neither (a) supported with any evidence or (b) apparent from my experience. I don't know anybody that you know who became rich, and so that whole second paragraph sails right past me. Especially when it concludes with a suggestion that hacker VPs are as rare as movie stars. As for the partner track at law firms, uh, fine. Substitute MBA -> investment banker, or CPA -> CFO, or Med School -> Anesthesiologist, or any number of other careers that don't have partner tracks. Even if your salary never breaks $110k as a dev, you're still fantastically lucky to get that in any career, and perfectly capable of becoming a millionaire. So, I guess, cry me a river about how hard it is for techs to succeed without starting entirely new businesses? Finally, let me just leave you with an uncomfortable truth: it is a safe bet that you will never get rich starting a company, or any number of companies.
- danhak 17y agoThese approaches are not mutually exclusive.
- ellyagg 17y agoRight. In the average case, you have almost as much opportunity to money manage, etc. as a professional and thus wind up with big savings. The bonus is that you increase tremendously your chances of becoming rich in a shorter term. Plus you get to control your own destiny, which humans really crave.
- pg 17y agoDepends on the scale of rich.
- tptacek 17y agoWhat do you think of, when you think about startup entrepreneurs getting "rich"?
- mahmud 17y agoFuck you money. 50 mil in ~5 years. Also, let's not confuse "startup", a single project requiring one's all, with "ventures", a diverse portfolio of small businesses seeded with one's capital but managed and run by domain experts. Personally, I think the finger in many pies approach is far more interesting and rewarding, since you're hedging your bets.
- tptacek 17y agoJust to be clear about one thing: even in successful VC-funded companies with actual exits, 50MM is an anomaly. I have a bunch of friends who have sold companies, and in the crazy-talk best case, one of them got ~$10MM, and it wasn't his first 7+ figure win. The companies that go for mid/high 8 figures are all apparently VC-funded, most for multiple rounds, meaning that any given founder might be hovering near single-digit points of equity. Going after a "fuck you" $50MM payday seems like an awfully bad idea. It's not going to happen.
- owinebarger 17y agoQuibbling, perhaps, but "entrepreneur" is not a profession. Professions have codes of conduct, organizations that certify members as part of that profession, etc, etc. "Entrepreneur" appears to be on the opposite side of that spectrum.
- tptacek 17y agoYou're definitely quibbling.
- owinebarger 17y agoIt probably goes with being a recently credentialed actuary. It can feel like a job with the government at times, probably because a lot of the work is related to regulatory requirements. Not to say there aren't entrepreneurial professionals, or entrepreneurial actuaries.
- tptacek 17y agoAnother example of a profession, in some states: interior designer. I think most of us are scared of the idea of our profession becoming a Profession.
- nir 17y agoAssuming the people defined as "business owners" in the Gallup data have been running their business for a while, they represent a very small minority of entrepreneurs, those who actually succeeded to some extent. "Entrepreneurship certainly has vastly more potential to make you rich"? Well, you might be the next Larry Ellison, in the same way you might start a band and become as rich as U2. If wealth is your goal, an MBA and a job in investment banking is a far more reliable and reproducible path. As I see it, most just hope to be able to make a living building software (/playing music/farming/etc) independently. Getting rich is a very rare byproduct.