| ▲ | TrackerFF 11 hours ago |
| I think the distinction the politician tried to make, was that you don't "earn" a billion dollars the same way the vast majority of people make their money. You become a billionaire by company ownership, not getting cold hard cash. The hierarchy of wage looks something like: 1. hourly pay (how many hours you can work sets the maximum possible salary) 2. base pay + cash bonus (the cash bonus starts to increase your earning potential. Sometimes the bonus can be huge, for traders, salespeople, etc.) 3. base pay + stock options (the stock options can outsize your base pay by big margins) 4. stock ownership (almost all your wealth is tied up to the stocks) The vast, vast majority of people are stuck at (1), and will never move to (2). Nearly all billionaires are at (4). The average worker will work around 100k hours in their lifetime. If you started working today, with a 2% inflation rate, you'd have to start getting paid close to $6000 / hour in order to reach a billion dollars (pre-tax) in total income by the time you retire 50 years from now. Another factor to consider, is that salaried workers can't use leverage to increase their earnings. A startup founder can find investors and raise money, which works as rocket-fuel for their company. You can practically outspend your competition. That is simply not possible for regular workers, without breaking rules (as in outsourcing your job, taking on several jobs and outsourcing those, while collecting). |
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| ▲ | oreally 10 hours ago | parent | next [-] |
| Add to that, if there exist individuals who have enough of the resource of highest utility, it can become a liability for society. One bad way is that they use it to suppress others, through lobbying or buying out media companies or whatever. The other is how vultures react to them, pushing up the prices whenever the billionaire individual is involved and pricing out others. |
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| ▲ | systemf_omega 11 hours ago | parent | prev | next [-] |
| You say "stuck at (1)" as if most people actually desire this kind of wealth and are trying to become entrepreneurs. The simple truth is that many people don't want to step into that kind of intensity and uncertainty, or lack the skills to succeed in a cutthroat industry. The idea that founders are somehow "cheating" is hilarious to me. Anyone in the developed world can easily become a founder, why don't you try it? |
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| ▲ | paulryanrogers 2 hours ago | parent | next [-] | | > Anyone in the developed world can easily become a founder, why don't you try it? Because most of us have families and can barely afford rent and healthcare. Those of us with a bit more success are finding that extended family are falling into poverty and need help (thanks inflation and transition to lower wage jobs!). They cannot work more than 2 jobs and also found a company. Most newly founded companies fail, so it's an expensive process unless you've a network of FFF or VCs to draw from. Many founders get nothing out of the process but stress and bankruptcy. | |
| ▲ | TrackerFF 10 hours ago | parent | prev | next [-] | | I'm saying "stuck" in the sense that their earning potential is completely dependent on how many hours they put in, and how much their annual raise is. While many don't necessarily value pay as #1, it is important to people. If a regular worker receives a 20% pay increase, that's huge compared to not getting anything, or something which barely covers inflation. Even though the dollar amount may not be much compared to others. | |
| ▲ | twoodfin 10 hours ago | parent | prev | next [-] | | Also: Kansas City Chiefs quarterback Patrick Mahomes is well on his way to being a billionaire, assuming he’s not already there. He has natural talent, to be sure, but so do successful startup founders or successful bankers or successful lawyers. He didn’t “earn it”? | |
| ▲ | jmyeet 10 hours ago | parent | prev [-] | | The idea that people don't want financial security or independence is absurd on its face. If you look at people who have founded billion dollar companies, you see that those people aren't a representative cross-section of society. You see factors such as: 1. Coming from a relatively affluent background (eg Bill Gates's father was a successful lawyer); 2. Social status. For example, Sundar Pichai came from a relatively modest socioeconomic background but he's also upper caste; 3. Even having access to a top-tier education (eg Stanford) generally shows a lot of privilege, Social connections, financial security, probably access to a quality education prior, tutors and so on; 4. Even just being white in the US means your family had access to create generational wealth that minorities didn't. The post-WW2 GI Bill famously discriminatory in providing cheap mortgages (as well as subsidized college eduation). One cannot overstate the opportunities available to you if you are "free to fail". If your family can support you or even you can live at home then you have the option of starting a company and being unpaid for a long period. As for founders "cheating", well that's a different story but also objectively true. Many companies extracted value by essentially breaking the law and getting large enough before enforcement caught up with them, which allowed them to buy those changes. AirBNB and Uber are good examples of this. The myth of meritocracy has been so successfully propagandized it's no wonder that so many people see themselves as "temporarily embarrrassed millionaires". | | |
| ▲ | WalterBright 3 hours ago | parent [-] | | > Even just being white in the US means your family had access to create generational wealth that minorities didn't. My grandfather's business operated out of an 8*8 shack. After my dad passed away, I was shocked to discover that my first salaried job paid more than his last salaried job. These days, anyone can get a free K-12 education, and then loans for college. Generational wealth is not required. | | |
| ▲ | paulryanrogers 2 hours ago | parent [-] | | > Generational wealth is not required. Freedom from generational poverty is required. A lot of PoC in the US grow up in dire straights which weighs on their mental health. Their chance at a university education drops rapidly when they have a network that depends upon them working from adolescence onward. My grandfather worked selling cookies for decades and retired with a pension. My father worked as a professional engineer and midlevel manager at least as long and had less to show for it. I'm trying to work my way into upper management and will likely retire later and with less than either of them. People feel the walls closing in on them. Telling them to buy more lottery tickets, albeit in the form of founding companies, isn't an answer that scales. | | |
| ▲ | WalterBright a few seconds ago | parent [-] | | > Freedom from generational poverty is required. This is simply false. Oprah grew up on welfare and is a multi-billionaire. > Telling them to buy more lottery tickets The math on lottery tickets is negative. The math on stocks is positive. The book "The Millionaire Next Door" is a recipe for ordinary people becoming wealthy. You can't afford not to read it. |
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| ▲ | WalterBright 3 hours ago | parent | prev | next [-] |
| > salaried workers can't use leverage to increase their earnings Of course they can. They can invest, say, 20% of their income into stocks. They can borrow money to invest into stocks, too. |
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| ▲ | paulryanrogers 2 hours ago | parent [-] | | Plenty of workers have to take loans just to pay rent or healthcare. And even if they did borrow to invest, they can't sell without paying CG. And what if they bet wrong? |
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| ▲ | DonsDiscountGas 10 hours ago | parent | prev [-] |
| Even if you're "stuck" at 1, a person with a reasonably high salary can buy equity in the public stock market and start capturing exponential growth. And if they can outperform the market by even ~5% that can really add up[0]. Not to billionaire status but maybe it's okay to not be a billionaire. [0] Big "if" obviously but so is a 15% monthly growth rate in revenue. |
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| ▲ | WalterBright 3 hours ago | parent [-] | | Put the robinhood app on your phone and start investing in stocks for less than $100. | | |
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