Majority of the world's richest people are self-made, says new report(cnbc.com)
cnbc.com
Majority of the world's richest people are self-made, says new report
https://www.cnbc.com/2019/09/26/majority-of-the-worlds-richest-people-are-self-made-says-new-report.html
42 comments
Keyword that I cringe at is "self-made". No one is ever "self-made". These people are lucky, maybe, but self-made is a narcissistic term of false-connotation.
Ford said it well in the article, and I'd like to add that MANY engineers helped make the rocket:
>> “Just as not everyone is qualified to be an astronaut, it takes a special kind of person to be an entrepreneur,” [Ford] added. “You need discipline, intelligence, extreme dedication. But the best astronaut in the world can’t fly to the moon unless someone gives them the rocket.”
Ford said it well in the article, and I'd like to add that MANY engineers helped make the rocket:
>> “Just as not everyone is qualified to be an astronaut, it takes a special kind of person to be an entrepreneur,” [Ford] added. “You need discipline, intelligence, extreme dedication. But the best astronaut in the world can’t fly to the moon unless someone gives them the rocket.”
Wealth-X is the company that did the initial research. I would say, yes that they are indeed attempting to shape public perception.
"Wealth-X partners with prestige brands across the financial services, luxury, not-for-profit and higher-education industries to fuel strategic decision-making in sales, marketing and compliance."
"Wealth-X partners with prestige brands across the financial services, luxury, not-for-profit and higher-education industries to fuel strategic decision-making in sales, marketing and compliance."
I agree. Good data about the nuances around this seems tricky to find. In addition to reading The Millionaire Next Door a long time ago, I just did a little further research and found:
> A 2017 survey from Fidelity Investments found that 88 percent of millionaires are self-made.[1]
I'm not sure if there's anything super motivational about knowing that most millionaires are professionals near retirement age, though. :)
[1] https://money.usnews.com/money/blogs/on-retirement/articles/...
> A 2017 survey from Fidelity Investments found that 88 percent of millionaires are self-made.[1]
I'm not sure if there's anything super motivational about knowing that most millionaires are professionals near retirement age, though. :)
[1] https://money.usnews.com/money/blogs/on-retirement/articles/...
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What defines a "self-made" man?
IMO, you don't have to directly inherit a large sum of cash or assets to disqualify you from being considered self-made. People consider Bill Gates to be self-made because he founded Microsoft, but his father was a prominent lawyer and his mother was on the board of directors for a bank and the United Way. His parents were already millionaires with connections. Bill was already very likely to be successful.
IMO, you don't have to directly inherit a large sum of cash or assets to disqualify you from being considered self-made. People consider Bill Gates to be self-made because he founded Microsoft, but his father was a prominent lawyer and his mother was on the board of directors for a bank and the United Way. His parents were already millionaires with connections. Bill was already very likely to be successful.
You make a good point.
Doing a quick bit of estimating, if his parents were worth $10MM USD, and he reached $100billion in net worth, then he increased their wealth 10,000 times. Note that it is not yet inherited, as he achieved that wealth while both parents were alive.
I'd surmise that anyone that increases their wealth 10,000 times more than their parents is self made.
If Bill's parents only had $100, and he reached a million (10,000 times higher), then he'd still be "self-made".
To me at least, anyone who increases that much is impressive, regardless of what they started with - it's the multiple that is key.
So I guess the question is what is the probability of the child of a multimillionaire increasing their wealth by 10,000 times?
Doing a quick bit of estimating, if his parents were worth $10MM USD, and he reached $100billion in net worth, then he increased their wealth 10,000 times. Note that it is not yet inherited, as he achieved that wealth while both parents were alive.
I'd surmise that anyone that increases their wealth 10,000 times more than their parents is self made.
If Bill's parents only had $100, and he reached a million (10,000 times higher), then he'd still be "self-made".
To me at least, anyone who increases that much is impressive, regardless of what they started with - it's the multiple that is key.
So I guess the question is what is the probability of the child of a multimillionaire increasing their wealth by 10,000 times?
Simplifying it down to "multiplying wealth by 10,000x" is naive.
It's a lot easier to turn $10M into $100B than it is to turn $100 into $1M.
With $10M, you already have the basics handled. You can have a house and car that are paid off and enough cash stashed away to handle living expenses for the rest of your life and still have $7M+ to piss away. If you're smart and never dip into the funds reserved for lifetime living expenses, it's impossible to fail.
With only $100, you're struggling to put food on the table. Possibly even working two jobs with no time to work on building a business.
And here, I haven't even touched on the concept of "connections". Someone with an 8-figure bank account likely knows who to talk to when it comes to getting a product in front of the right people.
If Bill's parents had only $100 and turned it into $1M, then definitely, he'd be self-made. But since he started with likely an 8-figure backing, he's definitely not.
It's a lot easier to turn $10M into $100B than it is to turn $100 into $1M.
With $10M, you already have the basics handled. You can have a house and car that are paid off and enough cash stashed away to handle living expenses for the rest of your life and still have $7M+ to piss away. If you're smart and never dip into the funds reserved for lifetime living expenses, it's impossible to fail.
With only $100, you're struggling to put food on the table. Possibly even working two jobs with no time to work on building a business.
And here, I haven't even touched on the concept of "connections". Someone with an 8-figure bank account likely knows who to talk to when it comes to getting a product in front of the right people.
If Bill's parents had only $100 and turned it into $1M, then definitely, he'd be self-made. But since he started with likely an 8-figure backing, he's definitely not.
> It's a lot easier to turn $10M into $100B than it is to turn $100 into $1M.
Baloney! If it were, there would be tons of people with Bill Gates level wealth! (last I checked, there were only 2 - him and Bezos).
The facts speak for themselves.
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EDIT:
After rereading this comment, the tone I have ("Baloney!") seems harsher than Iintended. Still, I'll leave it as such because I don't like to change what I wrote on HN. Please don't take it as an insult, but rather as emphasis of the extent that I disagree with your point.
Baloney! If it were, there would be tons of people with Bill Gates level wealth! (last I checked, there were only 2 - him and Bezos).
The facts speak for themselves.
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EDIT:
After rereading this comment, the tone I have ("Baloney!") seems harsher than Iintended. Still, I'll leave it as such because I don't like to change what I wrote on HN. Please don't take it as an insult, but rather as emphasis of the extent that I disagree with your point.
I said "easier", not "easy".
But even if we tone it down by an order of magnitude or even two, I think it still applies. I think turning $10M into $1B is easier than turning $100 into $10,000, for the same reasons outlined above. Don't underestimate the massive impact it has to be starting at a level where living expenses are of zero concern.
But even if we tone it down by an order of magnitude or even two, I think it still applies. I think turning $10M into $1B is easier than turning $100 into $10,000, for the same reasons outlined above. Don't underestimate the massive impact it has to be starting at a level where living expenses are of zero concern.
At $100 you can just work for wages until you have more money.
Easier said than done when you have a low-wage job.
Then join the military and build up savings.
You're only stuck in a $100 asset hole if you refuse to do anything about it, or if you intrinsically offer no value to the world.
You're only stuck in a $100 asset hole if you refuse to do anything about it, or if you intrinsically offer no value to the world.
Also, you are assuming that he started with an "8-figure backing".
Highly doubtful - I'll look it up later and do a mea-culpa if I'm wrong, but if his parents gave him $10+ million in the mid 1970's, I'll eat my hat.
Highly doubtful - I'll look it up later and do a mea-culpa if I'm wrong, but if his parents gave him $10+ million in the mid 1970's, I'll eat my hat.
10 million in liquid cash, probably not, but the introduction his mother gave him to the CEO of IBM (they were on the board of United Way together) probably ended up being worth considerably more.
This exactly. It's a whole different scale.
If you were working two jobs, you’d have more than $100.
Be reasonable. Offset the 'starting point' by cost of living. Its only reasonable to gamble with excess money, not grocery money.
Rich people have many more opportunities to get richer, than any of the rest of us.
Rich people have many more opportunities to get richer, than any of the rest of us.
Then why are there only 2 people on the planet with $100 billion in wealth?
Answer - because it's really freaking hard to multiply by 10,000 times.
Answer - because it's really freaking hard to multiply by 10,000 times.
Not so hard, that a person can do it.
It goes much deeper than "the multiple is key," due to the compounding effects of wealth and privilege. Poverty, for example, is a disease that is very difficult to shake, and it's often generational.
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There's no way they're self-made. They may not have inherited it all, but you get rich, truly rich rich, only by having a bunch of other people do work for which you are paid.
Arnold would disagree: https://youtu.be/RJsvR_gSEjg?t=270
I think most people's problem is that an initial winner is more likely to win next time in the system. these self made men certainly had some attributes which made them "win", it wasn't all luck, but as the game goes on, the playing field becomes more and more unfair. Not to mention how a certain segment of wealthy people influence politics and media to completely further their advantage. I think at the root of the issue is the idea of "meritocracy" and "fairness." Sam Walton was a great man, but are his children? Yet, they still control a vast amount of wealth and influence regularly ranking in the top 20 richest people in the World.
People wail on Zuckerberg, Gates and Bezos but you have to respect them more than people who inherit and tonne of money and just sit on it or watch it grow on its own...
Gates is not a self-made man. His father was a prominent lawyer, and his mother was on the board of directors at a bank. He was already basically guaranteed to be successful, even without forming Microsoft.
Wasn’t she on the board of IBM?
She served on an executive committee at the United Way with John Opel, the CEO of IBM at the time the PC was being born.
My point is more that if your parents have a few million, and you become the world's richest man, that's a lot more than if your parents are billionares and you become a billionaire...
He built one of the world's largest and most successful companies from the ground floor. That is orders of magnitude greater than just "being successful."
Which is by their own merit, their empires were built from scratch, which I do respect. I find it less respectable if this wealth was immediately inherited and yet they contribute nothing.
Wealth that is 'won' or 'inherited' seems to get spent quicker than if it was 'earned'. Question is, however, is for the former: are they smart enough to make it recurring income.
Wealth that is 'won' or 'inherited' seems to get spent quicker than if it was 'earned'. Question is, however, is for the former: are they smart enough to make it recurring income.
Microsoft’s first product ever was a port. MS-DOS was literally just someone else’s product, rebranded. Bill Gates’ wealth was built on the backs of many, many people, many of whom he just flat-out screwed over. Microsoft was anti-competitive almost from the very start, that’s why Gates is wealthy, not because he built himself up from nothing.
MS made its money selling Bill's 4K/8K BASIC https://en.m.wikipedia.org/wiki/Altair_BASIC for six years before he bought QDOS/MSDOS
Btw, this 'report' isn't new. It's almost a year old based on 2 years old data. The pandemic has changed some things.
This is great to hear!
> Of those folks, 67.7% were self-made
of the ~1600 people who crossed a threshold of $30M, 67% are self made. this is 1000 people.
does anyone else feel this is a statement intended to shape public perception?
does anyone feel that a reader might be misled into coming to a different conclusion than what the data actually indicates?