But that is a question of who belongs to the 0.01% and who belongs to the 1%. It's not a very interesting social mobility study and I agree with you that the "rich get richer" argument makes no sense for the super rich outliers.

Unfortunately, things do get a lot more predictable at the lower percentiles.

William Henry Gates the Third had a trust fund before he was born. His downside risks for anything he chose to do in life were completely nonexistent. Same with Zuck. Same with Spiegel. Same with 99% of the entrepreneurs HN idolizes.

Here's some light reading:

http://qz.com/455109/entrepreneurs-dont-have-a-special-gene-...

http://philip.greenspun.com/bg/

EDIT: Removed potentially inflammatory line, which went as follows: "Just a bunch of rich kids trying to prove a point to their parents".

This is definitely a personal opinion, but one that has merit if you examine the evolutionary psychology of parent-child relationships. The conversation is a bit in depth, but please understand that I was not trying to simply fire off an ad hominem. I was instead trying to hint at the incentives which drive an already rich child to strive for more wealth. For the vast majority of us who have to work for a living, such behaviors seem confusing. Only upon deeper analysis do the pyschological incentives for such individuals begin to make sense.

You appear to be refuting a claim that was not made in the GP post or in the Forbes article they cited.

Grandparent only said that Gates is among the top 3 riches and is not going to pass on his wealth, they did NOT claim that Gates was born poor or otherwise among the self-made millionaires.

Similarly Forbes lists Gates as the richest person, but makes no claims whatsoever about how he made his fortune. There are two independent claims there and at no time does either source claim that Gates is in the self-made group.

Your QZ article is more responsive, but it boils down to saying that one needs access to capital to start a business. This is not really surprising and ensuring that any capable person can get funding is why we have things like YC. If there's any group out there with good ideas that's being systematically ignored or denied funding, you and anyone else could make big money by investing in them. All you need to do is prove there's an opportunity being ignored and people will jump on it, chasing the money.

You had me until there. Why question their motives? Is it really so hard to believe that Gates really loved computers?

If he was just thinking in terms of outstripping his parents, there were lots of other more-credible avenues available to him. The very idea of a personal computer was scoffed at. Not just by non-techies, but people like DEC founder Ken Olsen.

Did Gates' love of computers motivate Microsoft's anticompetitive moves in the 1990s?

One may as well doubt that Hitler actually liked being a vegetarian.

I very much doubt that cheating athletes love the sport. They may love the fame and benefits that come with the sport, but if they loved the sport, they would work hard to become better at it rather than cheating.

I love my job. I read up on research, volunteer at conferences, tinker/hack on my own time, and provide lots of free consulting. Heck, the only reason I don't provide more free consulting is, well, because I have bills to pay. I certainly can't imaging expressing my love for the field by engaging in unethical, immoral or illegal activities. I suppose if it was the money I loved foremost, it might be different.

One may as well think that Hitler eating meat remains a vegetarian.

Uber and AirBnB are subverting rules and breaking laws in hundreds of municipalities. Do you think they don't care about what they're building over there? Is it just money-money-money and no serious interest in technology? Does that mean, by proxy, that Paul Graham only cares about money?

Is it really so hard to believe that people can have more than one thing that motivates them? Why did Ray Ozzie join such an evil beast? Surely he's just motivated by greed!

Black and white thinking will be the death of us all.

Uber and AirBnB? Do they love the work they do? Maybe. But they love themselves more. They love the idea of being "disruptors" or "innovators" or "rich" more than they care about transportation, housing, or their customers.

And those guys who love sports? Maybe they love winning more.

It's easy to feign passion, after all. Especially when you're already committed to investors.

People go on about Bill Gates and antitrust, but do they really think Steve Jobs or Scott McNealy or even Page & Brin would behave differently?

Bill Gates' biggest fear was not losing the OS monopoly. His fear was of Microsoft turning into IBM -- always having to run everything you do by lawyers.

MS-DOS wouldn't even exist if IBM hadn't had the justice department watching their every move.

It may well be that Gates was driven to purposeful action from a love of computers. That he has had no notable productivity since Altair BASIC (other than third-party accounts of him doing code reviews early at Microsoft), nor any research, would nevertheless make his contributions to the field quite little.

http://www.joelonsoftware.com/items/2006/06/16.html

"Bill Gates was amazingly technical. He understood Variants, and COM objects, and IDispatch and why Automation is different than vtables and why this might lead to dual interfaces. He worried about date functions. He didn't meddle in software if he trusted the people who were working on it, but you couldn't bullshit him for a minute because he was a programmer. A real, actual, programmer."

Edit: My point is, one can love computers and be very good at them without making significant contributions to the field. That describes me and probably most of the people on HN.

I agree, it doesn't matter what his motivation was, but he wasn't solely motivated by "computers".

I love computers, but I don't start companies just to say I start companies. I expect a financial return.

@Natsu, my point of contention is the very liberal definition of "self-made" and "made their money themselves". If you give every reader on HN a trust fund, and a few start successful companies, would these individuals be considered "self-made"?

I don't think so. Self made means start with zero net worth. That means no trust funds, no loans at 0% from parents with infinite payback periods, and no parent board members making absurdly lucrative deals that you'd never get otherwise. Just money you've made from your own labor, and loans you've received without nepotism. You'd be surprised how few entrepreneurs fall under this category.

If you don't restrict your definition in this way, then every rich person is self made, because the interest accruing in their trust fund happened during their lifetimes.

Frankly, I'd be surprised if anyone fits under that category. Pretty hard to survive as an infant completely on your own.

I mean, obviously that doesn't count. But where exactly are you drawing the line? It's less black and white than you are implying; it seems like there's enough fuzziness here that you can put anyone in the "not self-made" category, so of course group X has very few members outside that category. Because, you know, Mr. CEO over here was driven to college by his parents once, so he's out, and Ms. Entrepreneur there inherited a few hundred dollars from her grandfather, so that's no good either.

Most rags to riches stories we have these days, are really a relatively well off to riches stories when you look at them. The only exceptions are people who won the celebrity lottery.

It's surprisingly hard to accumulate wealth when you're struggling to keep the lights on.

Someone who has more discretionary income can take on more risk than someone who can't keep their lights on, and a failed venture doesn't have the same consequences.

Just by virtue of taking more risk, those in the middle class are expanding their chance of success by orders of magnitude more.

I'd dare say it's impossible for the middle class to not to become "mega rich" at a greater incidence than poor becoming middle class.

I'm just saying that a lot of the people who normally discuss these "But it's not that hard or impossible to become rich, what are you talking about?" stories, are the kind of people who somehow magically were able to go to an ivy league school or similar.

They say they became rich on their own, and that most of the mega rich also became rich on their own, but forget that compared to the vast majority of the population, even confined to the US, they were already born rich and have a massive leg-up in the world from day 1.

edit: As Donald Trump would say "I made all my own money. My dad only gave me a small 1 million dollar loan, and with that I was able to make my own fortune."

The assumption is that the dad will be less stringent on due diligence, more forgiving in what he gets in return, and most importantly, will have brought you up all your life in such a way that you are primed for handling those kinds of money.

The wider point is that someone who grew up in a trailer park, doesn't even have access to investors in the first place. For example: how are you going to get an investment, if you can't afford to to schmooze with investors? What if a $50 dinner is completely out of your price range? What if buying someone a $5 coffee is a big deal financially?

And then there's the issue of safety net. There's a big difference between your venture failing meaning you end up living on the streets, or in your parents' garage.

1. My great grandmother was a homeless woman after getting kicked out of the household because she was the second wife of a husband who had passed, leaving my grandmother in orphanage during WWII when the Japanese invaded China.

2. A couple of years later, her family came back for her. My grandmother worked odd jobs here and there, and my great grandmother gambles it away. My grandmother, fed up, left her to go live in Hong Kong with an uncle.

3. My grandmother's uncle was only employed from time to time. They lived on one meal a day, some rice, flavoured with a few drops of pig fat. My grandmother wanted a better life. She signed up as a labourer to carry tens of kilograms of dirt everyday on her shoulders[1], as part of a project to clear a mountain. Her uncle said she wouldn't last 3 days. It was such painful work she almost went home on the first day. But with such a stark challenge from her uncle and she didn't want to lose face, she stayed for 3 months. She was 14. She went on to work as a servant, but more or less treated as a slave, getting yelled at and beaten, and then finally someone taught her the business of picking up factory fabric scraps, weaving them into clothes to sell them. And that's the business she was in, even until the time I was following her around when I was 5 or 6. She bought factory scraps in bulk, using her sewing machine, made shirts and pants, and in 1995 or so, sold them for HK$10 each. It put my mother through school and nursing school. [2]

4. My mother was a nurse, and it was a well paid profession. However, my parents lost almost everything from their real estate investments in the 1997 Asian financial crisis. Debt can ruin you like that. They sold everything, my mother left her position as chief nurse in a hospital, and using a skilled migration visa, we moved to Australia, starting from zero.

5. Today I'm working as a software engineer in Australia. When I was tempted to slacken for my university exams, when I was tempted to lower my ambitions and stay in an unskilled job, when I was tempted to take an employer's low ball salary offer based on my living expenses, I remember what my grandmother had gone through, to put me here. And I will follow her example, and do the same for my family.

"Stay hungry, stay young, stay foolish, stay curious, and above all, stay humble."

[1] A carrying pole. https://en.wikipedia.org/wiki/Carrying_pole [2] My grandfather had an accident while fixing a lift, and lose control of his legs. Unable to provide for the family, he killed himself. My uncle, my mum's brother, grew up mentally ill. My mother also had a sister. My grandmother brought up three children and supported my great-grandmother, on her own.

> There’s no doubt that entrepreneurship is thriving globally. Fully 1,191 members of the list are self-made billionaires, while just 230 inherited their wealth. Another 405 inherited at least a portion but are still working to increase their fortunes.

Not sure how "at least a portion" is defined, but I imagine less than half had significant inheritance. That's not to say the self-made billionaires were born middle class, but it does suggest that wealth does not necessarily beget wealth.

But even if 1190 of them had gone "rich from zero" and only 1 had inherited his wealth, it wouldn't be that comforting by itself.

What you generally want in a society is: lots of poor people to be able to get out of poverty (into middle class), middle class to have a decent chance to become upper middle class, etc -- and of course most middle class to be stable and not fall into poverty.

That is, things that affect the majority of the population.

A society with a middle class that shrinks and worse prospects for 99% of kids compared to their parents is not absolved if it has 1000 billionaires emerge out of poverty (or middle class). A society with just 10 billionaires but far better social mobility (e.g. like in the 50's) would be much better to live in.

That's just relevant as an opportunity to a mere .0002857% of the population.

I know it's pretty minor, but it's actually 1,826 in total, so it's 35%.

>A society with a middle class that shrinks and worse prospects for 99% of kids compared to their parents is not absolved if it has 1000 billionaires emerge out of poverty (or middle class). A society with just 10 billionaires but far better social mobility (e.g. like in the 50's) would be much better to live in.

I don't follow this logic at all. Does number of billionaires created affect anything else? They seem somewhat unrelated to me, especially in light of what I said before about the rich constantly turning over.

A, thanks. Missed that, thought 1191 was the total given.

I think the rest of the argument remains unaffected though, so wont change it.

>I don't follow this logic at all. Does number of billionaires created affect anything else?

Yes, I don't see the two things as "unrelated" events, but as the difference between a society set up to sustain and grow a strong middle class, and one that caters to a tiny majority of rich (regardless how they got there, by inheritance or bootstrapping) to the detriment of the middle class.

That is, this outcome is not just the effect of random people going about their life more or less independently and succeeding or not, but of a society (laws, education, etc) that has been rigged towards sustaining and growing (but always to a negligible percentage of the total) the upper classes, and milking the middle class and the poor to oblivion.

If upward mobility to achieve great wealth is your concern, surely this means we're heading in the right direction. I don't think the system is rigged towards benefiting those with already great wealth, but markets have expanded and entrepreneurship has a bigger upside than it has in the past. You don't have to take the analysis I quoted at face value, but just take a look at the richest Americans. No Vanderbilts, Rockefellers or Carnegies.

My opinion may not be popular, but I find it encouraging to think that so few can create such great wealth in today's society, even if the odds are against me creating such wealth. In many cases, that means that a product or service one person creates can benefit a large number of people and make you very wealthy. And I personally benefit from many of the products and services that were created by this generation of the wealthy individuals.

[0] http://www.forbes.com/sites/afontevecchia/2014/10/02/the-new...

No, "upward mobility to achieve great wealth" is not my concern -- I think I made that clear in the comment.

Upward mobility to middle class, middle class stability (to going back to poverty), and upward mobility from middle class to upper middle class are my concerns.

To which "upward mobility to achieve great wealth" could even be working against -- while itself concerning a very tiny majority.

>I don't think the system is rigged towards benefiting those with already great wealth, but markets have expanded and entrepreneurship has a bigger upside than it has in the past. You don't have to take the analysis I quoted at face value, but just take a look at the richest Americans. No Vanderbilts, Rockefellers or Carnegies.

What I'm trying to get at is that there's a difference though between:

"we could only make 10 non-rich people ultra-rich in 1950, whereas we have 1000 non-rich made ultra-rich today".

Which might be all well and good, but this "upward mobility" only concerns a tiny minority, and having a healthy "upward mobility" and social stability for the large masses.

I hear this a lot but I really don't understand the logic. Because the middle class is a subjective and proportionate categorization, your target is always going to be moving. Who cares about joining the middle class if most of their needs already being met.

If, for instance, a replicator was invented that provided food and shelter to anyone who wanted it for free, a hell of a lot of people could live quite happily and comfortably without being middle class. So the goal should be to get to that sort of scenario as fast as possible. That is, a world in which the cost of covering our basic human needs is so small that nobody needs to be middle-class or higher to be happy.

Of course the target its moving. That means society is progressing in the aggregate. So why keep "desired standards of living" stuck in the past? In 1840 having no electricity and running water was considered acceptable. Today we think even internet is a kind of necessary good.

So, with progress the definition of rich / middle class / poverty etc should move too. Who said poverty is some absolute measurable state? Obviously you shouldn't consider yourself "rich" or even middle class, if you live in a trailer park with $100/month, just because you have housing, electricity and lots of available food in Walmart, whereas 1200 A.D peasants and 10000 B.C cavemen had neither...

What was the case "in the past" doesn't come into play when people compare their status to other contemporaries -- and the level of the society they live in.

So then it's all about envying those who have more, no matter how comfortable a life you happen to have.

You could use the moralistic conception of "envy", and make it sound bad, like telling kids "you should not envy your brother other".

Or you could:

1) see that envy and egoism is considered a primary motivator for advancement (if you like free market theories, e.g. Adam Smith and the "egoism of the butcher", etc.)

2) accept that humanity should progress in tandem, not just let some people get the majority of the benefits of today, just because the vast majority is also "better off compared to people in the past" (if you prefer socialist theories).

If they take away your internet access, will you be fine with that because people in 1850 lived in log cabins without internet, electricity or running water and you still have it so much better than them?

I agree it's a primary motivator for advancement, but if the government redistributes wealth it destroys that motivation and the benefits that come along with people having it (new businesses, higher productivity, increased education, etc).

> 2) accept that humanity should progress in tandem, not just let some people get the majority of the benefits of today, just because the vast majority is also "better off compared to people in the past" (if you prefer socialist theories).

I think at some point there's little point to everyone increasing their standard of living. We're already reaching a point here in the US where people are simply bored. Would we all be better off as a society if everyone had an extra 500 sq. ft. added to their homes, or a Tesla in their garage, or designer clothes? We are reaching the point of diminishing returns when it comes to material possessions, unless it's all about envy like I suggested in my previous reply.

> If they take away your internet access, will you be fine with that because people in 1850 lived in log cabins without internet, electricity or running water and you still have it so much better than them?

Well, I'm not being "given" my internet access, I pay for it. But yes, if I could no longer afford to pay for my internet access I would still thank my lucky stars I have electricity and running water. Duh?

I guess what I'm saying is they all want the world to think they made their own money. All are modern day Horiatio Algiers?

So, I don't buy Forbes figures; "There’s no doubt that entrepreneurship is thriving globally. Fully 1,191 members of the list are self-made billionaires, while just 230 inherited their wealth. Another 405 inherited at least a portion but are still working to increase their fortunes."

Exactly how did Forbes come up with these numbers? I quickly looked at the list, and I buy the athletes didn't have much help, but the rest; I wouldn't bet on it. They had a lot of unseen help. Yea, you can always find a few exceptions, but I bet it's less than 10 individuals.

http://www.pewtrusts.org/en/research-and-analysis/reports/20...

Calling the US a 'feudal' state is obviously hyperbolic, but it's most definitely a classist society.