According to https://www.cnbc.com/2014/10/03/two-thirds-of-billionaires-m..., about 2/3 of billionaires have self-made fortunes.

So clearly family connections help. But that doesn't appear to be most of the picture.

> According to https://www.cnbc.com/2014/10/03/two-thirds-of-billionaires-m..., about 2/3 of billionaires have self-made fortunes.

> So clearly family connections help. But that doesn't appear to be most of the picture.

That's a very simple view of the OP's statement - notice that OP did not say inherited wealth, but instead 'family connections'.

For example, if you received personalized advice to invest a lot of money in a business that later became wildly successful, are you a self-made individual? There are even more subtle examples of how relationships can lead to wealth.

Anyway, perhaps a better analysis is asking what happens to children who grow up either in poverty or in wealth: https://www.nytimes.com/interactive/2018/03/19/upshot/race-c...

If someone tells you to buy something and you risk your money you are responsible and can claim you are self-made. There is a lot of free advice if you followed all of it you would probably be broke or dead.

If you have access to someone is giving out good investment advice, you are better off than 99.9999% of people.

It's as hard to know whether the person is giving good investment advice as it is to give good investment advice yourself, though. So generally, it's not very helpful.

...doesn't this just reinforce that having family connections matter more? Are you more likely to follow the advice of your family or some stranger? If your family connections have insight and/or inside knowledge of markets, aren't you more likely to accidentally take good advice than the average joe? You're still not immune to bad advice, but you have a higher percentage chance of having higher quality information to act on.

> are you a self-made individual?

Yes. You took the risk. The rewards are yours - and if you fail, nobody's going to bail you out.

Is Bill Gates self-made? Or was it the fact that his father could cut a $25,000 check on a whim?

Having lots of ready liquid cash gets you the ability to make deals that normal people do not have access to.

You don't even have to be that rich. Take a look at Craigslist at the end of the month before rent is due.

>> Is Bill Gates self-made? Or was it the fact that his father could cut a $25,000 check on a whim?

And his mother had good connections with the IBM board, leading IBM to give the operating system business to Bill .

Everyone has certain advantages, one of the keys to creating value is to leverage those.

The public & press love rags to riches stories, so even someone without any of the traditional 'advantages' can leverage that for publicity, fundraising, etc. And many independently wealthy business-people have.

And yet IBM went to Digital Research first, and DR couldn't close the deal. Of course, Gates was already successful when IBM came by, and there's no reason to believe he wouldn't have been greatly successful with or without IBM.

Lots of people can get 25,000 and anyone can get that amount if there was a billion dollars payoff at the end.

Millions of people started a business with at least 25,000 and there are only a few billionares, most lost it all but some made a living and some got richs.

Millions more were never given the chance, because they couldn't get that kind of funding.

> Is Bill Gates self-made?

Yes.

> Or was it the fact that his father could cut a $25,000 check on a whim?

There are millions of Americans like that, and only one Bill Gates.

There's no evidence, either, that his father bought the success of Microsoft. The early success of Microsoft did not require anything more than rather trivial amounts of cash.

His father was a partner in a top Seattle law firm and his mother is a regent of the University of Washington and a director of Pacific Northwest Bell. You think that didn't give him any business advantages other talented programmers didn't have?

His mother is credited in her obituary with pulling strings to get him the IBM contract: https://www.nytimes.com/1994/06/11/obituaries/mary-gates-64-...

"Her tenure on the national board's executive committee is believed to have helped Microsoft, based in Seattle, at a crucial time. In 1980, she discussed with John R. Opel, a fellow committee member who was the chairman of the International Business Machines Corporation, the business that I.B.M. was doing with Microsoft.

Mr. Opel, by some accounts, mentioned Mrs. Gates to other I.B.M. executives. A few weeks later, I.B.M. took a chance by hiring Microsoft, then a small software firm, to develop an operating system for its first personal computer."

Sure, Microsoft was on a nice trajectory, and there is no doubt that Bill Gates is smart.

However, that $25K check is the difference between Microsoft being a solidly growing company up against someone else that IBM anointed vs Microsoft is the anointed one.

$25K was about 5x the price of a car at the time. That makes it about $150K in modern dollars.

How many people can cut a $150K cash check because their kid says it's a good idea? Even most "millionaires" can't cut a check for cash at that level.

Starting a restaurant easily can cost $25K in those days. Yet people did it all the time.

Don't overlook that Microsoft was IBM's second choice. Their first was Digital Research.

And lastly, I haven't been able to find any evidence that Gates Sr. funded Microsoft with at $25,000 check. Citation needed! Certainly there's no mention in the book "Hard Drive", and my recollection is that he started MS with $5,000.

There's nothing Bill Gates did at the time that a very, very large number of people could have done, if they'd only thought of it and had been willing to risk it. I knew many computer people at the time, and they dismissed PCs as toys and saw no future in them. Including many who had money to invest in such a startup.

That amount of cash is not trivial for the vast majority of Americans.

Millions can do it, rendering the notion that that was what enabled Bill Gates to be a zillionaire absurd.

And then there are all those millions buying houses for over $500,000, and $30,000+ cars, who could invest $25,000 in a business instead. But that's why they aren't Bill Gates - they made different choices.

There are vastly more people with access to $25k in cash than there are people who end up making an impact as large as Gates had. It still takes an enormous amount of work and savvy to pull off what he did.

Gates seemed to be the only one who understood the value of DOS initially. Not you, not I, not Gary Kildall, not IBM, not Tim Paterson.

There were thousands of other people involved in the industry at the time. Many of them understood the future value of personal computer operating systems.

Any idea how he got to that unique understanding? Is that something we can learn from?

If you read http://gunkies.org/wiki/Gordon_Letwin_OS/2_usenet_post closely you'll understand the key business insight about the value of platforms that underlay a lot of Microsoft's success. And further see how Microsoft's continued success required a series of good decisions that capitalized on the famous lucky break.

If I knew how, I'd be a billionaire myself :-)

Sure. But if he didn't have access to that money, would he still have been able to do that?

Yes. An aggressive entrepreneur like Gates would be able to rustle up a few paltry thousand in investment capital. People do it all the time.

That is a necessary but not a sufficient condition.

His personal connections and family wealth were a lot more significant than one loan.

Billionaires are the outliers among wealthy people. Its hard to connect what they did or are doing, to anything that most people will ever know or experience.

https://imgur.com/a/Bu8iLiz

Yeah citation needed

Unless all the scholarly work on “how is value determined” attempting to define this is wrong. Did we just solve it on a web forum by accident?

Short answer is there isn’t an answer that’s reliable except “networking and feelings” making it seem arbitrary

Economics and Wall Street are not free markets for ideas. They’re on rails financial walled gardens. One must recite the theories and have the right keys (money) to gain entry

Nothing about the system is objective

You do realize that 80% of people worth >$1 million had parents that were not millionaires right?