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A comment on If you want to understand Silicon Valley, watch Silicon Valley. Parent comment

Re:If you want to understand Silicon Valley, watch Silicon V... by clairity on Monday November 19, 2018 @03:33PM (#18489541)
having money (as you note, the family wealth came from kris jenner's husband) makes it easier to make more money, with no implications about the intelligence of the wealth holder.

take trump for example. nytimes detailed about $600+ million in wealth transfer to him from his dad. while we don't have tax returns or financial statements to confirm this, he's probably worth about a billion dollars now. that rate of return is (roughly) less than 2% yearly. he would have been way better off putting that money in an index fund--he'd be worth about $3 billion if he had.

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Re:If you want to understand Silicon Valley, watch Silicon V... by anthony_barker on Monday November 19, 2018 @06:07PM (#18490544)
Number one trump business deal .. hey Dad can I borrow 50 million... Quote horse sense 1992 https://www.amazon.fr/Horse-Sense-Ahead-Business-1992-03-01/...
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Re:If you want to understand Silicon Valley, watch Silicon V... by marshray on Monday November 19, 2018 @09:49PM (#18491494)
To be fair, there are plenty of professionally managed funds that haven't beaten the index over the last several decades.
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Re:If you want to understand Silicon Valley, watch Silicon V... by cm2012 on Tuesday November 20, 2018 @02:02AM (#18492276)
He also inherited that 600 mil in the form of NYC real estate, which of left untouched would be north of 10 bil now.
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Re:If you want to understand Silicon Valley, watch Silicon V... by rightbyte on Monday November 19, 2018 @04:21PM (#18489852)
A index fund doesn't follow the index. There is a broker fee, stock transaction fees for the broker to keep the fund balanced and stock falling out of the index (because of the company eg. halfway to bankruptcy) is a loss for the fund but in the index the next biggest stock just takes it's place.

To keep up with the index is probably really hard.

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Re:If you want to understand Silicon Valley, watch Silicon V... by RussianCow on Monday November 19, 2018 @05:41PM (#18490393)
The iShares S&P 500 ETF (quote: IVV) has an expense ratio of 0.04%, is offered commission-free on many brokerages, and based on some quick calculations, follows the official index to within about 0.5% returns. You're right that it's not completely "free", but the total "cost" is only about half a percentage point, meaning you can pretty closely follow the index in the long run with a single ETF purchase. I don't know what could be easier. :)
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Re:If you want to understand Silicon Valley, watch Silicon V... by clairity on Monday November 19, 2018 @04:33PM (#18489933)
it's not that hard (and there is no "the index", just various approximations of a market portfolio). vanguard is well known for low-fee, no-frills index investing (among other things). invest in one of their funds and you'll likely net over 5% over the long run.
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Re:If you want to understand Silicon Valley, watch Silicon V... by ikeboy on Monday November 19, 2018 @04:32PM (#18489920)
Quick search doesn't find an article making that claim, care to cite it?
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Re:If you want to understand Silicon Valley, watch Silicon V... by clairity on Monday November 19, 2018 @04:39PM (#18489965)
here you go: https://www.nytimes.com/interactive/2018/10/02/us/politics/d...

and sorry, i misremembered the numbers. he got over $400 million (at least) from dad, and that would be worth about $2 billion if simply invested in an index fund (according to the article).

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Re:If you want to understand Silicon Valley, watch Silicon V... by ikeboy on Monday November 19, 2018 @04:48PM (#18490023)
The $400M number is inflation adjusted already, the actual numbers are lower.

https://www.bloomberg.com/opinion/articles/2015-09-03/should... is a good critique of these kinds of calculations in general - they usually assume perfect market timing

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Re:If you want to understand Silicon Valley, watch Silicon V... by clairity on Monday November 19, 2018 @05:06PM (#18490145)
yes, but that doesn't matter. at the end, they estimate the current value from indexing to be about $2B.

the trump wealth transfer started over 60 years ago. over the long run, market timing doesn't matter that much.

(EDIT: and that opinion piece was not coherent; the author mixed up trump's businesses with his net worth, and convoluted other finance concepts to render his desired "opinion". it was awful.)

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Re:If you want to understand Silicon Valley, watch Silicon V... by ikeboy on Monday November 19, 2018 @05:14PM (#18490209)
That's just not the case - if you assume he bought in during a low point you'll get a much higher figure.

Besides, there's no claim that he was given anywhere close to $400M over 60 years ago, nor can anyone be realistically expected to invest their inheritance starting at the age of 12.

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Re:If you want to understand Silicon Valley, watch Silicon V... by cm2012 on Tuesday November 20, 2018 @02:04AM (#18492280)
Trump inherited most of it in 2000 when his mother died. He had money before that from gifts though.
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Re:If you want to understand Silicon Valley, watch Silicon V... by bluGill on Monday November 19, 2018 @04:19PM (#18489841)
> that rate of return is (roughly) less than 2% yearly.

Don't forget to factor in Trumps' heavy spending over those years which greatly reduces his rate of return. You could just as easily say that he is keeping his value level with respect to inflation and spending the rest.

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Re:If you want to understand Silicon Valley, watch Silicon V... by thwy12321 on Monday November 19, 2018 @05:50PM (#18490457)
The whole reason that the investment industry exists is because nobody puts that much money at risk in an index fund. Hedge funds literally exist for that reason. This whole idea that trump would drop his wealth in an index fund is propaganda, its meant to manipulate you about trumps incompetency.
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Re:If you want to understand Silicon Valley, watch Silicon V... by walshemj on Monday November 19, 2018 @07:54PM (#18491054)
With that much $$ Mr Trump should have done better than the index if he is that good.

And at least in the UK people and families that want preserve wealth actually run their own funds. There are a number of listed self managed Investment trusts (with low TER) based on preserving family wealth.

RIT Capital Partners is one example 12.6% pa for 30 years its base was Rothschild family money and there are others Much older.

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Re:If you want to understand Silicon Valley, watch Silicon V... by brianwawok on Monday November 19, 2018 @11:20PM (#18491770)
There are thousands of family funds in the US.
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Re:If you want to understand Silicon Valley, watch Silicon V... by walshemj on Tuesday November 20, 2018 @06:29PM (#18498849)
Publicly listed? ones or just a name for wealth managers
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Re:If you want to understand Silicon Valley, watch Silicon V... by cm2012 on Tuesday November 20, 2018 @02:09AM (#18492293)
According to actual tax filings, he inherited 600 mil in the year 2000 in the form of NYC real estate, which of left untouched would be north of 10 bil now.
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