I don't disagree with you but want to add some insight to this... My entire life I've been told the lie that if I "just work harder" I can be rich etc. Most of America thinks about themselves in this same way, and it's taken me years of traditional employment + risky startup opportunities to realize that no, success is not guaranteed if you "just work hard"... Honestly you just get nailed with the majority of work as an IC who's trying to crank it out vs. your peers who are off having "dev beers" at the trendy bar down the road.
The peers that I see that are "well off" often had huge monetary injections from their parents in either fully-paid education, first houses, vehicles, incestuous "investments" in their business, etc. Now, those same people that had everything handed to them on a silver platter are invested, some own rental properties, etc. to the point that they can choose not to work for long periods of time to just collect dividends/rent. Funny part - they still define themselves as people who have pulled themselves up by the bootstraps!
So yea - in the US we have a really unhealthy view/mentality around success and ignore the fact that the IT'S THE EXCEPTION for someone to truly "pull themselves up by the bootstraps" into any sort of significant wealth. Truth is most "rich" people had an incredible amount of external financial support and stability to get themselves there and maintain it.
Bring the downvotes, because you're darn tootin' I'm bitter about all of this.
Available effort could likewise vary. For example, someone with a disability might have much less effort available or their effort may be significantly less efficient. Someone who has to expend a great deal of effort on other matters (e.g. providing for basic needs, self protection, caring for others, etc.) may have less effort to expend towards things like career advancement or education.
The argument as I see it is that a person expending a roughly average amount of effort should be able to achieve a reasonable quality of life with the luck and opportunities that are available to them. (There will of course always be some variance in the effort required and the outcome received, but that's fine as long as it stays within a reasonable distance of this goal.)
The increasing anger over inequality seems to me to be because people are being asked to give above average effort (e.g. working multiple or demeaning jobs) in exchange for a low quality of life (e.g. difficulty affording healthcare, housing, retirement, raising a family, etc.).
And what does this have to do with whether a lot of effort and a sense of opportunity is available to the common person?
[1] https://markets.businessinsider.com/news/stocks/ranked-the-s...
Spending as percentage of GDP: Denmark - 52% of GDP Norway - 55% of GDP Finland - 53% of GDP Sweden - 50% of GDP Iceland - 42% of GDP
Average - 50.5%
USA - 22% of GDP
What does all that extra spending get them?
Poverty rates: [0] Denmark - 13% Norway - Not reported Finland - Not reported Sweden - 15% Iceland - Not reported USA - 15%
Unemployment rates (2017): [0] Denmark - 5.7 Norway - 4.2 Finland - 8.5 Sweden - 6.7 Iceland - 2.8 USA - 4.4
Household Incomein US dollars (2018) [3] Denmark - $34,712 Norway - $39,555 Finland - $34,497 Sweden - $34,301 Iceland - Not reported USA - $50,292
Household Debt as % of disposable income (2015-2018): [1] Denmark - 281% Norway - 239% Finland - 145% Sweden - 189% Iceland - Not reported USA - 105%
Household Net worth as % of net income (2014): [2] Denmark - 553% Norway - 318% Finland - 359% Sweden - 526% Iceland - Not reported USA - 601%
[0]https://www.cia.gov/library/publications/the-world-factbook [1]https://data.oecd.org/hha/household-debt.htm [2]https://data.oecd.org/hha/household-net-worth.htm#indicator-... [3]https://data.oecd.org/hha/household-disposable-income.htm#in...
Also should comparing the spending numbers take into account that healthcare, schools and universities are paid by government spending in the Nordics and not from household income?
Honest questions, I'm really interested in these differences between systems.
Your number likely includes State, Regional, and Local spending (which was presumably excluded for all nations in my numbers).
Even with the 33% figure, for the US to make up the ~15% difference would require ~3 Trillion in annual spending.
The existence of Social Healthcare programs in those countries is a huge chunk of the difference, I'm sure.
This link provides more detailed information: https://www.irp.wisc.edu/resources/how-is-poverty-measured/
“ The Census Bureau determines poverty status by using an official poverty measure (OPM) that compares pre-tax cash income against a threshold that is set at three times the cost of a minimum food diet in 1963 and adjusted for family size.”
Regarding my definition in the previous comment, I’m unable to find my original source. Sorry.
I can spend an extra 20k as well or poorly as I like.
> They don't seem to be in more poverty
They're clearly not 'more in poverty'. The point is that they spend (the US equivalent) of Trillions of dollars per year for comparable outcomes.
>They're healthier, more fit and highly educated.
This is a matter of culture, not economics. The US already spends more per pupil than all of the 'top 5' nations, with worse outcomes. [0]
https://wtfhappenedin1971.com/
https://www.ineteconomics.org/perspectives/blog/how-why-gove...
Now that we've addressed your off topic question. Could you please try to explain how hard work and a sense of opportunity is not available to the common person?
Not everyone can start a machine shop with their dad, or own or even operate a taco restaurant. You need to be at the right place, the right moment, have the right amount of money and or the right equipment, interests and skills. And only then your sense of opportunity and effort will take you places.
For the common person it's a lottery just to be allowed to play the game.
If you flip that around, you get "Anyone, anywhere, any time, with any amount of money and any (or no) equipment, interests or skills should be able to be start and own a successful business." Does that really sound like a reasonable expectation?
Gimme a break man.
https://www.lendingtree.com/business/small/how-to-finance-a-...
I think that would be out of reach for many if not most Taco Bell managers. Presumably it would be even harder in parts of the United States with higher costs of living.
VC is not the norm. It is very much the exception.
> The cost of opening a new Taco Bell restaurant is between $1.2 million and $2.6 million. Taco Bell also charges a $45,000 franchise fee, an ongoing royalty fee equal to 5.5% of gross sales, and a marketing fee equal to 4.25% of gross sales.
https://www.businessinsider.com/what-it-costs-to-open-a-taco...
Give ME a break man. LOL.
1. I read tinco's comment to state (paraphrasing): "it is difficult to start a business, and for the common person it is a game of chance." Which, I absolutely agree with when I measure it against my life experiences/knowledge.
2. You replied with two questions, also paraphrasing: "It's a lottery to work at Taco Bell?", and, "And assuming you do work at Taco Bell, that you would become a manager who could save up to own their own store?"
---
Given that scope of the conversation, I assumed you were positing that someone could seriously start working at a Taco Bell, start saving their money, and then some day afford their own franchise location.
The first question of 2 is an absolute possibility, ie: it is not a lottery to work at Taco Bell and it would be silly to assume otherwise. That may have confused me leading into the second question, asked rhetorically, as something that you deemed possible. This is to say, "A person could absolutely work at Taco Bell, and they could also save to own their own some day."
The "Gimme a break man" in reply to someone saying something that I deem 100% rational (#1) with two rhetorical questions that seem to paint the situations that they posit as rational possibilities confuses the crap out of me.
Simply put: You submitted two arguments, seemingly painted as possible realities, in an adversarial way to something I saw as a rational and relevant statement. I fired back thinking you thought that was possible because there's not much context to figure otherwise.
If I confused your comment I apologize.
Quick Edit: When I posted this reply I saw another person, harimau777, answering similar to myself with another credible source (also with a much higher caliber quality of language - I'm goof sometimes). What I'm trying to say is I'm not the only one who took your statements this way.
The response to that was, "Well, just a lottery winner" with no argument whatsoever. How can you have taken that seriously?
Step one: arrive in the United States as a child.
Step two: a childhood of grinding poverty.
Step three: make tons of money in STEM.
It happens with extreme regularity. It is the rule, not the exception.
Ok - maybe I’m exaggerating a bit. I’m sure some of them don’t “make it.” Someone is staffing those food vans.
But it’s not unusual either.
Positions once available to anyone who worked hard, are now reserved to the children of the already wealthy. The consequences are severe.
85% of American millionaires are self-made.
"The Millionaire Next Door" by Stanley
In the 24 years since that book's publishing I absolutely argue that ladder has become more difficult to climb. But hey - what do I know? I'm just a lazy millennial who's now living through his second major recession, with the first one landing directly on when I was entering the work world FT. Thank goodness for my tech career because let. me. tell. you... my peers were struggling. Especially the ones who persisted in Cedar Rapids (blue collar Iowa town).
But sure - 85% of American millionaires are "self-made", whatever the heck that means. I don't doubt that's how they feel about themselves and self report!!!
I read that book when I was in my early 20's. I followed all of its advice, which basically comes down to "live below your means, save, and invest." The truth is I was already following it anyway. My parents lived below their means, and my dad taught me about investing when I was a teenager.
Every generation has recessions to deal with. By the time I was in my mid 30's, I was, indeed, the millionaire next door, though just barely. This was despite the dot-com crash and the great recession...
I'm surprised nobody's come along yet to tell you that you're not self-made because you had parents and they taught you about investing.
My definition of "self made" is not important, my point is that everyone's definition is going to be different.
Here's the thing - I have no idea who you are, what your history is, and I can't make a single comment on the validity of how you got from point A to point B... that is outside of the above compliment really.
What I will tell you is that my anecdotal experience is that no one is out there admitting, "OH YEAH, my parents totally dropped $120k on my education, bought all of my cars, paid my rent, and gave me a free-reign credit card into my 30's." and ironically... I've ran into a TON of those people who self-identify as "self made" which is why I don't take the term seriously and see it as 100% subjective.
TLDR: "self made" is subjective as all heck. I can't comment on your life man - I have no idea who you are. I stand by my original comment that things are getting more difficult in regards to building wealth from nothing. I got snarky against a comment that seemed to just posit a book from the 90's as the entire content of a reply as if that's valid to any conversation.
What if I tell you that my parents did pay for my education? And they gave me a car when I was 16? Or they were fortunate enough to be able buy a computer when I was in elementary school, which definitely contributed to my interests today, many decades later? Am I still self made? Or did that give me too much of a "head start" so I'm not? Was it so long ago now that it doesn't matter?
TLDR: I agree, it's all subjective...
I'd personally say, me too in so many ways... I had my struggles with an early death in the immediate family but it did provide the money to support me into my early start!
Here's the thing - struggle or not I absolutely have been around poverty and have actually done a bit in advocacy in the area. I don't say this for a gold star - just to qualify what I'm about to say.
Being poor is hard. Like really hard. It's expensive in sooo many ways and I freakin' wish more of us had empathy for those people that are struggling in that situation. I see WAY too many folks on HN that are comfortable in highly-paid positions like myself that don't acknowledge these things and even sound angry in regards to how people are "suppose to be"... lemme tell ya... as someone with struggles - man sometimes it's really really hard. Even with some of the insane privileges that I've been afforded.
All-in-all ... I wish more people admitted "man I had a lot of help" regardless if it's a computer in elementary school, or investments in education, etc. I know this has a negative "SJW" spin to it these days, but man... I have been privileged. holy crap I've been privileged. Doesn't diminish my accomplishments, but we need to come to terms that as a society everyone should have as equal of a playing field as possible..!
Besides, I heard the same lament in the 70s, 80s, 90's, 00's, and 10's.
> I don't doubt that's how they feel about themselves and self report!!!
Always better to guess than pick up the book and read it!
My point is that "the market did great" means investors did great; doesn't mean that everyone did great.
> The market has done even better in the last 10 years than in the 90's
is an adequate response to address the GGGGGP's claim that
> that ladder has become more difficult to climb. But hey - what do I know? I'm just a lazy millennial who's now living through his second major recession, with the first one landing directly on when I was entering the work world FT.
Nobody here is denying your claim about the market performance.
e.g. started own business, vs savings + stock market, vs investing in real estate.
But when you weigh by total wealth the Walton and Mars families skew the data in favor of nepotism. It also depends on your opinion of source of personal wealth of Ms Bezos or Ms Jobs (and anyone in similar position) - nepotism or self-made?
Evidence would be nice to have though.
As for me, I've had enough anecdotes to think it's plausible. Just recently we hired a new CTO at my company, and he got the job simply because he was friends with our CEO and he needed a job. Turns out he's completely incompetent...
Most books don't pan out and if I don't turn myself into a marketing personality good luck. I say this as someone who's marketed books professionally as a web product across all major publishing platforms. I'm a nobody and prefer to focus on my engineering.
> teaching
Sure - because there's tons of money in teaching? Uhhh...?
> consulting
I've made a killing here and am likely going into my next 1099 tomorrow so yea. No arguments here. It DOES take a solid network though to do consulting so if you're not sociable you're likely screwed in this arena. I have two sales people who are my guardian angels hawking my services for top-dollar so I'm incredibly blessed in this department.
> bootstrapped SAAS app
Currently working out licensing with two corps on one of these myself as well. Finding the foot in the door for industry, then collecting user data on problems to solve, then pushing through solving them, and then gambling on the problem you solved is INCREDIBLY risky.
Plus - if you're the startup engineer things fall near-100% on your shoulders unless you're willing to play the outsourcing game. Which I have and my god that's a FT job itself even for the most menial of applications.
---
All-in-all I am actually the guy who pulled myself up by the bootstraps to probably 10x what my parents made in small town Iowa. So yea. But all of my original comment absolutely stands. It was hell on earth and I worked my entire 20's away hustling my BUTT off to get out of the trailer park and out to California.
I still absolutely posit that my story of "just pull yourself up by the bootstraps" is the exception and shouldn't be sold as "anyone can do this if they work hard enough!!!" Most people can't.
Your list makes it seem like those things are easy - and as someone who has experience in them (minus teaching)... it absolutely isn't. Those are all serious endeavors that take time, commitment, failure, getting back on the horse, and ultimately years of pursuit/work.
That's exactly what the stock market provides an opportunity to do.
Middle-class America seems to have a particular disdain for the less well off.
This divide is the driving force behind Trump. It's the same divide we're seeing play out now over reopening the economy. Suburbanites with cushy WFH jobs, chastising the poor who have been laid off, as they have the audacity to want to put food on the table tonight.
Hell as someone who's struggled early-on... Poor America seems to have a particular disdain for the less well off too. I feel like I'm constantly surrounded by entitlement regardless of the person - and I'm no better as I am constantly trying to quash my own crap attitude with this... We were brought up this way across the board, to the point that I'm convinced childish entitlement is in our DNA as a country.
It's just a whole bunch of finger pointing while ignoring the elephant in the room... but hey people seem to get off on the hate so the folks in charge keep us divided and subdued to their interests.
Not disagreeing - just my own take being exposed to many diverse backgrounds rich/poor, rural/metro, etc etc. Everyone wants to point a finger because it's MUCH easier than acknowledging difficult societal problems/self-reflection.
After WWII the situation basically got reversed: Europe experienced such a shock and disruption to the existing social order/redistribution of wealth etc., that it went really left-wing/"social democratic". In the meantime, the US saw a greater and greater concentration of wealth and the division between the rich and the poor got increasingly stark, and social mobility is much worse than that in, say, Northern Europe. The American Dream as people knew it is pretty much dead. This is also one huge reason behind the polarization in politics that we see nowadays.
Unfortunately, a lot of narratives in the US don't seem to realize/willingly ignore this situation and still seem to talk about the old idea of "bootstrapping" and American exceptionalism in this regard, which is really kinda one century out of date already.
This is open to anyone, but of course it's not guaranteed. You have to put yourself in a place where you're more likely to encounter these folks, and demonstrate value.
It might also be the reason social democratic/socialistic parties never got a foothold in the US post world war 2.
That's true, but I have no idea where it came from. "The American Dream" was never about becoming a millionaire, it was the idea that you could start with nothing and have a nice, comfortable middle class existence in the US.
I can't speak to everyone, but my parents are children of the 50s and their idea of the "American Dream" was the nice house in a safe neighborhood in the burbs.
Thanks to inflation "millionaire" doesn't mean as much as it used to. Billionaires are a completely separate class though.
Probably more a factor of where you came from, who you know, etc.
Obviously it's situational.
from https://medium.com/incerto/inequality-and-skin-in-the-game-d...:
These stats just backup what I've always heard - the top 10%, 1%, whatever, is not static. Neither is the bottom 10%. Many people usually start their careers at the bottom (i.e. college student working part time) and then eventually make it into the middle class and plenty make it further than that. Of course, some never make it out of poverty.
The biggest problem is data. It's not that great.
These types of debt typically have low interest rates. Market returns for the past decade have exceeded the interest rates. Paying the minimums, and investing the difference? The consumer would be ahead. 12-15% YoY stock returns compound faster than 4% mortgage debt.
[0]: https://www.experian.com/blogs/ask-experian/research/consume...
Not all debt is equivalent: credit card debt and payday loans are examples of pretty punitive debt that really should be avoided. The return on investment from paying off debt is roughly equivalent from the interest on your debt; if it's lower than you can get by investing elsewhere, then it may make sense to invest elsewhere, especially when you factor in second-order effects like tax laws.
[1] For the record, I think the tax-advantaged nature of debt is absolutely inane and should be removed. But that is unlikely to be politically feasible.
Everything you've said is wrong. I don't know what you mean by "getting in after all the really wealthy get in"... VCs, IPOs? That's not even close to necessary. Investing in simple index fund ETFs is fine. And "all the investments with minimums in the thousands"? Well... don't buy those! Again, buy simple index fund ETFs. Most brokerages don't even charge a commission on that, so you can easily add small amounts each month.
People just don't seem to know that investing in the stock market is easily done, and so extremely worthwhile. Income inequality being what it is, the wealthy will probably own more of the stock market for a long time (or always), but that 84% could easily come way down if people just knew what to do!
But I feel like your comment is counter-productive fear mongering that will turn off people on the margin, thinking everything is stacked against them, the "good" investment opportunities aren't available, and so they just shouldn't even try.
That's a fact of the US system.
> I don't know what you mean by "getting in after all the really wealthy get in"... VCs, IPOs? That's not even close to necessary.
That's a strawman. What's necessary, isn't the subject.
> And "all the investments with minimums in the thousands"? Well... don't buy those!
The wealthy have more opportunity, got it. Pointing to some other instrument, saying "it's also good" is not a correction.
> Everything you've said is wrong.
If you find yourself saying this, you're probably about to say something stupid. It's trite nonsense.
The reason VCs and hedge funds get in early is because they can afford to fail a lot and have their successes outweigh their failures. It isn't because of some caste gatekeeping to monopolize the wealth while twirling their moustaches but because without that level of capital it is a very good way to lose your life savings. First rule in investing is never risk what you can't afford to lose.
My point wasn't that people shouldn't invest, it's that previous poster suggested everyone investing would "chisel away" at the "86% number," and my general presumption is that so long as the return on wealth is nonlinear to the quantity of wealth, as enabled by the ability to access more expensive/specialized/higher-return investments, it's a lost cause as a simple comparison of function order and rate.
If those who are already richer are likely to have a higher rate of return from greater levels of access or unique opportunities and that rate of return compounds non-linearly, no matter how many regular people invest it's still basically comparing functions with nonlinear differences in rate of increase.
It can't handle Bitcoin, space rockets, jordan peterson, self driving cars, hyperloop, neuralink, starlink, ect. There's huge and reliable money to be made riding the flame. Or rather there was, it's all about to be flooded out and those of us who don't like being formless, liquid money & stock chasers will have to wait for the next desert to appear in fifteen years time.
Are you so sure that they don't get this? I guess that many do understand it and either would like a much more inequality-reducing tax structure, or envision themselves as (somehow!) becoming part of the top 10%.