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Comment by therealpeal | Hacker News Reader

A truly smart person will have a very impressive, convincing answer to this question.

Having a rich daddy is probably the largest influence in someone's chances of being rich themselves, at least in the US.

This is a common misconception. Most (balance sheet, not "appear to be") rich people are self made, and first generation rich. Kids of rich parents tend to just blow their inheritance away quickly.

This is a common misconception. Most of the self-made / "first generation" rich came from households that weren't poor to begin with. Bill Gates, for example, had a trust fund from his grandfather that gave him a cushion in case he failed. That gave some freedom for him to take calculated risks.

What you find is that you need the freedom to be able to take a risk and fail. If you come from a household living paycheck to paycheck and just barely scraping by, you start off with a very risk averse mentality and never really escape it. When the big opportunity shows up, if you were risk averse your entire life it is unlikely that you will take the shot.

https://despair.com/products/overconfidence sums it up best: "Before you attempt to beat the odds, be sure you could survive the odds beating you".

> Bill Gates, for example, had a trust fund from his grandfather that gave him a cushion in case he failed.

Do you happen to have a source? I'd not heard this and was curious as to the amount.

I haven't heard this before either, but I found this reference to millions of dollars: http://philip.greenspun.com/bg/

William Henry Gates III made his best decision on October 28, 1955, the night he was born. He chose J.W. Maxwell as his great-grandfather. Maxwell founded Seattle's National City Bank in 1906. His son, James Willard Maxwell was also a banker and established a million-dollar trust fund for William (Bill) Henry Gates III.[1]

However:

Several writers claim that Maxwell set up a million-dollar trust fund for Gates. A 1993 biographer who interviewed both Gates and his parents (among other sources) found no evidence of this and dismissed it as one of the "fictions" surrounding Gates's fortune. Gates denied the trust fund story in a 1994 interview and indirectly in his 1995 book The Road Ahead.[2]

So I'm inclined to think it's not true, although it does seem a fairly wide-spread story.

But at the same time, Bill Gates did come from a rich family, so he wasn't going to starve if Microsoft didn't work out.

[1] http://philip.greenspun.com/bg/

[2] https://www.cs.mcgill.ca/~rwest/link-suggestion/wpcd_2008-09...

Is the existence of a trust fund actually relevant for the story? Whether there was one or not, as you already said, Gates didn't have to fear failure. I doubt the family would have let him live in poverty on the street if he had failed. I don't think it changes the narrative. But it's bad that - if you are right - the wrong story is out there because it gives a convenient escape to get sidetracked and be able to ignore the actual message.

No single guy with no family to support has to fear failure though. It only becomes a fear once you have a wife and children to support - but that's why it's generally accepted that you first get financial stability before starting a family. Some people choose differently as people are always free to make terrible life choices - but they need to face the consequences then.

Even someone with a $1mil trust fund can make terrible enough choices to end up homeless.

You are very, very confused about what is likely vs. what is merely possible.

He discussed the whole plan with his family, and they agreed on it. Secondly, he studied in Harvard, so his family had at least decent amount of money by default.

And then, the thing is that family who was struggling the whole time, won't agree on dropping the best university with wonderful perspectives for some kind of crazy (at the moment it was very "crazy").

People are not "just risky" by default, they are influenced heavily by their life, and as someone mentioned here already, a lot of rich guys came from pretty decent living families, who can afford to fallback if something. For instance, a lot of world travellers, who try to live differently, actually have some passive income, property of just loads of cash, just in case something will go wrong.

No, only about 10% of billionaires are self made, as in not having inherited wealth or come from wealthy families. And even this is a record high up from a more typical 3%. (and remarkably, these are numbers that forbes feels excited about)

http://www.forbes.com/sites/afontevecchia/2014/10/03/there-a...

>In 2004, we had 59% of the Forbes 400 having made their own fortune, as opposed to 41% who inherited it.

Quote from your own source...

The article explains that they rank the level of "self-made-ness" out of 10, with 10 being from a poor family with no advantages. Then it says " A total of 34 billionaires, or 8.5%, scored as 10s".

So given 10 possible rankings, it is pretty well distributed then?

Well distributed for what metric? Their backgrounds clearly don't match the normal population, since the normal population isn't 7% billionaires.

There is a good correlation between the wealth of the parent and the wealth of the children in many countries, including the US.

In economics this is called "social mobility" and it is measured to analyze the success of economic and social policies, whereby, generally, it is considered that having a high social mobility index is a desirable thing in a country. That's because a country with high social mobility is a country where the American dream is happening more often...

Social mobility works both ways: in a country with high social mobility, it is more likely that a child will be much poorer, or much richer than the parents.

There is a paper by the OECD analyzing by how much different factors (family wealth, education, etc.) affect wealth of children across different countries: http://www.oecd.org/centrodemexico/medios/44582910.pdf

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

Maybe a rich person has the answer ? :)

Breaking HN policy to say this is the correct answer to this question.

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