Why People Don't Get Wealthy
calacanis.com
calacanis.com
- investing time in things that ultimately do not pay off
- taking risks
- lots of small poor choices that add up
- bad luck (yes, to some extent you can make your own luck but sometimes things are outside of your control)
Honestly I find his list pretty poorly thought through, especially in comparison to the recent blog post by Sam Altman: http://blog.samaltman.com/how-to-be-successful
However, people generally are poor at calculating probability combined with risk/reward and simply make bad decisions.
And sometimes, all choices lead to bad outcomes.
What?! So going through a green light and getting hit by someone going through a red is a bad decision?
Getting cancer is a bad decision or bad luck?!
Yes, sometimes other people will cause you harm. Could you have avoided it, probably not as you can't always predict the future.
How you move on from a bad situation is your decision. Wallowing in self-pity because the world has done you wrong is a good way to never succeed.
As an aside: your chances of getting a particular cancer can be affected by your lifestyle choices so you can make better decisions to avoid it.
I agree with this but it doesn't have to do with luck. You could pick yourself up and keep going after a stint of bad luck but if you continue to have bad luck then you will still have a hard time succeeding.
At the same time as this pessimism has permeated America, a global, friction-free marketplace for services and products has emerged that anyone can tap into: the internet and mobile phones.
This network is not only available to all, it also hosts the keys to the kingdom, with every single skill and clever strategy for building these products and services unlocked, for free, for everyone, on YouTube, Coursera, etc.
That's the disconnect I'm concerned about... so many people in America are giving up on the American dream, while other countries are copying it (i.e. China).
Sociologist who studied average outcomes, successes and failures. Also, an independent person not personally invested in making oneself sound as awesome. Also, someone not having personal interest in changing how other people act for own benefit.
Obvious example: If 10 people takes same risk and 9 of them ends up super poor and 1 super rich, then the risk taking philosophy wrote by the 1 will be significantly different then the one that takes into account also those where risk part happened.
I assume people who believe wealth and success of individuals can be explained by predictable qualities or behaviors of that person have simply never met a rich person in their life.
And you don't believe a "winning group" would hold its own biases?
There are plenty of people who could build wealth on the average salary in the US if they were on a budget, were reasonably frugal, and in general lived like our grandparents did say 1950-1970 or so.
I have relatives on one side of my family who are all on relatively low incomes, but they make terrible financial decisions. When my uncle retired he sold his house, moved into a bungalow and gave the difference in price to his sons. They all had mortgages and children, but instead of saving it they all spent big on new cars and big holidays. It seems to be a bit of a pattern. My wife and I are considerably better off, but in many ways we live far more careful and frugal lives.
Taking entrepreneurial risk is a choice, and some people do succeed and build huge businesses employing thousands of people that way. Also those that succeed tend to be very smart and hard working, so the choices they made clearly contributed to their success, otherwise being smart and choosing to work hard would not have made a difference.
Conversely I have generally taken the safe road in my career, while still being willing to move on when the time was right. This strategy has served me well. I've seen others takes risks I would not have, for some it worked out well but for others it was disastrous. For example a friend had catastrophic health problems, but he was working as a contractor so it was financially disastrous too. If the same had happened to me, I was on a very generous benefits package and I and my family would have been well looked after.
Individual choices really do matter. Sure you can still be hit by a bus, but most of the things that happen in our lives are tractable to mitigation strategies. Conversely luck certainly can be a factor in success, but even when it is you still need the sense to recognise it and take advantage of it, and that can often involve taking calculated risks.
An owner's income doesn't necessarily scale with effort. Instead, it scales with impact (not necessarily theirs, either). An owner can make a decision or do some work and get exponential rewards. Or someone they employ can make a decision or do some work, and the owner can get exponential rewards. An owner can also completely stop working, and by virtue of being an owner still reap the rewards.
Employees on the other hand don't have this leverage. Your income basically scales with effort. Working hard or having a huge impact can get you a promotion and increase your income, but only a little. You won't get a million dollar bonus by earning the company a million dollars. Importantly, if you stop working, you stop earning (this is a big roadblock for many people who do want to try starting their own business, people who want to be an owner).
Besides aptitude and opportunity, the economy wouldn't function if everyone started their own company. Many things truly do need teams working together to get things done. Perhaps we should be talking about how to reward workers in a way that scales with their collective impact rather than their effort.
> Conversely, if we pursue free services and money we will drive more power into the hands of a larger and larger incompetent government, and I think we know where that will end up — and it won’t be great for anyone.
Sure you can just state this, but no one has to buy it. My government has more than adequate at providing "free" healthcare to everyone, and it's pretty stupid to broadly dismiss that like it "won't be great for anyone". It's actually great for everyone. "Incompetent government" is a pernicious anti-social idea. Modern governments have a myriad problems but Government itself has proven its competence over and over again at addressing very difficult societal problems.
> Entrepreneurship has created the greatest gains in our standard of living to date, even if it’s hard to grasp the wild polarization of wealth in society.
You can sub in one of [Capitalism, Entrepreneurship, Western Civilisation] in this statement, and find it repeated over and over again like it's self-evident. Many "greatest gains" in our society had blatantly nothing to do with Entrepreneurship, take for example the Civil Rights movement, which certainly contributed greatly to overall standard of living. The Capitalist model can't slap a dollar figure on that though, so let's just ignore it.
Overall this piece is so confidently slap-dash I don't think Calacanis is actually listening to or reading any of the best opponents to his world view.