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pohl

What percentage of entrepreneurs are wealthy?

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What percentage of entrepreneurs are happy?

Could HN have a feature that lets me sacrifice my karma to give extra up-votes to a comment?

That's actually a much more interesting question.

Nobody's happy in this town except for the losers. Look at me, I'm miserable, that's why I'm rich. -Ari Gold

Take away their money and see how happy they are.

”Obsessions Make My Life Worse and My Work Better.”

Think this quote can be attributed to this artwork: http://www.segd.org/design-awards/5200/5223.html

What percentage of people with negative net worth are entrepreneurs? I would get it would approach 90%.

This is most definitely not the experience I have had when doing volunteer financial counseling. (I ran out of ways to say "If your take home pay is $4,000 and your "absolutely mandatory" expenses are $5,000 then you will lose.")

That's sound advice. Maybe you could do government counseling too.

Actually this is exactly why people borrow money from banks. The trick, of course, is to know that your income will at some point rise to cover the cost of borrowings.

Four easiest ways to have a negative net worth:

1. Borrow a lot of money for a college credential. (Bonus points for going to grad school.)

2. Borrow a lot of money for a house or home improvements.

3. Borrow a lot of money to start a business, using loans that are personally guaranteed.

4. Accumulate credit card debt by spending more than you earn each month.

Any other methods I missed?

Be unfortunate enough to get seriously ill without medical insurance.

Get seriously ill regardless of what kind of medical coverage you have. My ex was career military. We had very few medical expenses -- the occasional pharmacy copay for items not carried at the military hospital (items on base were dispensed free). My health crisis still created financial problems.

I guess 5%. That is the success rate for businesses.

What I would like to know is how the other half got wealthy.

FTA:

- Only 16% of high-net-worth individuals inherited their stash (high-net-worth = USD millionaire)

- Another 23% of the world’s millionaires got rich through paid work

Inheritance.

There is a page by Phil Greenspun about how even Bill Gates only became rich by having rich parents (I'd post a link if this stupid cell phone supported copy and paste, so I must rely on your google fu instead).

Here's the link: http://philip.greenspun.com/bg/

You must consider too that many entrepreneurs start several businesses through out the course of their lives. For each attempt, an entrepreneur would increase his/her chances at attaining wealth by 5%, no?

Well, if you wanted to be a real geek about it, given n attempts, your chances of a single success are 1 - (.95 ^ n)... but I'd also like to think that an entrepreneurial endeavor is not pure chance.

> I'd also like to think that an entrepreneurial endeavor is not pure chance.

Agreed, I don't think you'll ever succeed in your business attempts if you're not providing something new, original or just not established in the area. You'll make a killing opening a coffee shop in a moderate sized town - as long as there's not 3 Starbucks already there.

There's a lot to business beyond the idea, hence it's important to be a businessman once you've succeeded your entrepreneurial dream of getting a company started. You don't want your company to fail just because you fucked up and didn't file your taxes.

So, one needs just about 13.5 attempts to attain 50% chance of single success:

http://www.wolframalpha.com/input/?i=0.5+%3D+1+-+%28.95+^+n%...

No... not if you are implying this because of a 95% failure rate, your odds improve with each attempt. Statistics have no memory. You are statistically part of the same group every time. You don't increase your chances of flipping a "heads" on a fair die by flipping tails first. The odds stay at 50%.

That's not to say that multiple attempts at starting profitable businesses won't teach you things, and increase your chances of success, your chances of picking the right strategy out of the gate, etc - but there is no simple "Hey if you list yourself as "entrepreneur" and keep trying, you'll end up rich.". Many people just end up wildly in debt and failure.

It's also not useful to take some aggregate 5% of businesses succeed so I have a 5% chance. Some business lack the talent, idea or plan to make it and have a virtually zero chance while others are way on the other end.

Worldwide? Honestly, cronyism explains a lot. Carlos Slim, and virtually all the Russian oligarchs, are as rich as they are because they knew the right people when vast parts of the economy were "privatized" right into their hands.

I would guess hard work and working up the corporate ladder to some executive position at some big company.

Or someone working in finance and putting on risky trades which yield in massive bonuses.

If 1 million people take a large risk, which has a 5% chance of making them a millionaire, then we'll end up with 50,000 millionaires.

What is really interesting is what they did differently, if anything.

There's an Italian saying which goes something along the lines of "There's three ways to get money: You can marry it, inherit it or steal it".

I suspect that accounts for a lot of the other half, especially if financial services counts as stealing.

> What I would like to know is how the other half got wealthy.

I know people who are typical labourers (both white and blue collars) who saved money and invested and got pretty wealthy like that.

And of course, there're more blatant ways to gamble.

That would be hard to tell due to a common issue of confirmation bias. eg during the WorldCom era, there were a lot of wealthy entrepreneurs.

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