Are the Self-Made Rich More Generous Than Heirs? | Hacker News Reader

Are the Self-Made Rich More Generous Than Heirs?

blogs.wsj.com

34 pointsgatsby10 comments

I love it how the photo on that page is that of David Rockefeller - someone who inherited the money and yet did a lot of charity.

Reminds me of the story behind my favorite Rockefeller quote. "Everything that is watched - improves." - John D. Rockefeller.

John D. Rockefeller had a rule that he passed down to his kids: donate exactly 10% of all your income to charitable causes. Not 9%. Or 11%. But exactly 10%.

What this did is made sure that the Rockefellers kept "track" of each and every penny that came in. Because they watched over their money, it grew.

I suspect there is a different mindset between those who made most of their wealth and those who live off other peoples wealth.

When you inherit money you make on average ~4% over inflation before taxes each year. Give away 1/2 and simply have less money every year for the rest of your life. When you build wealth you are used to making far more than that every year. So giving away 1/2 and you think "I could get that back in a few years." (Not that they can, just their past performance leads them to think this way).

I find the very concept of "more generous" has nothing but ugly implications.

And I'm a person who agrees with Gates' larger position on the wealthy benefiting more from society and thus owing more. I just think that the extent to which society can ever expect people to contribute back, is the extent to which we set via tax rates [1].

Anything over and above that amount is generosity and should be celebrated. Not calibrated and criticized.

Trying to encourage more generosity is fine. But trying to use a guilt trip like this, just sounds petty, ungrateful and a bit like a dick-waving-statement when coming from those who self-identify as more generous.

If society wants to discuss what the rich ought to pay, that is a discussion about taxation. Targeting generosity is not a civil way to have that discussion.

[1] I don't consider charity-as-tax-break as generosity. I consider that alternate taxation. But the moment someone goes over that amount though, I think you should leave any discussion of their level of donation at "thank you for the donation".

> And I'm a person who agrees with Gates' larger position on the wealthy benefiting more from society and thus owing more. I just think that the extent to which society can ever expect people to contribute back, is the extent to which we set via tax rates [1].

If someone is a billionaire and they do not voluntarily give away any money, they are a despicable person plain and simple. Not because they don't meet my qualifications for how much to give, but because their reaction to having enough wealth to last a thousand lifetimes is to do nothing positive for the lives of others, That just makes you a disgusting person in my mind.

This may just be me, but the article did not answer the question at all. At the end, the author basically washes his (her?) hands of the question and says that there is no reliable data to make a decisive statement.

So, I'm not so sure about Bill Gates' statement about the "noveau riche" being more generous. Maybe at the billionaire level, but what about the measly millionaires? Are they also generous? Also, what kind of charities do they give to? Giving money to their alma mater to build a statute or to name a building is quite different than what Bill Gates is doing.

This is a quote from a HNews submission a couple of days ago:

"'A lot of wealth holders were very sincerely concerned about others and were doing something about it.' His recent papers, many co-authored with John Havens, the associate director and senior research associate at the center, have done much to exonerate the rich from the charge that they are more tightfisted than the non-rich. (They’re not, Schervish and Havens say: as individuals move up the wealth scale, they give away a greater share of their assets.)"

HNews discussion link: http://news.ycombinator.com/item?id=2364922

I don't know how relevant it is to generosity that the rich give away a higher percentage than the non-rich. Gates and Buffett could give away 99% of their earnings if they wanted to. If I did the same, I would be more in need of charity than those I was giving to. It would make more sense to deduct an amount similar to the "consumption allowance" in sales tax proposals to account for manditory or quasi-manditory spending like food, shelter, health care, etc, and judge only income above this level.

Another factor is probably timescales - if your family has been wealthy and powerful for the best part of a thousand years (which isn't that uncommon in places like the UK) then the primary concern is to pass that wealth and power onto the next generation.

Any self-made rich people I've met are rich for one reason and that reason is they don't spend one cent more than they have to for anything, every penny they make they hold onto for the rest of their lives.

I would say people who inherited wealth would be far more generous since they have no real connection to the money in some cases such as lottery winners or someone who made a lot on the stock market.

Rich people in general just going by percentage of money spent are more frugal either by choice or just the nature of having so much money any object bought costs so little. The average Joe spends more than his entire year's salary on a car, the same for a house nearly more than a lifetime salary for some. Smokers and drinkers may spend 1/3 of their yearly salary on smokes and booze.

That's so obvious.

Reply on news.ycombinator.com