> Computers were expensive in those days and it took me years of nagging before I convinced my father to buy one, a TRS-80, in about 1980."
Based on a quick search, the price was probably about $1200-$2000 inflation adjusted dollars.
I grew up in probably a similar environment, my dad was also a physicist, and I also had access to computers from a young age, and I was encouraged to explore interests in technology, science etc, without pressure to make sure I found a successful career. Over time I've realized that paradoxically, a culture of not valuing money/success is actually a marker of being upper class, because 1. You are quite likely to succeed even without any specific plan if you are well educated 2. The risk of financial ruin is not the same if your friends and family are financially stable enough that if worst comes to worst you would always have a place to sleep.
Because this safety net does not involve any assistance except in the darkest timeline, it's very easy to forget that it exists as an invisible insurance that not everybody has. I wish everyone did.
[1] http://www.paulgraham.com/work.html
[2] http://www.paulgraham.com/credentials.html
[3] https://www.fool.com/retirement/2019/12/18/the-percentage-of...
My sense is still that pg's intellectual background was more significant than this factor, but that's based on my own experience. Even though my upbringing was at the poorer end of the middle class (raised by a single mother who was a nurse), I didn't grow up risk-averse—and I also got the computer (a better one than a TRS-80, and totally not appreciating what my mom must have sacrificed to buy it). What I lacked was intellectual relationships or mentorship of any kind.
I think what you are calling intellectual background is a part of what is normally called class. Usually these sorts of things are correlated together, although as you point out, it's a trend, not a rule. PG also comments on this himself [1]:
> Closely related to poverty is lack of social mobility. I've seen this myself: you don't have to grow up rich or even upper middle class to get rich as a startup founder, but few successful founders grew up desperately poor.
Above the first threshold, when you completely run out of money, your family sets you on your feet. Might move into the basement, might get some grudging bailout money, but you get made whole. Below it, you're homeless.
Above the second threshold, your dad or one of his golf buddies spots you $50k on good terms to launch your first business.
Looks like pg was comfortably above the first threshold, and well below the second.
The proliferation of high-yield checking accounts in particular has significantly reduced the use of savings accounts for a lot of people who have quite a lot of "savings".
I keep seeing people cite scary-looking numbers like this (the other good example being the "half of Americans don't have $400 in cash on hand", which is ... not quite true; see https://www.politifact.com/factchecks/2019/apr/19/kamala-har... ), but each time I dig into the actual data it turns out the actual question asked was not what people seem to think it was and the answers don't mean what they seem to mean, in the context of the actual question.
I really don't see how the article you linked disagrees with this basic conclusion. See the graph: https://static.politifact.com/politifact/photos/Kamala_scree...
People would need to go into debt in order to pay it (only 19% said they could pay for it by "selling something", which might be selling equities, but probably includes pawning personal possessions). IRAs or 401ks are not liquid. And neither is home equity, for that matter. So I would say that half of Americans not having the savings to pay a $500 expense is accurate, even though calling it a "complete upheaval" was not.
Even if you include non-liquid assets, the average person isn't doing so great. For example age 35-44, median net worth is $91,300, and the bottom quintile is net worth negative. I think it's easy to imagine how someone growing up in such a household would have a different experience than someone in the top quintile, who will have a net worth of >$300,000.
I am willing to believe that a large fraction are, but it is not 70% by any means and given all the bad numbers I have seen floating around I can't even tell what that number is. I would be shocked if it were below 10% and equally shocked if it were over 40%. If you have a good source of data, I would love to see it
> See the graph:
Just to be clear, that chart is the "other ways" chart. And people can select more than one item. The numbers being shown add up to way over 100%, if you look at the chart you linked, even though it excludes some options (options (a) and (c) from the actual question, which correspond to "I just pay it, what's the issue") that between them were selected by some fraction of people between 29.5% and 59%, depending on how many people selected both of those optons. Hard to tell what's really going on given this survey setup.
So as a simple example someone can check both "With the money currently in my checking/savings account or with cash" and "By borrowing from a friend or family member". Would you categorize them as being able to pay the $400 or not?
> only 19% said they could pay for it by "selling something"
Only 19% said they would sell something as an option to pay it.
I don't know about you, but if I had an unexpected cash flow issue I would probably be far more likely to borrow from friends/family as a tide-over than to "sell something". Depends on amounts, obviously....
> IRAs or 401ks are not liquid
I agree. My main point with those was that "savings" can mean many different things, and people are really bad about differentiating what they mean by it.
The only thing we can conclude from the bank survey is that somewhere around 30% of those surveyed _did_ have > $1k in a savings account. Which says nothing about how they'd pay an unexpected $400 expense, by the way...
> So I would say that half of Americans not having the savings to pay a $500 expense is accurate
I don't see how you can conclude that from the presented survey data. It was about a $400 expense (minor nit), and it's very hard to determine what people _can_ do vs what they _will_ do, and the latter is what the survey asked. And, again, allowed selecting all the things they might end up doing.
In the extreme, I know people who _could_ buy a house for cash but what they _do_ is take out a mortgage, for various reasons, including liquidity considerations, opportunity cost, etc.
> For example age 35-44, median net worth is $91,300
True.
> and the bottom quintile is net worth negative
Also true.
> I think it's easy to imagine how someone growing up in such a household would have a different experience than someone in the top quintile
Here we have an implication that may or may not hold. I know a number of people in their mid-to-late 30s and with negative net worth. All of them are doctors. Their kids are not obviously worse off than the kids of software engineers the same age (who generally have quite positive net worth).
That is to say, net worth numbers do not correlate straightforwardly with standards of living. Nor do income numbers necessarily.
There are things that seem like they should, like disposable income, but even there it's hard to tell apart someone who just has less income to work with and someone who prioritizes nicer house vs disposable income differently.
None of which takes away from the large number of people who really _are_ living paycheck to paycheck, or the children whose parents really _do_ struggle to make ends meet. And there really _are_ a lot of people who both have large student loans and have no idea how they will pay them off. And there are people with large incomes who still manage to live paycheck to paycheck, for various reasons, and obviously plenty of people with low incomes who live paycheck to paycheck. But as I keep repeating, all the data I've managed to find on this has been nearly useless because it equates things that are not equivalent (e.g. negative net worth with a low standard of living, or low income in your early 20s while lumping together students and non-students, etc, etc). This allows people to just read their preexisting biases into the data and come to widely divergent conclusions based on the same exact numbers.
Again, I would welcome any pointers to better data here.
If it were just me, I know I can live cheaply and get by if I have to, and therefore could afford to take on high risk/high upside ventures. However the reality is, in the back of my mind, I'm thinking about whether I can support my parents as they age. Whether I can pay for an occasional vacation for them, or maybe a nicer house. These are things they would NEVER ask for, and I know they can live just as cheaply as me (if not more so). But I can't help feeling like I owe it anyway. And so I take high paying, low variance jobs.
Me too, and I could see there was no other possible way to save my parent's house than to start my company.
Edit: PG wrote something relevant: http://www.paulgraham.com/conformism.html
The mindset is commonly trivialised as a class[1] issue, but that is easily debunked because people from poor, middle-income or rich backgrounds can live like PG has. Different wealth levels lead to different explanations for why someone lives more conservatively. Rich people are often trapped by social ranking or lack of motivation even though they have a financial backstop in theory. It is commonly said that the middle-class are the most trapped, yet plenty of middle class tune out and go beat their own drum. Poor people sometimes have nothing to lose, but perhaps they have to run two jobs just to stand still. The poor generally lack the opportunities (such as access to a PC or University) but sometimes make up for it with motivation and in some first-world countries they can freelance while on the dole (common with artists).
[1] class in the sense used within US English.
https://www.thefearlessman.com/the-curse-of-the-middle-class...
but there was a full page of different results under that title so I'm not sure it's what you were referring to.
Two anecdotes:
1) A pianist in my high school was Eastman or Julliard-bound. One day, I watched her sight-read a new piece. It was beautiful. As someone who struggled mightily sight-reading single-threaded trumpet parts, I asked, "How do you sight-read like that?". The innocent and frank reply: "Oh, I'm just having fun to see what it sounds like."
Sometimes (not always), people can be on another level.
2) The truly outstanding see themselves as normal. I think everyone sees themselves as normal. Freeman Dyson, from [1]: `I asked him whether as a boy he had speculated much about his gift. Had he asked himself why he had this special power? Why he was so bright?
Dyson is almost infallibly a modest and self-effacing man, but tonight his eyes were blank with fatigue, and his answer was uncharacteristic.
“That’s not how the question phrases itself,” he said. “The question is: why is everyone else so stupid?” '
I've never thought that Dyson said this with any malice, simply as an honest reflection of his experience.
For me, if I want to get something done, I have to work really, really hard on it.
[1] https://www.theatlantic.com/magazine/archive/2010/12/the-dan...
The next day Kobe has a great game, and after the game Jay asks Kobe something like, "Do you work out that long all the time?" (can't remember the exact question) -- to which Kobe says, "I just wanted to let you know that no matter how hard you work, I'll always outwork you".
For a lot of successful people their joy is their work and they take pride in being great, but still working harder than everyone else.
So is 'art school' Cornell?
Also he's 56, which means he still comes from an era where you might be able 'pay as you go' through college. So as to the question of 'was it money, class, or generational?' I think the answer is 'all three'.
The middle section of the essay describes PG's time in art school, which he attended after graduating from Cornell and going to grad school.
It's not that it's easy or hard to ruin your life financially - if your parents have the attitude of 'go live your dreams, be happy', then there is no financial ruin, because the only ruin in your mind, is not getting to live your dream.
People who have the 'dream' attitude tend to come from families who lucked into financial stability. In some sense, this is a story of a family that's been winning lottery tickets in life for multiple generations without realizing it. Of course Paul's blissful ignorance is what enables him to live as he has and to write and publish this very essay.
I mean, what makes this essay worth reading, other than that it's Paul Graham? It's typical lottery ticket winner hubris to think 'I randomly stumbled into everything good in my life' is worth writing about in the first place. Oh well :)
There are good, respectable degree programs that will get you a job where you never lay in bed worrying about money. But if you want to be rich? You may have to take a bigger risk on a more prestigious program that not only looks good on the resume but introduces you to a social network of other future (or current) rich people.
If that doesn't work out for you, you've saddled yourself with a huge bill. If your parents can't help you pay that off, you're completely fucked. Especially since they've made sure that you can't discharge those loans via bankruptcy (and that is class warfare).