Man Built a $188M Fortune Investing in Stocks Then Donated It to Charity
joshuakennon.com
joshuakennon.com
Most millionaires opt for stealth wealth. Their friends don’t know, their coworkers don’t know, their extended family doesn’t know. In a few cases, not even their children know! Wealth is accumulated through habits; at least in a free society like ours. At the moment, something like 1 out of 25 households falls into the millionaire category, most of it self-made.
From the comments:
Your right in Jack MacDonald's case too, he didn't make his initial money from stocks, his wealth was inherited which was then invested, he didn't spend any of it because he thought of himself as the steward of the inherited wealth
"His wealth was inherited from his parents, who owned MacDonald Meat Co. in Seattle, and he sought to boost the funds by investing their money"
"Wealth is accumulated through habits" is a great story to tell people but it seems very often to be complete BS.
I see a lot of these.
One of my favorite examples is https://www.businessinsider.com/how-ebony-horton-paid-off-22....
"How one 31-year-old paid off $220,000 in student loans in 3 years" is the exciting title.
You have to get to paragraph #7 to learn "work at your parent's charity" is one of the techniques. Paragraph #8 tells you another trick is "be gifted a condo". #9 tells you the third one is "have grandma pay your rent".
The statement is better characterized as something like "wealth is the product of habits and opportunity", where the only measurement we can quantify is a person's wealth, and our society is struggling to reconcile whether unwealthy people simply have poor habits (their fault) or poor opportunities (society's fault).
Say you're saving $500 a month for 10 years, on an account with 5% interest rate. After 10 years, you have $76,281, i.e. $16,281 over the $60,000 you put in. It's just 27% more - and that's assuming you can find an investment with real 5% interest rate, and without taking inflation into account. It's also assuming the banks won't pull off something funny, or that your country doesn't redenominate your currency. In this scenario of continuous savings, it takes about 27 years for the interest to double the amount of money you have. Again, if you can find something that pays you real 5% of interest. The real rates on low-risk accounts seem to be sub-1% these days.
I've been running some back-of-the-envelope calculations like these every now and then, and I'm yet to see a scenario in which compound interests gives me anything in a reasonable time frame. As it is, my wealth-accumulating strategy is just "spend less, and earn more" - with the latter part doing almost all the difference. But I can only pull this off because I'm privileged to work in tech industry, which has more money than it knows what to do with - it's not something I can recommend to my relatives with more mundane jobs.
(I guess I could get into real estate investment? I think I have too low risk tolerance for it, and I also have plenty of ethical concerns about getting rich off flipping houses.)
The trick with "if you live frugally and invest you'll end up with tons of money" is that unless you take risks and are lucky, "end up" is likely to come around your retirement age, when you'll have little use for "tons of money" except paying for medical bills - so you'll pass it on to the next generation, to give them a shot at the life you wanted to have.
But that's money that you would never be able to spend because it's only accumulating for as long as it's still in the S&P 500. This millionaire would wear clothes with holes in them, and probably never traveled or spent money on any of the things outside of basic necessities. I wouldn't enjoy that lifestyle.
Also, as will definitely be pointed out by someone, $500/year is not bad for any person with a reasonable income. But $500/year for someone living paycheck to paycheck is not possible.
Even if you get a $15 minimum wage (as some places already have), it's still asking somebody to put away 25% of what they earn. That seems very unlikely. Not impossible, but a lot of life circumstances could easily result in it being impossible.
People under estimate the kind of discipline it takes to both DCA and HODL things on the very long run. And it goes without saying, starting early does matter.
>>The trick with "if you live frugally and invest you'll end up with tons of money" is that unless you take risks and are lucky, "end up" is likely to come around your retirement age, when you'll have little use for "tons of money" except paying for medical bills - so you'll pass it on to the next generation, to give them a shot at the life you wanted to have.
Never understood this logic. Nobody starts ex-nihilo. Giving whatever little edge you have to your kids doesn't seem like an evil thing to me at all. The thing is it takes very little to give your kids that head start.
Or your kids have to write things like these when they reach middle age too.
And if you live long, you will just have lots to complain about your younger self.
Compound interest is compound interest. 5% or 7% or 11% matters, where that comes from doesn't.
Writers probably mean compounded investment returns from the public markets. I would be surprised if anyone thought an FDIC insured bank account was going to have an interest high enough to get you anywhere.
https://twitter.com/gavnugent/status/1359633577483378690
This is not to say it’s the majority of scenarios or anything, but it is funny to see how many headlines say something about how some “weird trick” helped people become millionaires and then the story mentions a significant inheritance or gift.
No further questions
Also, those articles about getting rich keep telling me to utilize my assets to earn additional income but that is illegal in my state.
Please send help.
If you really cannot manage that, then your second best option is to have a wealthy spouse. It's not ideal, but it's better than nothing.
Bonus bragging points if you're born with a certain ethnicity that has no options but to enter in that niech market because the mainstream ones have high moats around them.
What state would make investing illegal?
Not sure about the second part of your question - buy different assets maybe?
There's probably some tax benefits. And a good chance they won't touch it for the first 18 years -- By which time you might have given them a taste for compounding interest :)
Agreed, the step up at death on the cost basis would be advantageous but then you have to be dead.
And there is a scheme with yearly taxation of unrealized gains, but at a much lower rate. However, it has a per-person cap around 16k USD.
I really dislike these kind's of articles.
On the other hand, I wish it wasn’t taboo to talk about money in our society. I wish I could read stories about normal people managing their finances well, from how to save wages from a minimum wage job up to managing a large salary, liquidation event, or trust fund.
I feel like I was wholly unprepared to deal with money effectively and had to learn from my mistakes along the way. I’m horrified when I talk to people with money who don’t know the difference between an appreciating asset and a depreciating one, or have never touched the stock market, or don’t understand risk versus reward and how to manage risk. After my sister bought some stocks on Robinhood, I had to explain how it encourages risky behavior (my euphemism for gambling).
Comparing notes with friends in similar situations was like a breath of fresh air. I hate twiddling with numbers as much as the next person, but you kinda need to understand capital to do well for yourself in the US.
r/personalfinance covers what you can do with less money.
Bogleheads or biggerpockets forums for experiences about handling more money.
For even more money, you should network and hang out with rich people and will probably need to get involved in politics at some point.
your consternation requires you to have a fixed and shared definition of self made that is just not described at all here.
it does leave a glaring hole about then which wealth was not self-made. alimony? child support? having a million now but having inherited ten million?
of course its not people that spent years in debt, worked on salary, dealt with illness in their family, and made millions. that's very rare and life will never be catering to that, so, yes, a life with more options from earning this way is BS and it does keep people motivated enough to continue trying anyway, but that's not what this article was talking about.
However, I fail to see how that removes any value (or makes the task look easy) regarding Mc Donald's perspective. For that one guy who transformed 1 million into 100 millions, how many actually lost most of their initial million (in stock trading)? I am like most of us here: I imagine that if I had a million somehow, then I could easily become a billionaire thanks to my wonderful intelligence and wits, because I am better than every other millionaire out there, right? That is all wishful thinking though, and I dread confronting reality to my ego.
In reality, if I had a million, I guess I would invest it into the most risk-free assets rather than bet it all in stock trading.
Perhaps you can invest in lower risk dividend stocks which will pay out your interest + a little and 3x. If we assume those stocks only make 4% but also pay out 3% then you are looking at 16% returns. Moreover when those dividends get raised you are doing even better.
Leverage can go a long way if used well.
This statement could only ever be uttered by someone that has not tried to do this.
100x increase in any endeavor is extremely exceptional. It's as hard to do as turning $10,000 into $1,000,000.
The only thing having a larger starting amount helps with is that it opens up types of opportunities you did not have before that require greater starting capital and are outside the stock market. Those additional opportunities are as hard to capitalize on as the smaller opportunities that only require $10,000, especially since you need not only money but a lot of people with expertise that you can trust.
But within the stock market, a 100x return is something very few people in the market ever achieve.
The only place where having money clears some significant initial hurdles is probably getting to the first $10,000, maybe the first $100,000. This is a hurdle many have cleared in their lifetime and they still haven't succeeded in turning it into $1 million to $10 million, respectively.
It's hard, but provably not as hard. If you don't need the money, you can afford to take more and better risk with it.
More risk is enough to get this article (not even necessarily better risk) - if 100 people take a pure 100:1 bet, then 1 can get an article like this.
[As mentioned in the sibling comment, if you have enough time, then hard becomes easy]
It's almost certainly more challenging to take better risks as the investment requires gets larger. All sorts of new challenges crop up that didn't exist with smaller investments. It's the reason why companies have a harder and harder time sustaining the same growth rate as they get larger.
Within the stock market alone, you get access to the same exact risks as the people with the $10k YOLO accounts. If you look at WSB, you'll see a lot more posts about people posting losses on their YOLO accounts than posting massive wins. There are a lot of sharks swimming in the capital markets with deep expertise.
I would argue that you have proven my point - if I have a bunch of money, I can pay for expertise/management that is going to net me a higher return.
Not starting with $1 million. At $10 million you have to be the shark. You need to be closer to $100 million to be able to afford the sharks the don't have their own principal to work with. Even then, you still need to know how to hire the sharks.
Source: I used to work in this market.
> Had he just parked $1,000 in a basket of equities when he turned 18, it would have been worth $2,048,400 at his death.
oh, I don't find that controversial in case my lack of stated opinion prompted someone to fill in their own.
My thoughts are limited to exactly what I said and I am content with this reality that the profits accumulated during their lifetime are counted as self-made, it doesn't say anything about how the first one million or any amount was made, and that wage earners are excluded from playing from math alone.
Just for reference, and we don't know how much he really inherited, if he inherited $10M and put all of it into a SP500 index fund that earned 8% returns per year he would have $100M after only 30 years. This is with 0 additional capital invested, 0 effort, 0 skill in picking stock, doing nothing but tracking with the market so perhaps his "self made" status isn't really that impressive. The Author guesses he did better than average to make his fortune but that doesn't seem necessary at all.
Alimony implies marriage. In marriage all the money earned belongs to both parties. If there's only a single earner and the other is a nurturer, so what? It's still both party's money. Alimony is there to help the nurturer transition back to an earner.
Child support is, well, you made them, support them. Simple.
Money paid in alimony has nothing to do with money earned in marriage. The divorce division of marital property covers that. Alimony supports the lifestyle. Would you consider a recipient self made or not.
Would you consider a recipient of child support self made or not.
A house may be a reasonable investment vehicle; it can also be an extremely illiquid one.
Essentially what you're saying is that because someone has put money into mortgage payments instead of rent, they're better off financially, and I'm completely in agreement with you. I just don't agree that it somehow implies they're living high on the hog, so to speak; yes, they have additional options if shit hits the fan (metaphors metaphors!), in that they can cut their losses, look to sell, and move to a lower cost area and have a bit banked (and -maybe- retain their income given remote work, but also maybe not), but that's still quite a lot to expect.
The scenario in this thread was originally "the house they live in just happened to appreciate significantly and is now worth over $1mm". You're describing quite a different situation.
That owner by definition does not have a $1m mortgage - or if they do, they have quite literally cashed out.
That owner is, in fact, saving a proportion of everyone else's general housing costs, compared to new buyers and ongoing renters.
Someone with a $1m mortgage is in quite a different situation (while likely very rich in terms of net worth, does not have to be a millionaire in terms of net wealth).
Add in that Boomers skew much richer at the same stage in life as later generations, and that they're a large chunk of retired people, and yeah, "1 in 25 households are millionaires" just means half or 1/3 of retired people aren't living on cat food, and were actually able to retire. Hooray.
His wealth was inherited, but if you start to invest money in your 20s, and you invest every month at dont touch it, you will most likely get rich if you live to be a senior.
That's the whole reason people object to these "just start saving and compound returns will make you rich" myths. The fact is that only people near the right-edge or beyond of the curve in terms of income will ever "invest and be rich" in a given lifetime. It takes a combination of extreme luck and risk-taking to achieve wealth in this society.
Back of the hand says that if you invest 10,000/yr from 20 to 30 you'll have saved ~$100,000. And then 7% and with the rule of 72 is then: 30: 100,000 40: 200,000 50: 400,000 60: 800,000 70: 1,600,000.
S&P is closer to 12% than 7% which means you might be able to get away with saving less aggressively or earlier retirement. If you are able bodied and willing to learn a trade you should be able to make atleast 20/hr. I made 19/hr right out of college as a manufacturing technician and saved ~1000 month. You have to sacrifice to do this e.g. live with roommates in a cheap area, rarely go out to drink/eat etc., but if you start early, don't have kids and save aggressively its very doable. I didn't completely live like a monk, I bought a canoe and went canoeing most weekends and had a rock gym membership for one year while doing this and a martial arts membership the other year. I also lived one block from the projects in a 3-1 with 3 other people so rent was tiny and ate rice and beans + chicken thighs or eggs 3-4 times a week for dinner to keep the cost of food down. Its straight forward on median salary, but you have to sacrifice. The budget is straight forward too: The budget is simple, you get 400 for rent, 400 for food, 400 for transportation, 400 for bills (internet, electric, water, sewage), 200 for health care expenses, 100 float and 100 for fun. You can even do it in SF if you do two people to a room (just like dorms in college) in a large house--transportation will goes down, rent might go up and food probably goes up as well.
You could also work 50 hours a week and save that extra 25% of salary which again at entry level in the trades would yield you close to 10,000/year (minus taxes but hello IRA). The Dave Ramsey retirement calculator says that if you save 1500/month from 22-25 you with 10% returns and no savings after that you'll become a millionaire at about age 53. You can make that happen as an entry level mechanic who lives like I did who works an average 10 hours of overtime a week.
one i'll question immediately is 12% returns, which is quite high given historical means and a figure you'd expect a reversion to sooner rather than later. you'd also need to have a brokerage/retirement account of some sort and have enough financial literacy to know to invest in the s&p vs the thousands of other options available. you'd also have to be lucky enough not to hit a severe recession/depression too early or at another inopportune time in your life, like while having a serious medical condition.
with that said, yes, you can totally live off of $2000/mo and save $1000/mo (i've done it for a short time) if those stars do line up (like being young, having no kids, and finding $400/mo rent) for some number of months, but i'm not sure it's feasible longer term for most people most of the time. circumstances and people change.
So you're telling me that all most Americans have to do is put at least 1/3rd of their paycheck into savings in order to have a chance to retire well? I'm sure they will get right on that sound financial advice.
He certainly is an outlier in terms of intelligence and work ethic, but I would assume connections from his dad helped, as well as the family being able to afford sending their kid to good schools and NYC for further networking and education, all the way from Nebraska in the 1950s.
It's true your probably not going to make 188M, but even a lot less than that is still rich.
Yes, and he should be credited with taking that initiative. But note that this was the 1940s. I would posit a high probability that Buffet got advice from his educated father, who had is own investment firm, that 99% of children would never get because they didn't have someone as capable as Buffett's father. And/or the other paperboys had to chip in and help feed their family unlike Buffett who could afford to lose his paper route money and not sacrifice anything essential (again, presumably, but I think it's a good guess).
Even nowadays, with the ease of the internet, I would say that simply having parents who know what a low cost broad market index fund is puts you a standard deviation above the median average in terms of how good of a start you have in life.
1. life is not fair
2. there is no such thing as self-made men/women. luck play plays a role in everything, from the country you were born in to the genes you contain.
I was just making an observation about how great and effective compound interest is.
4% of households is off the mark. It's presently closer to 7%-10% depending on the source [1]. 8% of American adults (~19-20 million people) are millionaires [2]. It's not what it used to be, given the median sale price of a home is now around $350,000. Demographically the mean white household in the US is now approximately a millionaire household.
About 9-12 million households out of 128 million have a million dollars in net assets, including primary residence.
The number of millionaires in the US has soared in the past 4-5 years with the asset price boom in housing and the stock market. For example back in 2016 [3]:
> As of the end of 2016, there were a record 10.8 million millionaires nationwide, according to a new study from Spectrem Group’s Market Insights Report 2017. That’s more than ever before and marks a 400,000 person increase from the previous year. ... In 2016, there were 9.4 million individuals with net worth between $1 million and $5 million, 1.3 million individuals with net worth between $5 million and $25 million, and 156,000 households with more than $25 million in net worth, the report says.
The US has been adding a huge number of millionaires per year (temporary or not) as the asset bubbles have been making new highs by the year.
[1] https://www.kiplinger.com/slideshow/investing/t006-s001-mill...
[2] https://www.cnbc.com/2021/02/09/more-than-8-percent-of-ameri...
[3] https://www.cnbc.com/2017/03/24/a-record-number-of-americans...
I'm surprised this hasn't been mentioned yet, but I encourage you to dig more into financial independence, and how living more frugally can help you save more money to invest in the right ways to generate wealth. There's plenty of books on these habits, "The Millionaire Next Door", and even some popular communities that attest to it such as https://www.mrmoneymustache.com/.
You don't need to be rich to generate wealth, but it takes sacrifice (like everything in life), or even habits to get there.
The whole "personal responsibility" myth is designed to fool comfortably middle-class people who still do labour all day into not resenting the elites who live solely off the surplus value of their labour. It tells you to aspire to "passive income", which is ascension from the worker class into the capital class, instead of redistributive policies that would harm the capital class. You're not poor, you're a temporarily embarassed millionaire.
1. Get college degree enabling 6-figure income.
2. Marry spouse making 6-figure income.
3. Live off of 1 income for 10 years or so, save the second income.
Then you can implement Money Moustache style finance plans. Or maybe for singles if you can make 6 figures and save over half of income.
But yeah, on 35k it's not very useful advice. Except "get a degree or training to get you into 6 figure income bracket", which may not be realistic, either, given existing time commitments.
This can just be replaced with "always". You can be lucky or you can have inherited wealth.
You prevent yourself from attempting anything to change your circumstances, while rolling around in self pity and building resentment towards successful people.
Too much of this destroys societies, and having it personally yourself destroys your life.
Having opportunities around is lucky, but most people aren't interested in taking the risks or making sacrifices necessary to seize those opportunities.
And often times the ones willing to do this are then later called lucky.
Put differently: To gamble you also need to take risks and make sacrifices. Some people will make it and by necessity those people are the ones that are willing to do that. That takes absolutely nothing away from the fact that the success is due to luck.
A good investor does not feel like he is gambling. He just knows industries well enough to make educated guesses that are likely to happen.
Someone else could put up the same amount of money because he overheard a tip in a bathroom. In my opinion, that person is gambling.
But really its all the same and it's all subjective.
The gambler was lucky, the investor was smart, who cares they both won.
The investor is more likely to win again though I wouldn't necessarily call him luckier.
"To gamble you also need to take risks and make sacrifices."
This statement reads as if you look at all risks as gambling. I disagree with you. With good information and intelligence, things may not be a sure thing, but you can make your own odds very good. You are basically doing work to "increase your luck."
I don't think that makes you luckier I think that means you earned it.
I have explained this concept as well as I can, I'm sorry if you still don't get it and have a fixed mindset.
There are many fantastically wealthy people there who got rich exactly as this article described.
Go check it out, you'll find it's true.
Yes. It's capitalist propaganda. If you are a highly paid heart surgeon or CEO you can "accumulate wealth with habits". If you are anywhere between flipping burgers to many other types of jobs there's just not enough money "coming in" for these things to make a huge difference. You can be more sensible with your money and you may end up with a slightly nicer car, a slightly bigger house in a slightly better location than your other careless peers. But that's about it.
Now, quality of life would be rubbish. But it's technically possible.
So crying "this doesn't apply to people with really low incomes" is true to an extent, but that's only a fraction of the population. Going around saying "well, you shouldn't give that advice because it doesn't apply to everyone, it only applies to most people" is insane.
[1] https://www.census.gov/library/publications/2020/demo/p60-27...).
It depends what you define as a good quality of life, but I don't know of anywhere in the US where $68k comes anywhere close to protecting your family from an unexpected medical or legal expense, especially one that causes a disturbance in the income stream. Personally, that disqualifies it as a "good quality of life".
The biggest weakness is once you get into the 50 to 65 year age range. Your odds of health issues or economic conditions decrease your chances of having decent employment, especially with subsidized health insurance. Your insurance premiums also rise to about $22k per year at the silver level, with a $17k per year out of pocket maximum.
And you have no assistance until age 65 when Medicare kicks in. So if you get don't have an employer with deep pockets after age 50, and you get into a healthcare crisis, all of the assets you've saved up are now in play before Medicaid will save you, and now your family is left with not much. This is the reality for many, many Americans at $68k per year, no matter where they are in the US.
This is a pretty universal statement if you ask me, and used in the context of praise of someone who started with wealth.
Pointing out that it does not apply universally, and the extending the idea to state that people in poverty are not truly participants in the "free society" mentioned, is a fair development of the discussion in my opinion.
Your first mistake is assuming you can get a minimum wage job for 40/hr (with benefits?). Maybe you can get 2 20hr/week jobs with no insurance, if you can schedule them right and travel between them fast enough.
> renting a one-bedroom, all in will cost roughly $454 USD
A room in a rooming house where I live costs $400/month, so I find this pretty suspect. Where is this extremely low COL city? Or is this assuming you have 3 roommates?
> With cellphone (250GB of 5G speeds) costing the equivalent of $15 USD, and groceries and electricity costing another $350, there's still plenty of space
$350/month for food seems low presuming you're working 40+ hours/week at multiple places. I'm assuming you're going to end up buying some prepared food at some point because you're run off your feet.
Your expenses don't include a car - does this extremely low COL city have an amazing public transit system that will help you get to your not-9-5 shifts? Or are you going to spend an hour waiting for the bus each way? How do you swing that if you have two jobs?
Assuming you don't have benefits, you better not take any prescription medication, or need glasses, or sustain any injuries. Even if you do, what's your co-pay like?
You still haven't purchased any clothes, shoes, any sort of entertainment, or enjoyed your life in any way. You need to wait until you're 65 to begin to live your life in any meaningful way, assuming you made it that far. And you certainly don't have kids to help take care of you!
Prescription medication, and glasses are covered by our equivalent of HMOs. Depending on income levels these are literally free. There are no copays - we have socialised medicine.
Yesterday, I bought a pair of jeans and a t-shirt at Fox, the local store. Their cost - 55 NIS (that's ~16 USD). For a further data point, a monthly inter-city transit pass costs ~256 NIS so < $77. It also takes an hour to get from a low cost of living city, to a HCL city where one is paid more than these minimums.
Again, I don't think that someone doing this would have a high quality of life. I'm just saying that it is very possible - but it depends on many things.
Even if self-imposed, I'm not sure choosing to live a life which excludes things listed on the Universal Declaration of Human Rights should really count. This is why the idea of a "living wage" was created, to show the cost of entry to participate in society as it is - more than simply having a phone contract. https://www.livingwage.org.uk/sites/default/files/LWF%20Life...
What are the odds that the rent will stay the same for 45 years (per your analysis) and what are the odds that minimum wage would go up equivalently?
You also missed: taxes, healthcare premiums, healthcare copays/fees, transportation, dental.
And that's assuming nothing happens (literally nothing) that sets you back. Nothing breaks, no emergencies, no health scares, no economic shocks. The likelihood of this is very low.
But if you are ego-centric then I can understand why you’d be bitter.
[0] https://www.investopedia.com/financial-edge/0810/7-millionai....
[1] https://www.chrishogan360.com/investing/how-many-millionaire...
[2] https://www.cnbc.com/2019/09/26/majority-of-the-worlds-riche...
A good example: Zuckerberg is considered "self-made," right? Except he had a wealthy father (dentist) with wealthy social connections who funded his company. It is at best misleading to claim Zuckerberg is "self-made", in that it completely elides substantial luck and money he did not, in fact, earn, to get where he is.
However, compared to others, he is pretty self made in the sense that he did the grunt work to create his website and get it off the ground. Obviously, almost no one vaults themselves to the top with zero help, but Zuckerberg is a far cry from someone who inherited a trust fund and then placed various bets hoping to hit it big by funding someone else's work.
The response - “ugh what an a-hole, who inherited his wealth”.
I’m so sick of hacker news. I mean if you were defending someone who squandered their opportunities but the bias was in the system, I applaud that defense. We should be very aware that some people are screwed and oppressed.
But it’s like you can do no good, unless you’ve overcome some huge gross injustice, or had zero privilege.
It reminds me of the Baptist’s who tell people they have no faith because you haven’t first went off and totally screwed yourself up and riddled yourself with addiction before “coming to Jesus”. If you respond well “I’ve just tried helping the poor, trusting and worshipping what I know of God, and being compassionate towards my fellow man” they’ll ask “but have you been first an awful human being then prayed the Jesus prayer?”
Likewise on HN - “I gave all my money to charity to help the less fortunate” response - “yeah but did you inherit that wealth?”
Wealth, privilege is now original sin for a lot of people. There is no real way to get out of it. See here. Even giving it away means you stay guilty. Never mind the guy didn't even spend his money on anything. Just having it is sin.
I think the only way you can get rid of this original sin is by donating to climate change efforts or BLM or something similar. But I'm pretty sure even then you will be thought of as the inheritor of priviledge.
And this, by the way, is how bolshevism is born. Like actually.
TLDR: No matter how much you donate, don't deny your privilege if you don't want to be called out for it.
I don’t see any comments calling the donor a pejorative. The other comments are accurately pointing out the article is wrong about how he obtained his wealth.
The guy didn’t write the article, he lived a long life and donated a lot of money to charity after his death. I’m sure he’d be the first to say that he was lucky to have inherited so much wealth.
While the criticism against “good habits build wealth” is legit when it leaves out the inheritance fact, i think I was just annoyed that the focus was on that rather than what was a good use of an inheritance.
Effective Altruism is a movement & community of people focusing on the effectiveness -
> about answering one simple question: how can we use our resources to help others the most?
https://www.effectivealtruism.org/
Giving What We Can is a community of people who have pledged to give at least 10% of their income to cost-effective charities. I'm a proud member of 10 years.
https://www.givingwhatwecan.org/
Zell Kravinsky gave nearly-all of his $45 million he made from real-estate
https://en.wikipedia.org/wiki/Zell_Kravinsky and a talk he gave https://www.youtube.com/watch?v=RvUcbcUMtXw
In a very abbreviated version, that root cause being that our society requires that some labor in terrible conditions for little pay because it is necessary to maintain profits. And, those people having little power to oppose this state of affairs compared to those who perpetuate the status quo, nothing changes.
Individual acts of charity like these are inspiring, but you will never get enough people/money on board with your program through the kindness of their hearts. It’s like trying to change the direction of the wind by blowing and trying to convince your friends to blow as well, except it’s even worse because those who have tons of money (as a class) will actively act to keep the system going.
There is now a misconception that EA is about "patch fixes" rather than addressing "systemic causes". This is unfortunate, as numerous people within EA are concerned with the far future and broader goals than helping most-in-need individuals immediately. For example, pandemic risk (and decreasing it) has been on the EA radar well before the current pandemic.
One lesson from EA, is that you can't in good faith say "I can't do much good, I'm not working in a non-profit" -- since just about everyone (who is well over the US poverty level) is able to give at least some amounts to charity. And since giving to cost-effective charities can be 1000x the positive impact of average charities, you don't even have to give much to do a lot of good (see https://givewell.org/ for recommendations).
As for people who want systemic change, EA is all in favor of it - connect with others working on the same issues, and focus on effectiveness as you do the best you can with your efforts.
Economic theory would argue that: "little pay" is because they produce "little value".
I know pay and value are not aligned. But better education, health prospectives and stability (not war) tends to improve pay throughout an economy.
Individual acts of charity, especially effective altruism, is more like blow with the wind. Contrary to popular belief extreme poverty is rapidly declining.
Any economic theory that predicts this is probably not very useful, since this claim is easily falsified. Consider e.g., the situation of Amazon workers who are paid low wages and forced to maintain such a pace that they need to go to the bathroom in bottles and bags, but whose labor on the other hand caused Jeff Bezos' wealth to increase by over $100,000 per worker over the last year.
But GP argued that our current system was maintaining a status quo where people in poor countries make little pay.
And that effective altruism was like throwing money away.
While fact is that extreme poverty and poverty in general is declining globally.
You can argue that effective altruism has marginal impact on the macro economic trends that drives people out of poverty.
And therefore the impact of donations is unimportant, because the decline in poverty is driven by strong economic forces.
Arguable donations probably help!
But regardless of the source of his wealth, the subject still faced the temptation of greed and didn't succumb to it. Good on you, Jack.
[0] https://www.forbes.com/sites/stevenbertoni/2020/09/15/exclus...