How to Be Successful (2019)
blog.samaltman.com
blog.samaltman.com
If you agree with that definition, this article makes sense. But that is by no means a universal definition of success, and anyone should feel free to choose different goals in life.
So, there’s value in observing them.
That doesn't mean the advice is not good. Change the telos a little and it mostly still applies.
It's possible to make something important and not get rich. I'm happy having done that and live a (economically) modest life. The most important yet contentious point, I believe, is this one:
> Be internally driven
My feeling is that true freethinkers with the courage of their convictions are less than 1%. I also believe that for most of us, it's actually something that holds one back from wealth.
I won't quote it chapter and verse, but what I believe the author is describing in the last part of this article is not an entrepreneur per se, but an "activist". Or rather, what has come to be labelled in this age of tedious conformity and wannabeism as "activism" - that being the sincere desire to change the world for the better. And all the better if that can be separated from the distraction of ego and personal wealth.
The unfortunate requirement of modernity is that money is necessary for action. Words alone may make a difference, but money helps. Since most so-called "successful" people are merely building fortunes to enable their real success, the telos or vision of their life, the distraction of making money as a step can be excused.
But I would add one last point to the article to make it more rounded.
14. Don't lose sight of your original, real motive.
Along the way many an ambitious person is overwhelmed by their "success", be it money, fame, or power. The cautionary narrative archetype is of course Tony Montana (Scarface). They forget their essential self-hood and the seed from their childhood that really drives them.
This statement assumes that there's such a thing as free will and original thought. I know that this is a completely different, philosophical and metaphysical discussion, but still fundamental to the question of "how to be successful?"
For practical purposes, it’s best not to worry about determinism so much, and adopt the belief of compatibilism [1], which many institutions in society—such as the courts and legislature in Western countries—effective assume (if not free will).
The existence of original thought also matters less than the ability to effectively execute a plan to create a useful good or service, for the purpose of career development.
[0] Stanford Encyclopedia of Philosophy: https://plato.stanford.edu/entries/determinism-causal/
Any `how to` discussion presumes free will as a fundamental axiom.
Note that I don't believe any of this to be true, but it's an interesting thought experiment.
No no, the second part of the statement, "the courage of their convictions", that is the rare part.
New ideas are common and most are just laying around in the ether to be picked up or put down at ones leisure. Only novices or fools think they're the first person to pick up a given lane of reason.
Its only the true imbeciles who decide to jump off a cliff and risk it all on an internal belief that they've 'got it right' with whatever they're doing that make it. There are plenty of cowards with ideas who never make it. Those aren't the people we're talking about.
The demonstrative proof is that everyone is free to take an idea and try and fly with it by jumping off a cliff. The rarity is that almost no one does it. The selection bias is that we only acknowledge those who do fly and not the pile of bodies at the bottom of the cliff.
To me, achievement is anything that you genuinely had to work hard towards, make sacrifices for, and overcome your own prejudices and biases.
Making XZY money every year can be an achievement if making money is simply not something that comes naturally to you, or something that you grew up understanding anything about. If you grew up in a business-focused environment where you were taught about money (and how to make it), you'd have an arguably easier time making money than someone who grew up with deadbeat parents, addicts, or a family that never understood money or careers.
At a personal level, my biggest achievement has been my ability to build a loving family and healthy relationships. These don't come naturally to me. I've had to overcome so many bad habits, biases, beliefs and sheer genetic inertia to get to that point. It's my proudest achievement and I'll value it more than any business I create or book I write.
Next I want to finally figure out how to hit a baseball.
But I’d add - it’s wise when read by wise person and stupid when read by stupid person.
> anyone should feel free to choose different goals in life.
I don't know why anyone would feel otherwise.
Your contribution absolutely deserves to be rewarded by the public's trust which comes in the form of money. However, money is merely a proxy for that trust, and we know you can acquire money by obtaining short-term trust. Even if you later lose the public's trust for your previous work, you may be able to hold onto that money by hiring good lawyers, to say nothing of the relationships you built that may rely upon you not turning out to be a fraud.
That said, aside from having confidence in yourself (but not so much that you cannot acknowledge mistakes), money is the best proxy for trust that we have. It's fine to go after it as long as you understand that your relationships with people are more important.
Because it depends on who is getting richer from your hard work. If you work hard in a corpo and you have constant salary independent of your work results, your boss will have a ferrari sooner. If you work hard on your own project, you will reap the benefits.
In a corporate setting, the advice on: Get good at sales, Be hard to compete with and Build a network, will get you much further than working hard. Working hard in large corporation will in many case only grind you down, if don't manage to make your work visible. It's not only in the US, other countries don't view working hard so favorably anymore, and I think it's due to it being tied more directly to stress, rather than success. Hard work alone will make a person stressed, but does not guarantee success, selling yourself and networking will be much more likely to result in success if applied alone.
Overall it is good advice, as a whole, perhaps more so if just want be happy in you profession, feel secure and have a sense of belonging.
>Overall it is good advice, as a whole, perhaps more so if just want be happy in you profession, feel secure and have a sense of belonging.
Something is missing in that formula because this is exactly why we have the toxic culture we have in a big corp today killing creativity, promotion first attitude, and all kinds of politics. It's pretty screwed up. People are not robots. I hate these pieces of advice that treat people as soldiers with no emotions. If you want to go A you have to do B. then it will work. Yeah right...
I'll springboard off it: what are some good ways to network? I'm 40 and have been ignoring these skills for too long, opting for the "hard work" path, and seeing the limits of that. Confs? Open source? Talks? Twitter (please no)?
The best why however seems to be helpful. Solving a minor issue for someone in accounting may seem like nothing, but it’s important to them and they will remember you.
What can you offer? what do you want to share? what are your passions? What brings you great joy?
Define some of these and then look for people who share your values. "do things that don't scale" as in find a handful of people and reach out directly. small focused networks are superior to large dispersed networks
That is, you should live (at least partially) to work, and your work should be worth (part of your) life.
So what I would do when I was both well-stocked as far as the medicine cabinet, and in addition getting paid a job where I ended up well ahead, was just work.
I'd show up to work like three times a week because the commute was long and very dangerous, biking on highways and such, til I found the terrible bike path I was meant to use. Still riding on roads a lot.
But when I got to work? Just plow through it. No shifts, none of that, no. Like yeah socialize at meals with the company, but just work. Just work. Pit stops, so like I needed dex as energy, really high octane fuel, because there was no other way to support those work trances. All the energy was in my skeletal muscle and brain. And I did a great job at everything on the first try.
Plus I had very productive behaviors as an employee, so I had a few things I was doing in parallel, solving them like puzzles, then when I got stumped I'd switch puzzle. Then when I had three questions together I'd tell my boss, so as not to be interrupting all the time, and figured them all out and got back to work. This happened on a like 2 hour basis. But mostly it was not based on hours, but on milestones. Like if it took fifteen hours to get to the next milestone, and I showed up at 10 AM, that just meant I'd be done at 2:30 AM (with lunch and pit stops, talking to people on the hallway).
And I ended up with more and more money! Then, what I did is I went to the City and partied. I was generally the life of the party among the men. I met so many beautiful women, hot women, cute women, mysterious women, flawed women (my favorite), of so many nationalities, like I was going to meet two Afghan women even. It was great. Very romantic.
It was much better than before, instead of work to live and live to work it was work at a loss for an ungrateful Chilean negrero, get nagged about the clock, negotiating a pay cut from under the local minimum wage to even less, constantly, deal with a doctor who also wanted to starve me of medication, and feed bad habits like smoking and coca-cola which were an inferior substitute to the medication on shortage.
Work to live and live to work, hey at least you live and if you like the work!
See:
Globalization and the IT revolution also happened in the same time frame, and have contributed to inequality via much more obvious mechanisms.
Very interesting stuff. Well worth a watch.
I'm a year and a half into a project that I've worked on fullest time with max grit that I own completely. If it succeeds even a little I plan to build 3-5 dome houses on our rural land for indie gamedevs and artists to work on their personal projects for a year without rent. We'll only ask for a tiny percentage of revenue sharing just to try and make the thing self sustaining. A little forest moon base for dreams.
I hope by not being parasitic and actually just helping people do the thing I have been struggling to death to do, it would move the needle a few atoms towards what you're describing.
My greatest fear is that the system is so efficient that some how helping others is impossible, and I'll figure out why only when I'm dry. It's hard to imagine, but I haven't seen much help from the waterworld captains while I've been cobbling together my raft of flotsam. Maybe it's because sailing is hard and storms are kind of scary no matter how big the boat. Few grow old enough to find the time.
Feel free to email me, especially if you're among that rare resplendent type.
I'm not rich. I've done important stuff, that has almost certainly saved lives, and is being used daily, by thousands, around the world. I'll never get much credit for it, and never made a dime (in fact, it cost me thousands, out of my own pocket).
I have to work on projects for no pay, because folks don't think my skills are worth paying for.
I feel that I am quite successful.
What differentiates you from other people who are not successful?
It really is that simple.
Being happy is being satisfied with what we have. If we have what we want, we tend to be happy.
I remember being involved in running the set up for a major program (very early phase, pre funding but the program eventually burned £billions of investment and took 20k + folk to deliver - I had been long sidelined by then). We ran stakeholder workshops to create definitions of the mission and of success for the people who would be doing the hard yards. I brought representatives in from the field and from the lower management; their verdict on what the programme was for and who should get what was light years from the accepted C-suite wisdom.
Our media parrots that money talks, and the monied classes fervently believe it, but that is still not the wisdom of people on the ground.
But who cares about them, eh?
I know that my outlook is a bit orthogonal to the zeitgeist of this community, but I love tech, and love people.
I don't think we should be forced to choose between them.
The other sites are just simple responsive WordPress sites, and aren’t designed to be eye-candy. They are actually quite modern, and work pretty well on phones. It’s just they aren’t ghastly, JavaScript-loaded, everscroll single-page sites, and aren’t trendy, at all. I’m not really trying to impress anyone. I just want to have a decent place to hang my stuff. I design my own sites, and Web design isn’t my forte.
I want to update them, but haven’t found the time. They work fine. I stopped putting my writing on Medium, because … Medium.
I like some of the static site generators, and maybe I’ll go with them, eventually.
I don’t try building high-Quality products, I succeed. I’ve been doing that for quite some time. I’m not particularly worried whether or not anyone uses them. I tend to build stuff that I (or my community) want. It’s a “market” that is quite underserved, as there aren’t vast profits or scale to be reaped. I’m happy to talk about it, but this isn’t really the venue for that.
I’ve found that there’s a great deal of satisfaction to be had, Serving a need, for folks that no one else cares about. The work interests me, more than fame and fortune. I spent my life, making stuff for corporations, only to have them destroy it. That gets rather depressing. These days, I write stuff for people.
It also held me back. Most corporations are fairly retro. HN does not represent the vast majority of developers. I like modern tech, but I also like shipping, so I tend to stay a year or two behind the bleeding edge. I also find “trendiness” to be a bit shallow and silly. I like to wait for the burrs to be worn off (I have taken OpenDoc classes from Apple Developer University. I've seen things, man). I'm a very practical person. I like writing stuff that works, not that wins Buzzword Bingo.
This is what I believe in from my experience in starting businesses. Much of the "stomach" to take risks and taking them multiple times depends on how "lucky" you were to begin with. People around you will see risk if you don't have money or opportunity if you do, so expect their support accordingly.
I have a family relative, one of the most lazy people in the world, that some day found herself rich. How? Hard work? Business value? Education? No, she discovered she had a grandaunt and that she would be the heiress of three 300000EUR houses, plus half a million euro. The scene seemed out of a 90s love comedy, if only it weren't tragic.
So, if you start with money, you end up like WeWork. You may renew your money but nobody likes you.
The danger is ignoring the tendency of egocentric bias in these articles[2]. Successful people assume that their values and ethics are what led them to success, when that may not be true. Though that then bears the question: who do we listen to for advice on success? Rich people? Scientific studies [3]?
A thread I read on a previous hackernews post (coincidentally about Paul Graham, another founder of ycombinator) perhaps puts these ideas in better words than I [4]
[1]: https://journals.sagepub.com/doi/abs/10.3102/003465430750034...
[2]: https://www.youtube.com/watch?v=3LopI4YeC4I
[3]: https://journals.sagepub.com/doi/full/10.1177/23328584198577...
Yes, it is. I see it all the time. Scott Adams wrote a book about it entitled "Loser Think".
BTW, everybody is born with disadvantages. But everyone also has advantages. Like being born in the US (instead of, say, Venezuela) is a big advantage.
It's a pity that Sam's comment above was missing from the original post, and was added after this discussion on HN. It should have been point #1.
The problem of these types of recommendations, like work hard, have self-confidence, think independently, is that they are condition necessary but not sufficient for startup success.
It's similar to recommendations on how to make a cake: Make sure the eggs are fresh, measure well the amount of sugar and the oven temperature. None of that will guarantee a prize winning cake:-)
A great piece of advice for founders would be on how to found a startup, and despite consuming 30 millions dollars, still manage to find a buyer willing to pay 43 million dollars for the business. The explanation of those details could provide the business acumen, insight and experience many young founders require.
Certainly all, successful and less successful founders, are focused, working hard, and thinking independently. Otherwise they would not be startup founders.
"In 2005, at age 19,[9] Altman co-founded and became CEO of Loopt,[10] a location-based social networking mobile application. After raising more than $30M in venture capital, Loopt was shut down in 2012 after failing to get traction. It was acquired by the Green Dot Corporation for $43.4 million."
What a great success...create tons of hype, run the company into the ground and offload overpriced equity onto a bigger fool. The American dream.
No wonder he likes Musk so much. It's basically the same modus operandi.
Title suggestion for next blog-post:
"How to fail upwards" also
"How to play poker with chips payed for with teachers pensions funds"
Both SpaceX and Tesla got helluva lot of traction. The US now depends on the Falcon/Dragon combo to get American astronauts into the orbit, a task which Boeing so far failed to accomplish. And the Ukrainian artillery is pounding Russian targets to pulp with use of Starlink
How this is basically the same as Loopt, I cannot see.
That's basically after billions of tax breaks and subsidies at the County, State and Federal level, which were showered on Tesla during the last 20 years, not even mentioning the blind eye that regulators turned on Tesla and Musk personally because they all bought into the narrative that he was Phoney Stark. Again not even 1% in 20 years.
SpaceX is totally dependant upon the goodwill of taxpayers, the moment they lose interest in space, then down goes SpaceX.
The only traction that a person anchored in reality sees is the cult of personality and techo-utopianism that mr. Musk managed to create around himself.
Unless you consider the entire space activity of humanity a kind of cult/scam/hype, you have to admit that SpaceX technology is competitive.
Official announcement (2012): "https://ir.greendot.com/news-releases/news-release-details/g..."
Couple of interesting bits: So Sequoia Capital had done a 20 million series B into Green Dot Corporation ( now GreenDotBank ) followed by a private equity investment according to public records. By the acquisition time the initial funding of Green Dot was recorded as total of 33 million dollars.
Now it happens Sequoia Capital was also a VC for Loopt, and had put at least 17 million dollars into Loopt, also according to public records.
The deal was 43 million in cash! including 10 million dollars for employee retention of Loopt employees.
Now such a good deal, is what I call the definition of success. And how to close one of these would be a blog worth writing...
The term for it is "risk". Successful people often fail many times, but each time they get up again, learn what went wrong, and try again.
Losers quit before they start.
What does that tell people in less fortunate circumstances? Sorry, you weren’t lucky, too bad. Better just hope some lucky person fixes everything for you because you have no agency over your own life.
Entropy and randomness exists. Agency exists. People don’t generally attribute success to solely one or the other. However, think about this: if the objective function is $10MM net worth, and there are two variables, luck & agency, and each variable has a threshold one must exceed before contributing to the objective function, it’s easy to see that randomness (luck) will contribute to your networth, more so than grokking (agency) it.
In other words, a small amount of luck has a larger effect than a small amount of agency. But, if small amount of luck translated to $10MM net worth, isn’t that lucky by definition? Conversely, if a small amount of agency translated to $10MM net worth, what does that mean? Can you say that it was all your efforts that solely got you to $10MM net worth?
It’s not a simple made up equation with two variables and an outcome. It’s an iterative game you play over and over again throughout your life.
...you're saying it in your post that everyone is saying it.
I’ve made plenty of money advising startup entrepreneurs on IP law, incorporation, and tax strategy. That means I have visibility into founders’ most sensitive personal financial information and I can count on my hands how many founders I’ve met who don’t come from financially well-off backgrounds.
That may be a function of the fact that my services are expensive and only those who are well-resourced would seek me out… but truth be told if they can’t afford me they probably couldn’t afford to take the kinds of risks necessary for the success defined in this article.
I say this as someone who was “born lucky” too. If my parents weren’t both professionals with money to invest in my education and a network for me to tap when I started my firm, all the hard work in the world couldn’t guarantee I’d be where I am. And I don’t even consider myself that successful compared to others I know.
Just a quick question, who will be in charge of “leveling the playing field”? Who gets to choose what criteria determines whether it’s level or not? Do you think they might have some advantage? Will it be a level field for them?
Trying to quantify these things is a fools errand and I would argue tilts towards social justice narratives. There’s nothing wrong with that, but I do believe it is counter productive for individuals who want to be successful. Everyone has advantages and disadvantages, but the common thread with successful people is a bias for action and not getting lost daydreaming and pontificating.
>It's a pity that Sam's comment above was missing from the original post, and was added after this discussion on HN. It should have been point #1
Which translate into the following advice: choose your parents wisely.
Successful people make their own luck, and spend a lot of effort making it easy for luck to find them.
For example, if you never leave your basement, you're unlikely to get lucky finding a life partner.
This is why I am so annoyed by the Left and the Right simplistic view of this.
The Left: "You are rich because your are privileged!"
The Right: "You are poor because you are not working hard enough!"
Oh, how do I hate both.
"Is Success Luck or Hard Work?": https://youtu.be/3LopI4YeC4I
1. stay in school
2. don't do drugs
3. don't do crimes
your odds of being "lucky" in life rise considerably.
People take medication to adapt their specific brain chemistry to their environment.
People necessarily perform crimes to adapt to rigid and inefficient systems, often historically founded on unforgivable humanitarian disasters.
But I feel like that's obvious.
(Example: Fareed Zakaria, in a podcast once)
A lucky man falls down the stairs and breaks his leg. "Phew, I'm so lucky I didn't break my skull!"
The problem with owning things is that it is usually zero-sum. A thing can only owned by one person. This means that owning things reduces the opportunities of other people.
And here is also the biggest problem with the entire article: if everybody applied this advice, would everybody be successful? Probably not.
Perhaps I'm overly cynical, but I think a better title would be: "how to rig the system to your advantage".
If one new oil well is discovered every year, then you can say that who own that growth is zero-sum. You can also say that the amount anyone can increase their wealth via oil wells by is zero-sum.
Sum over the growth of capital over the year, and you find that the allocation of the ownership of growth is also zero-sum. And so are the proceeds of that yearly growth.
If your claim that the growth of the world's productivity on a yearly basis is unbounded, then sure, zero-sum isn't an applicable term.
If your claim is that you can generate growth without hampering the growth of others; that's true to a point. Someone needs to sweep the floors and take out the trash. You can make robots do it, but those robots need to be made and maintained by someone. Someone needs to make food as you do it. Someone is on "robot design duty" and someone is on "farming duty". The person on "farming duty" can't stop without someone coming in to replace them.
But I haven't been able to see any evidence of that claim being true.
This is independent of the relative merits of the products we are both selling. Maybe I forced my products to be shown in the major television channels, because I also own the television channels and you dont.
There is a limited amount of goods and services you can sell to the inhabitants of a planet with a population of 7.7 Billion.
What if the planet would have only a population of 7? Each person owning one of the 7 continents? Let's say the persons owning Africa and the person owning North America, due to some meteorological disaster, and unfortunate investments, had to sell their respective continents to the hotshot owning Europe?
If the money supply is infinite, then has no value. Now from the finite money supply in the world who is going to gain the most?
Economic output is non-zero sum. Consumption/production scales up and down elastically.
The money supply is adjusted independently in order to drive “ideal” output growth while maintaining “ideal” inflation levels.
But you fail to note the creation of a market happens by destroying another. Amazon vs Book Shops, Uber vs Taxis, Cars vs Faster Horses, Netflix vs Theater Industry and DVD Rentals.[2]
There is a limit of resources and economic output per year, the ones owning the more productive processes will get a progressive bigger share of the output. More and more, lots of activities are zero-sum and the long term is a complete zero-sum. [3]
It's not a view from mainstream economists, because many do not want to be seen as heirs to Karl Marx ( an Economist let's not forget, not a politician). It's also a discourse popular from a certain political current, that spouses the "we can all benefit mantra".
I prefer to use Constrain Theory [1], and be reminded that if somebody creates a more efficient Amazon, faster, cheaper, better then Amazon will not prosper. If somebody opens a new service, or creates a new product, there will less disposable income from the customers of this product to shop at Amazon.
Reminds me of a story, normally told with several variations so my details are not exact. When Henry Ford II toured some factory, he taunted some workers with the fact increased Robotic Automation would make Ford less dependent on the workers. The workers replied asking Ford how many cars he was expecting the Robots would buy?
[1] "Exponential Economist Meets Finite Physicist": https://dothemath.ucsd.edu/2012/04/economist-meets-physicist...
[2] "Capitalism: A zero-sum game": https://www.business-standard.com/article/markets/capitalism...
[3] "The Zero-Sum Economy": https://www.project-syndicate.org/commentary/zero-sum-econom...
This isn’t true. If you go back to the origin of human civilization, economic “output” was limited to survival - food/shelter. Today survival represents an ever-smaller fraction of economic activity. Where did this additional activity come from if it was limited to replace preceding activity?
Similarly real gdp per capita has been increasing since the beginning of time. How can this be possible if the economy is zero sum?
Nope. It's obviously false by inspection - the GDP grows most years.
At the micro level, suppose I give Picasso $25 worth of art supplies. He then creates a painting with it worth $1,000,000. This painting becomes a valuable asset that he can then use as collateral for a loan. Banks loan money by creating it.
I.e. $999,975.00 magically appeared!
I wish the schools would teach this stuff. In my experience, very very few people understand this.
The bank did not create money, the bank loaned money up to the percentage the government allowed it to leverage itself...
"The Fed's Tools for Influencing the Economy": https://www.investopedia.com/articles/economics/08/monetary-...
"Reserve Requirements:
The Federal Reserve also has the ability to adjust banks' reserve requirements, which determines the level of reserves a bank must hold in comparison to specified deposit liabilities. Based on the required reserve ratio, the bank must hold a percentage of the specified deposits in vault cash or deposits with the Federal Reserve banks..."
"...By adjusting the reserve ratios applied to depository institutions, the Fed can effectively increase or decrease the amount these facilities can lend. For example, if the reserve requirement is 5% and the bank receives a deposit of $500, it can lend out $475 of the deposit as it is only required to hold $25, or 5%. If the reserve ratio is increased, the bank is left with less money to lend out on each dollar deposited..."
The monetary value of Picasso work, is tied to the competition between the ones who have a part of the current money supply, and how much they want a Picasso. If Picasso could produce 10,000 paintings per day, so that each person in planet could have one, we would not be talking about millions of dollars per painting.
So no money is being created from nothing. It's leverage plus application of constrain theory. The main constraint being the amount of money printed and the leverage on the assets.
This existed long before the government took over the banks and decoupled it from gold. It's called "fractional reserve banking".
> The bank did not create money
It absolutely did. It's how fractional reserve banking works. The "fetters" are the collateral backing up the loan. The money is destroyed when the loan gets paid back. I know it sounds like magic, but it isn't.
If Picasso decided to go live in Zimbabwe and decided never to sell his paintings to other than Zimbabwe nationals, paying on the local dollar, that would limit the loan the bank can collateralize with the asset, in other words the painting.
The bank does not create money.
"Fractional Reserve Banking: The Myth of Creation of Money" :
https://medium.com/politicoid/fractional-reserve-banking-the...
That's what I wrote. The value of the painting was created by the painter, and money was created to back it. (And that money is destroyed when the loan is repaid, until the next time the painting is used as collateral.)
This is how the money supply (in free banking) naturally rises to match the asset wealth in the economy.
> The bank does not create money.
Of course it does. Your linked article is simply wrong. Trying to equate it to gold bars is a grossly wrong equivalence.
As the previously mentioned article states, the bank does not create money, it increases the Velocity of Money.
"Banks do not create money out of thin air": https://voxeu.org/article/banks-do-not-create-money-out-thin...
If the bank did not create money, and simply loaned out the deposits, the depositors would still not find their money there when they run to get it.
Banks loan out a multiple of the deposits, meaning they create money.
Your theory that FRB doesn't create money is a fringe one, which should give some pause. What should also give pause is the gold example, which doesn't apply, and the false notion that bank collapses from runs only happen when they use FRB.
https://www.pragcap.com/the-money-multiplier-and-the-myth-th...
"Banking and the Laughable 'Money Multiplier' Myth"
https://www.realclearmarkets.com/articles/2016/06/29/banking...
"Money is money and credit is credit. They are not the same thing, they are completely different financial animals."
and:
"Only the Federal Reserve can create money"
How does the author imagine we had money before 1914?
Perhaps the author and you would be interested in reading "Monetary History of the United States" by Friedman, an actual expert on this topic.
"Do banks really create money out of thin air?": https://www.weforum.org/agenda/2015/06/do-banks-really-creat...
"...The phrase “banks create money” forms part of the popular discourse, but it conveys an erroneous representation of the banks’ role in the money creation process..."
"...Without the correct understanding, the misguided belief that banks create money out of nothing will continue to influence models of the financial sector and monetary policy interventions..."
"...The traditional view adopted in the money supply debate is that banks create bank money by granting loans. This explanation is then extended to suggest that banks thereby create money out of nothing. However, this is an inadequate caricature of the process of bank money creation..."
"...To an outsider, it appears as if by recording an asset account entry connected to the buyer and by recording a corresponding deposit entry, the bank has created money out of nothing; this is the illusion of the bank having created money..."
"...But this is only the prima facie appearance and not the truth of the matter because the outside observer has neglected to acknowledge that the deposit value records the value-for-value exchange conducted through an underlying transaction. In reality, the seller no longer has a house and the buyer now has a house..."
The painter created the wealth.
Bankers themselves don't describe like that: "Economists frequently assert that banks can create money out of nothing. Bankers have a different opinion: for every loan they need to attract money. And, strangely, they are both correct. How can this be reconciled?"
ING: "The money creation paradox" https://think.ing.com/uploads/reports/Money_paradox2.pdf
"Why don't Economists understand money?": https://youtu.be/EObtwxpDSzk
Please see particularly as of this point (Video at correct time): https://youtu.be/EObtwxpDSzk?t=804
"If You Don't Understand Banks, Don't Write About Them": https://www.forbes.com/sites/francescoppola/2019/09/17/if-yo...
> if everybody applied this advice, would everybody be successful?
He literally says it would not work for everyone as it requires a baseline level of success already achieved.
Can you give some examples? Certainly this is party true with real-estate in some large cities, but there are lots of places where land is available and real-estate isn’t yet zero-sum. I’m having a hard time seeing other examples, so I’m wondering why you said “usually”. I would assume that Sam is also referring to software, where ownership means owning all parts of production, or means owning the rights to IP & creative work. In the software startup and in the creative art sense, I don’t think ownership is zero-sum at all. Ownership there is more about having control over the income and expenses of all parts of your business, and avoid rental traps. In general, this does seem like good sound advice to me.
> Perhaps I’m overly cynical but I think a better title would be: “how to rig the system to your advantage”.
That does seem a bit cynical when the majority of points were things like ‘work really hard’ and ‘believe in yourself’ and ‘think independently’. It’s hard to even find something I would consider ‘rigging the system’ - like owning things and having a network are the only two, but those are pretty generic and more centered on what I should do more than affecting the system.
Not that there’s anything wrong with being cynical. ;) We can’t all be billionaires, and using the Forbes list as the example of success is questionable and gives real reason to be cynical. I’m wondering what your list of how to be successful looks like, and what makes it different?
The only thing I can think of to which this applies is collectables.
Land? No. There is an aspect of land ownership which is zero sum, but if all you want is land, it's always for sale, and the value of a given plot can be improved with labor and investment. The land the Empire State Building sits on would be very valuable just sitting on Manhattan Island, but is even more valuable with an iconic skyscraper on it.
Businesses? Absolutely not, they can be created for modest amounts of money at any time.
"Real capital" like equipment? Clearly not, every purchase is presumably profitable to the seller, meaning they get enough money to make another one for the next customer in line.
Yes, everyone can be successful. It is not zero-sum. Someone else's success is not at your expense.
Though there are some endeavors that are deliberately set up to be zero-sum. Like the Olympics. Only the fastest wins a gold. But note that this is a completely artificial constraint. Real life in a free market society is not like that at all.
As the others said, taking serial risks is a luxury. I did not have that luxury coming from a family on wellfare. I had to finish high school with honors, I had to go to college, I had to graduate, I had to find a job, and I had to pay my first rent.
There was no messing around with a startup in my parents' garage. Didn't have a garage. Didn't even have a computer while the other kids did. People describe garages as a rags to riches story. Nope. If you can do that, you are already ahead. Stop bragging about starting out in your garage.
Here is what it's all about. THERE IS NO FORMULA. Is success a product of pure luck. No. Is it a product of hard, non-stop work. Also no.
The truth is in the middle, and the middle itself is highly individual. Life is about tilting the scales of luck in your favor with hard work, but there is absolutely zero guarantee.
Some people just walk into riches with minimal effort. Why? They were at the right place, right time, of the right age, enough means, and enough ability to take risk.
Others just have a nuclear motor up their ass, like Masa Son, who never stops until the macaroni sticks to the wall. Masa famously set out to produce one business idea per day. Is he a brilliant business mind? He has made some shockingly bad decisions, and have you seen his slide decks and the 300-year-long plan? The man is pure hard work, but if you read his story, a lot of stars had to align. Entrepreneurial parents, relatives in the US when he went to school here, etc. What's a smart poor kid in Peru to do?
And the rest of us? We try to work hard, we do our best every day. Will it work? No one knows. The variables are too many, and the luck factor will take it in either direction.
If I ever make it, I promise you, HN, I will not be talking about what YOU should be doing in order to become successful, and I will never start a podcast about how to live the "correct" life in order to make it. Tim Ferriss, I am looking at you, buddy.
What _will_ you do when you make it though?
Edit: will people in comments consider you flawless by then?
Who cares? I hope he enjoys it.
Even accepting the success criterial of "get rich" or "be important" some of the above are going to be fundamental for 99% of those who manage to reach the end line.
This article contains bad and harmful advice that will hurt many people.
I don't think "wife" or "husband" alone is enough of a keyword to fill up your life and be meaningful. So many "successful" dysfunctional families out there
For example, there's the popular P90X program to get fit in 90 days. So you get fit in 90 days. Then what? Stop exercising, and the fitness will evaporate like water on an Arizona sidewalk.
For another, if you want to be a successful writer, have a system of writing every day rather than some specific goal. And so on.
Periods of intense focus seemed to dramatically increase how lucky I got, though. I don’t think it was coincidence.
For example, if you want to get a better job in the tech industry, go to a tech conference where companies wanting to hire will be.
(The real reason for most tech conferences is its a recruiting tool.)
Besides, if you play your guitar every day, I can't imagine how you'd fail to get better at it.
And here's the gist of it all: Manage to survive long enough for luck to go your way.
It's like all the talk product/market fit "You will notice when it happens"
....okay?
In todays world, many people live with messed up dopamine receptors. And if you never had parents that really taught you crucial things, you're basically LARPing all your life-- emulating other peoples behavior without really understanding the "why?".
If you constantly getting your "hit" from social media and junk food "doing stuff you love" is anything but obvious.
That has different answers for different people. I've had this conversation several times:
- Them: "You work hard? Try working as a mechanic/builder".
- Would you like to change with me?
- Nah, I couldn't keep sitting 8h doing mundane office work day after day.
I'm a programmer, but I also helped build a building so I know what is hard physical work. It typically gives more satisfaction than programming, but programming pays better.
Because working hard is not a guarantee to a successful material life.
https://www.abc.net.au/triplej/programs/hack/2020-edelman-tr...
Success in life is mostly a function of starting conditions, i.e. where you're born and how rich your parents are. I know he mentions the US, but please let's not discount the billions of people around the globe who will never amount to anything no matter how hard they work. I was lucky enough to leave Greece soon after it was destroyed by the Economic Crisis, but not everyone was.
A lot of it comes down to luck too. Let's not idolise the people who got successful and keep repeating the same points over and over again of "work hard" and "networking", we've heard this before so many times. What about the people who worked hard and networked and still failed? I'd rather listen to them.
Finally, some people become great musicians, great inspirational mothers, absolutely incredible teachers, yet they get paid pennies. If I had to name successful people I've met in my life I would certainly put at the top my teachers in school who slogged through so much BS to deliver the best teaching to the children. People with lots of money are very down my list.
The world is full of individuals like this who fail to create something of value and importance. Not one point here focuses on building people and leveraging the power of a team to accomplish something great. There's lots of ways to get rich, but they're not all equal.
Previous discussion, Jan 24, 2019, 299 comments: https://news.ycombinator.com/item?id=18992914
Looks like he hasn't said anything about it since.
https://www.google.com/search?q=basic+income+site%3Ahttps%3A...
- work hard
- have ALOT of luck
There are thousends of ppl that work hard and have great ideas. Only a fraction of them makes it big.
It's the action that your body does , but both are based off the mental task of predicting.
Predicting social , economic and technological trends at the macro level is no different than predicting the reaction of a person you are talking to at the micro level.
And you constantly change your position on an idea or a topic and you can also venture into a different topic just as you would when you go long/short on the stock market, or when you close your position in General Electric to open one in Costco.
For some definition of “better”. I’d personally go with backpacking at this stage of my life and what I currently value.
"You don't want to be in a career where people who have been doing it for two years can be as effective as people who have been doing it for twenty"
^ that is very good advice.
However, I would point at Jack Ma as being someone from humble origins. Only 67th now.
This is the true test of self belief. In the corporate world this is why many ideas don't take off or take off in a half baked manner. Just like self belief is visible, the absence of it is also visible. I can quite figure out when someone is proposing an idea or wants to make something work but they themselves don't believe in it. The corporate world is littered with such people and leaders as well.
My boss put it very well 'The moment you think what's in it for me, you've lost the plot". This question does not arise in anyone who has this utmost self belief in what they do.
Self-belief can also be a problem when it turns into overconfidence. See Pinky and the Brain.
For most regular people, taking a risky N-year startup "sabbatical" could severely limit their later career options, along with the opportunity loss of salary. If you ask most 20/30-something young professionals where their priority lies, it's probably either climbing up the career ladder, saving up for a house, or planning a family.
https://www.marketwatch.com/story/photos-from-one-of-the-mos...
I guess using uncommon words is the way to go
#0 Be given lots of money to start with.
#14 Start telling everyone else what they need to do, that you didn't.
And the only way to impress a bunch of tin-eared monkeys is to either produce a hill of bananas or to spend too much of my precious time working in a banana factory.
Both seem bad.
If you feel as though you could feed a bunch of VC advice into a database and have your ML algorithm generate something similar to this post, you're right. If you don't subscribe to the philosophy that success coincides with doing things that make VCs richer (with a small chance of benefits for yourself too) there's not much in there for you.
I guess this is fine and inevitable. But it makes me wonder where to go to find focused quality discourse about entrepreneurship / getting rich if not HN.