If you're so smart, why aren't you rich? (2018)
technologyreview.com
technologyreview.com
If everyone were trying to maximise their own wealth, we would have no nurses, no-one would be a firefighter, no-one would be police, no-one would work in the military, etc etc. Vast swathes of jobs would have unfillable vacancies because everyone would work them for at most a couple of years whilst living out of their car or similar in order to save, then they'd be hustling and trying to start their own business or get a job in finance or whatever.
I have a fairly solid academic background, and of my cohort, less than half, maybe even under 25%, went into traditionally well paying fields.
Most are more interested in driving academia/science forward or generally on other social goals as long as they have enough to pay for the house and car.
You could equally ask why doesn't everyone lift at the gym 10+ hours a week, or run 50 miles, or aim to learn a new recipe every week, or whatever else. Different people have different goals and that's wonderful. Money is just one of many balls that people try to juggle.
For example, I always had a dual goal of:
1. Gain wealth. 2. Gain knowledge and critical thinking skills.
I was trying to get rich, but only in ways which would result in me gaining more knowledge and critical thinking ability on the way. So I was going about it in a very specific way and missing out on many possible paths as a result. It's why:
- I completed my university degree instead of dropping out early and becoming a founder.
- I chose to get involved in complex open source distributed systems projects instead of building social media apps and add-ons.
- I changed companies multiple times, even when I found ones which paid a high salary for little work. There's only so much you can learn at one company in one industry. I wanted to see how software works across different industries.
- I avoided cutting corners.
In retrospect, I can only speculate that maybe I would have been successful in gaining wealth if I had been laser-focused on that and disregarded self-improvement.
Still, I think the article makes a critically important point; it's mostly about luck. In other words; the vast majority of people who were 100% laser-focused on getting rich and couldn't care less about self-improvement also failed to get rich... And these people, those who survived the ordeal, have literally nothing to show for it.
They probably blame themselves for their failures and engage in self-loathing because they're not intelligent enough to realize that it's not their fault; it's just probability.
Anyway, when it comes to social and sexual relationships; knowledge and critical thinking ability can often get you the same things which money can get you, but better quality.
The best people are naturally attracted to knowledge and intellect.
That is a pretty narrow-minded way of evaluating other people's worth...
I know they can grow out of it, I have seen it, but I don't have the time or energy for people at that stage of development.
If you mean curiosity as in academic achievement, then I think this is a deeply disrespectful way of thinking of other people.
If you mean curiosity as in having empathy for the people and world around you, and not being a narcissistic sociopath, then I probably agree with you.
But from what you wrote earlier, I get the impression you're talking about the former rather than the latter...
I don't know about you, but my impression is that people who ended up in academia are mostly there because it seemed like the path of least resistance. They were indeed not optimizing for wealth, but optimizing for comfort by not making the scary decision of quitting the track they've been on their whole life.
But then I finally made the scary decision to quit the track I'd been on my whole life and started teaching at a university full time. And I've never been happier. What a great, fulfilling job, to see my students run off and start careers in high spirits.
I'm not rich, but I have enough money for my modest lifestyle, and you'd have to pay me a VERY large salary (say $2 million per year) to trade my remaining life for some lousy product du jour.
This is true of pretty much every profession. Academics get a lot of heat because there is some silly feud around elitism and common people but the reality is most people in every career are there because it's easy. I'm a software developer by trade, not because I went through hardship to become one but because I happen to really enjoy writing software. I'm just lucky it happens to be lucrative.
So many of these answers seem to presume that wealth and success are things that pretty much anyone can just reach out and take if they really wanted to.
The main issue I think though with discussing things like this on an Internet site is that the world is not homogeneous. In order to have a reasonable discussion we have to exclude obvious edge cases like how there is luck involved in not being born in North Korea.
There are also effects _on the individual themselves_ like e.g. it's more likely that a person will be more intelligent if they have good nutrition throughout pregnancy and early childhood.
However, not withstanding that, I also don't believe that luck is a barrier to success apart from at the absolute top levels.
The analogy I would give is with athletics. You won't take Olympic gold without top tier genetics. But without training you won't even be able to run 10km. And to be "rich" in this world you don't need to be in the Olympics. You just need to be competitive.
It really depends on what we are talking about. I can point to many, many examples of people both in my personal life and famous people who I do not know personally who have been successful by any reasonable standard, both groups of which it is trivial to see to those close to them have not merely been lucky.
I know some proper who have become quite wealthy and have seen the ways money changes them. It’s hard for the mind to justify overabundance in a world of need, so we must rationalize our fortunes as ‘deserved’ for being ‘smart.’
Another way to live is to strive for enough. Enough to help others, to take care of most any emergency, enough to take breaks now and then and be with people you love.
In a vacuum maybe, but presumably market conditions would adjust to increase pay for these positions until demand was met (or some other innovation would take their place). That's the whole point of markets, is it not? If there is legitimately enough demand for something, it will be supplied if possible.
The phrase "vast majority" to me is shorthand for "I have no data but a strong gut feeling about this". As someone who grew up not poor but close enough to it to have a healthy fear of it, focusing on driving science or social goals is admirable, but a bit of a luxury thing.
For some value of "success" that doesn't include whatever Findus and Pettson are doing here: https://littlefinland.de/8487-large_default/pettson-and-find...
Even with smarter investment choices, I could've had a lot more, but I don't find that interesting either. Building stuff; only thing I care about.
I truly am having trouble making sense of the purpose of your comment. Would you mind clarifying?
This is evidence that other factors than luck play a role.
How is that evidence? That is like playing the lottery once and winning, then saying you could be much richer if you continued playing the lottery but choose not to because you have other priorities.
That would only be true if you said you chose to stop playing because you knew you were going to lose. But in the example (which was based on your point) the person is claiming they would continue winning if they continued to play.
Respectfully, I’m waiting for an answer from the author of the post. They wrote it, they’re the ones who can explain what they meant. This speculative conversation we’re having isn’t going to get us closer to the truth of someone else’s intention.
The reasonable worst case with any application of skill (e.g. don't put your entire net worth into a risky business) is that they end up roughly where they started.
A person with the correct skills can choose to work at a charity or at say, a well paying software job. One choice gives them more money than the other and there is no luck involved.
This is self evident really, I assume that you also do know this, but then it's confusing when people focus on luck as if most people are even playing the game at all.
edit: Actually, that's probably a better way of framing it. The upper bound on wealth for a person is very much luck based, but almost no-one is operating remotely close to their skill cap, so in practice it doesn't matter that much.
You might need luck to make a billion, but to make a few million just needs dedication barring some obvious handicaps such as e.g. being born in North Korea.
Sounds nice. Any recommendations on how to get into this game? E.g. how / where do you find your exits?
(While it's nice to have a model, "fortune" has been synonymous with "luck" and "wealth" since Roman times [2], so it's not exactly a new concept)
Because I'm too risk averse to try high risk and high reward pursuits like starting my own company, or doing moonshot projects. Imagine the aversion people have to starting projects from scratch in a stack that they don't know and apply that to bookkeeping, laws and regulations, billing, marketing and other aspects that aren't focused purely on code.
I'm also the kind of person that doesn't want to sell snake oil by being a charming salesman, in contrast to the droves of borderline-scammers out there making projects to extract money from people who don't know any better (also applies even to many early access games, many of the crypto projects, the various lifestyle gurus etc.), in addition to knowing that many of the things I could built have already been built by others and built well.
At the same time, I'm not brilliant enough (e.g. an outlier) to have breakthrough successes and not focused enough to achieve greater success through sheer effort, which would make me sacrifice my health, time and relationships. Having a stable 9-5 where I still do good work might be better in that way rather than working 80 hour weeks for a company that might still go under in the end, survivorship bias in regards to success stories should probably be kept in memory.
In other words, I wasn't lucky enough to born with great inheritance or to be at the right place in the right time and other forms of success do somewhat elude me for now. Not that having employment, health, quality of life and good relationships isn't success in of itself, just not the kind that people glorify and chase.
That said, in regards to most things, people who are good at a craft have failed more times than others have even tried. Unless they're in a regulated sector, then they might just be in jail.
I will say that it's still immensely cool to see when the stars align and people who are smart and hard working enough end up in the right place at the right time and we get awesome stuff like entire industries starting up (e.g. how VR is getting more mainstream, to some degree the whole LLM thing, the rise of ARM processors etc., advances in graphics with the likes of Unreal Engine, programming languages like Go filling in all sorts of niches, people getting up and making engines like Godot; not that all of it is focused on money, but it's still cool). Neither someone's innate abilities, nor hard work, nor luck should be discounted.
What came out of this study? The article left me hanging.
If we instead look at the effectiveness of the output then there can be massive disparities.
Einstein thinking about relativity vs me digging a hole to China.
Einstein is working the same hours but the output is 9999999x more valuable.
Einstein's work was very important, and benefitted us all greatly, but it was only enabled by countless others doing less glamorous, less rewarding work.
If a company hires 10 people and pays them 100/hour then all the value created by these people will belong to the company - 10x100 hour that the company paid.
If the value happens to be 3 million then the shareholders just made 3 million - (10x100).
Also this scales for the shareholders pretty much forever, capital is a limitless resource when compared to hours in a day.
There is no need to make a freaking model out of something so obvious.
If you want to get rich you need to get in on the equity game somehow (invest, start a company, FAANG RSU-s, does not matter)
Working more hours or getting paid more per hour does not scale to rich levels
The game is rigged worse than a casino :)
But consider that almost the entire first half of the Das Kapital's first volume is precisely a (very tedious) formulation of precisely this: "workers produce more than they get to consume, that's how non-workers can be sustained". And you can find there the criticism of other contemporary economic theorists who apparently disagreed with that ("nah, the workers spend, like, 8 hours of work just to make up for the materials that's consumed in the manufacturing process, so the actual profit is made only when they work the 9th and later hours so if the work day would be restricted to 8 hours then all the factories will go bust; would someone please think of the entrepreneurs!").
"Luck" exists, I believe, but saying that person's wealth depends mostly on luck alone, is dismissive of all other human individual and collective qualities that are actually at play.
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P.S. I also agree with other comments here, correctly observing that being rich is by far not an objective for everyone. On the other hand, hopefully, wealth is a mean to achieve some other life objectives. Otherwise it's just sad indeed.
The way I see it, (though I could be mistaken), wealth empowers individuals to engage in pursuits they value without external concerns.
Exceptionally talented professionals (e.g., nurses, doctors, scientists, lawyers) are quite frequently rendered incapable of addressing issues they are passionate about due to financial constraints or bureaucratic indifference. Essentially, financial resources enable one to transition from being merely aspirational to being influential (contingent, of course, on the specific situation). Consider activism: many people strive to support their communities, but often, funding for such initiatives is lacking.
How can this be good design? No, forget that: how is this even acceptable design? Now I will remember the experience for at least a few weeks and avoid clicking on anything that points to that site since I already know it is probably going to be a hassle.
Can someone explain the design decisions to me?
Oh, and if this comment seems irrelevant to the subject: see what I mean how annoying it is to have to wade through a bunch of nonsense before you get to the bits you actually care about?
They are trying to be smart to get rich?
Just the same way that I don't get Temu. I buy a lot of stuff on Aliexpress. Mostly electronics, odd tools, materials for hobby projects etc. I would think Temu would be interested in my business. But every time I've clicked on a product link there I get this stilly spin-the-wheel nonsense. Which just represents a hurdle I have to get past to order something. After you get that a few times you grow tired of it. So now I never click on Temu links. I go on Aliexpress instead because they'll sell it to me without this whole nonsense.
Again, how does this help them make money? Is it a kind of filter that is supposed to repulse people like me and attract people who find this kind of interface attractive? Presumably because they can get more money out of people with certain traits?
I don't get it how interposing a lot of nonsense between me and the things I am trying to access or buy is supposed to boost revenue. Can someone explain this to me?
Recently, after I upgraded to macOS Sequoia 15.0, I realized that my current AdBlocker was not working in Safari. This was due to a conflict between AdGuard and Apple iCloud Private Relay.
In that short window of a few hours, I realized that the Internet is an unforgiving place to browse without an AdBlocker. As I was on my usual chore of collecting and sharing interesting, weird, and strange finds for Hacker News, I was stunned to see how unusable the browsing experience had become.
Of course, I don’t hate ads. It is a legitimate business model. I’m just not too keen with the over-done ads that is everywhere, and in everything.
So, I Block Ads. And recently, I wrote an article to remind myself of how life on the Internet is today.
Following your post I arrived at this:
https://github.com/AdguardTeam/CoreLibs/issues/1914#issuecom...
You might want to let the developer know that posting on the forums is absolutely not “reporting the problem to Apple”. They need to file a proper bug with Feedback Assistant, and ideally spend one of their two yearly Technical Support Incident (TSI) to get priority, seeing as it’s a paid app.
What's the opposite of a tautology? Because this headline is it.
If wealth creation is purely luck based, as the headline implies, then maximising wealth creation is purely about getting luckier... and taking this information into account will likely do you no good whatsoever
I think "oxymoron"? Close, at least.
2. More on the subject of the article, the simulation is probably good but the conclusions being drawn are not as robust as they might appear. For the sake of argument, lets say that this simulation outcomes align perfectly with reality. That doesn't conclusively demonstrate that wealth is random with respect to people's decisions and abilities. The random events in the simulation might be driven by people's preferences, abilities and habits (hereafter, "skills") which are themselves randomly distributed.
For example, lets say that everyone encounters an opportunity to become a billionaire at a perfectly constant rate of 1 opportunity/year [0] and the probability we can capitalise on it with our skills is normally distributed (ditto for ruinous events). That would be indistinguishable in outcomes from random lucky events that are normally distributed, even though in reality our skills are actually playing a huge role. That is to say: reality can be perfectly aligned with the simulation even if the assumptions of the simulation are different from the realities of reality.
In the real world it is probably a mix of both. There is certainly luck involved in becoming absurdly wealthy, but there is a also an element of skill that shines through in some people who seem to have a miraculous ability to make their own luck. I've met a few of the inverse who it would take much more than luck for them to get wealthy, there are people who fumble their chances.
[0] Picking an absurdly high rate for the sake of argument.
I think your assumption is wrong. The key idea is that the outcome of random lucky events depends on the amount of capital one already has. A lucky event doesn't add to capital, but multiplies it, so consecutive lucky events accumulate creating a long tail.
If you believed in Bitcoin in 2012 you probably wouldn't be rich today, if you were living paycheck to paycheck at the time. If by 2012 you already had some spare capital from getting lucky in the dotcom years, on the other hand...
There are also a bunch of game-theory models which show things converging on massive wealth disparities, even when every actor has equal stats.