Kind of makes a point to have a wealth tax. As the top 1% of w2 earners are paying a disproportionate amount of tax relative to too 1% of wealth holders.
That or just raise interest rates to force these people to sell more equity
Yeah but every time anyone actually does implement a wealth tax they start it at like $500k or some similarly stupidly low amount and then everyone starts (somewhat rightfully) complaining that granny has to sell her house because she can't afford the tax.
It seems to obvious to me, like just start it at something like $5M. Nobody will be affected who can't afford it. It's like they're trying to implement it in a way that makes people hate it.
What is the point against wealth tax? That the rich will flee, leaving us.... better off in every possible way?? This is like that episode of futurama where fry befriends the parasites he found at a gas stop
(Just an objective comment, I'm not positioning here) this honestly puts the "tax the rich more" in perspective. A tiny tax increment to the rightmost column would provide more money than 100 years of all the other pitiful contributions together.
Existing taxes are mostly on income, not wealth, and the US has one of the most progressive income tax systems in the world. Confiscating some fraction of Tesla and SpaceX will destroy lots of economic productivity for a one-time bump; it's a worse trade-off than just printing however much money and taking the value through inflation.
Part of the problem I have with graphs like this is that they don't differentiate between paper wealth, being able to get a loan against the paper wealth, and hard assets (real estate, vehicles, cash).
Let's take a personal anecdote for an example: I joined a startup when it was early-stage, stayed for a few years, and exercised my stock options when I left. The startup is now "successful", but still private; my shares have also surely been heavily diluted. I have no idea when I'll be able to sell those shares or how much they're really worth. I have no way of turning those shares into quality-of-life improvements for any foreseeable future. Do they make me "wealthy"?
I don't think most Americans have a problem with rich people buying nice houses and nice cars, and using their wealth to pay for private staff. I think the real problem is how much of the wealth is allowed to stay off public markets. Cargill is worth more than $50 billion and its stock is not available on public markets. The growth in wealth of most AI companies - Anthropic, OpenAI - happened off of public markets, and so none of it trickled into the American middle class by their retirement accounts. Venture capital is keeping companies private for longer because, quite simply, none of the investors need the cash to pay for their cost of living, so they're quite happy to let paper gains continue to live on paper.
If your company has revenues of $X million a year or more, you should be forced to make public financial reports (effectively forcing you to list stock on a public market). Period. I think economists will naturally disagree on how much X should be, and that's fine, but I have little doubt that there should be a line like that, somewhere. Concerns about public markets forcing short-term thinking are a different problem, one addressed by mission-lock implements (Eric Ries's recent book Incorruptible is great here). Public markets ensure that gains in wealth are shared more broadly across the economy and increase tax collection by incentivizing more frequent buying and selling of the underlying stock, since those are taxable events.
Does factor in the K shaped reality we're entering where if white and blue collar jobs become automated there will be only rent seekers and extreme unemployment?
> In 2011, Michael Norton and Dan Ariely asked more than 5,000 Americans how they thought wealth was split between the five fifths of households, and how they would ideally split it. The Companion spreads those five shares across all 100 percentiles of the 2026 wealth total in a smooth curve (Appendix 3). Many different curves fit five numbers, so these two shapes are only illustrations. The actual bars come from percentile-level data. These two curves do not.
I would flatly reject the idea that a just-graduated neurologist with a negative net worth due to loans is “poor”.
Wealth being the integration of gains - consumption over time makes it a poor metric for looking at society as a whole.
Something like 50% of Americans will be millionaires at some point in their lives—upper quintile per this chart, typically later in their earnings years. Almost all of them started “poor” as young adults, per this chart’s definition.
I don't disagree with you. Obviously a doctor can bring in a lot of money. In the same a stock can be valued as the sum all future cash flows w/ a discounted cash flow analysis, a doctor's future income can have a quite high valuation.
That being said, one accident or illness that strips away that doctor's ability to earn, leaving them in a soul crushing amount of debt that can't be discharged via bankruptcy. Their debt obligations are real.
With this kind of wealth distribution, there's no point doing any job which services regular people. Everyone should become an informant, bodyguard, lobbyist or propagandist for a rich person. That's going to be the only kind of job that pays in the future.
Look at that last bar; consider just the annual yield or interest payment on that wealth; soon, it's going to be more than all other bars combined. If people understood the situation, they would all stop working and start making lists of who these people are and work for them. That's the only logical (legal) thing to do. Every other job or career is a waste of time.
Yes but I'm thinking about just the yield on that last bar.
Given that the Shiller P/E ratio is now 40 (under 3% of the value of the assets), the yield is actually a pretty small fraction of that last bar... but even then I'm saying one year's yield could exceed the worth of all the others if things continue.
But IMO, it's already the case that the economy is centered around the free money/proceeds received by top 0.1%. This is why we saw all that nonsense with COVID, DEI, Wokeism, etc... This is what happens when a small number of elites decide to spend a bit of 'spare change' on politics and social activism.
seems to be a general rule of life, some people are just born with the right combination to be really good at a certain game at a certain point in time. The only issue with wealth is that they can influence other games in which they have no ability just the same and that is dangerous for a democracy. Imagine if roger Federer was messing with the elections just because he was the best at tennis. Tech must be one of the few fields where someone believes that they are good at everything just because they made it.
Well, this was discovered long time ago, by Vilfredo Pareto, this is exemplification of his 90/10 rule. Having said that... We should be more honest here when we talk about wealth.
If one asks "how much, say, Elon Musk, is worth" we see some crazy numbers with kirjillions of zeros. But those are not "his" money, this is how much his companies are estimated to have. Yes, he has large personal fortune, but it is nowhere near those huge billions of billions amounts.
Second, staying with Elon example, his companies are paying people and other companies that pay people, so there is huge army of people who have food in the fridge because of Elon Musk (I've seen some estimates around ~1 million people overall). Again, they are nowhere near to be as wealthy as Elon, but still, they have a decent live thanks to his companies.
Elons ownership of those companies is not what puts food in people's fridges, nor is that amount of power concentration a natural, good or even defensible thing.
The whole point is that he shouldn't be able to exert autocratic control over large swathes of the economy and control that many people's lives.
> this is how much his companies are estimated to have
Not even ‘to have’, just ‘to be worth, if all of their shares could be sold at the price of the recent ones’. It’s a number only loosely (albeit obviously positively) correlated with actual spending power.
If you don't accept this particular argument then there are plenty more. This one is just quick and easy to convey.
There are very solid arguments backing up the same general points that require time to communicate and require good faith attempts to understand from the other party. But you probably don't want those either.
But millionaires only but nice houses and maybe a nice car or two, and send their kids to a nice college. Billionaires invest in companies that create many jobs. Maybe you can argue the houses and colleges create even more jobs, idk.
I’m not a one-percenter and my life is great. I don’t even understand why anyone cares about equality. The point is a rising standard of life. Equality isn’t anywhere near my top objectives. Pareto-optimal trades are good. Adding an implicit objective to minimize abs(w_i - w_j) makes many win-win things impossible.
The coordination win that came from “thou shalt not covet” is substantial and we forget it at our own peril.
You should care about equality because inequality tends to make places worse for everybody. Yes that includes those rich people. You can't go to the beach because it's all built full with private resorts. Those rich people can't walk the street and have to live in walled villa's for fear of crime. They also can't easily get married to who they want because they have to hold their assets. Vietnam is poorer than South Africa per capita, but significantly safer and more pleasurable to live. Would you rather be top 10% in South Africa or Vietnam?
What is interesting is that this was true centuries ago too. Life as a noble in the middle ages was stressful as hell and you couldn't even decide on your own lovelife. Read Seneca and the first thing he writes is that Augustus (whom he knew personally) was constantly complaining about his busy life and dreaming of a retirement that never arrived.
Rank order of income inequality (and coincidentally wealth inequality): South Africa > US > Vietnam
Rank order of preference to be top 10% in for me: US > Vietnam > South Africa
So your method does not disabuse me of my belief. It’s quite clear that equality has not made Vietnam more desirable than the US. In fact, there are some 400k foreign born in Vietnam (<1%) vs the US having 15% foreign born (a stark enough difference made worse by forcing foreign-born to be from non-neighbors). So I must reasonably conclude that my rank order is likely shared by others and that others too are not, in fact, lured by equality.
There is an old immortal tweet: cars have windows and go; houses have windows and don’t go; so it’s not the windows that make things go.
If inequality were as critical we’d expect a perfect rank ordering of distant migrant population attempts matching it. The numbers are so vastly different that one cannot conclude equality is of great importance to most.
Inequality by itself doesn't cause bad safety. the following countries have a higher share of wealth controlled by the top 10% than vietnam and also a lower homicide rate: singapore, uae, switzerland, sweden, qatar. that's just off a very quick search i'm sure there are more. Certainly in none of those countries are people hunkering down in private fortified castles for fear of stepping out in public.
You or the farmer you buy food from competes for farmland with Bil Gates.
You or the one providing your house builder with wood competes for lumber forest with Alex Karp.
The list goes on and on.
It appears trough technological innovation the standards of life rise in many ways but trough innequality it can affect the standards/ affordability of our basic needs.
Bill Gates buys huge amounts of land precisely for ecology: Beef meat causes global warming in a disproportionate way compared to chicken or even disproportionate per euros or per gram of protein compared to lentils. All ecologists agree that beef/red meat should disappear from our plates if we want to overcrowd the Earth with more equal people, and along with erradicating a hugely deathly disease that is malaria during his lifetime, Bill Gates will also have accomplished that dream too.
I find a lot of consistency of his audience in hating him for the very reason that he implements his audience's wishes. To this audience, there is no redeeming oneself.
This is about wealth inequality, i.e. how far the scale is leaning. This has, as the website explains, some funny effects: looking from the top, you are effectively starving the people that pay you and your descendands. That might work for a few years, but if everyone's hungry it's gonna be heads on pikes no matter how many bunkers you build and how much you pay for personal protection.
People care about equality because the absence of it is inequality, and that leads to political control. Even if you live a good life today, it is not guaranteed. Democracy, human rights, all can be eroded if everyone ignores politics and the economy.
You’re probably not one paycheck away from homelessness, and probably have the protection of the legal system provided you don’t upset the wrong people.
But you’re probably one health scare away from it, you just don’t realize it.
Do you care about concentration of power in a single person or single family? What happens when you have conflict with someone who has orders of magnitude more purchasing power than you? Do you think it's good or bad for the social order or democracy if one individual is able to exert more power than an entire city or state just based on inherited wealth?
Three good reasons to care about inequality itself:
1. Outsized political influence (in theory can be mitigated by laws controlling corporate spending, but obviously those laws themselves are subject to manipulation by the rich and powerful)
2. Distortion in who the economy serves. The beauty of capitalism is that it's a problem-detection and problem-solving system. If a narrow set of people have a huge portion of money, the economy becomes unduly optimized toward satisfying their wants and needs.
3. Despite best efforts, we ultimately must share a lot of the same commons. Even being a billionaire in NYC or San Francisco can't really give you a walk to work or your child's school that feels as safe as it does in a more equal society that takes better care of its unwell and poor.
Retirement age keeps increasing, public healthcare keep getting defunded. My tax money is getting used to enrich war mongers and my cost of life keeps increasing as a result of all of that.
Also my constitutional rights are ignored daily.
You understand why I might not be feeling very happy that YOU are doing great?
- Most of that wealth is tied up in assets offering services for americans (servers / warehouses). It would be much worse if the rich decided to spend all of that on consumption rather than keep reinvesting it in assets.
- Even the LHS of that chart Americans are some of the wealthiest in the world. A lot of the middle class from many other countries would love to be on the LHS of that chart.
- No one is expected to build wealth on a 40 hour minimum wage job. It is the bare minimum and most people get paid more.
- Americans don't want wealth. Our spending habits are abysmal. I suspect if you gave every American $500K the chart would revert back to this in like 12 months
Pretty jaw dropping. Most people here probably have around $5-10M in assets given we’re mostly in tech. It’s really eye opening to see that that $10M hardly cracks the top 98th percentile.
Though this is also a slightly misleading metric. Plenty of “poor” people are only temporarily poor. When I graduated grad school before starting at Google all those years ago, I had a negative net worth.
edit: sorry, bringing a SV perspective, realize my comment doesn’t apply to everyone
You guys must not have a lot of years of experience? My friends groups have a few hundred million dollars each (the junior developers are in the lower hundreds)
Even hearing from others on this forum helps! Sounds like most people haven’t been nearly as lucky-heavy fortunate as folks in irl circles. Very eye opening, and I appreciate everyone’s anecdotes.
> Most people here probably have around $5-10M in assets
There is no way this is true. FAANG pays well, but that is still an eye popping amount of wealth unless you're an executive or absolute top-echelon engineer.
> Most people here probably have around $5-10M in assets given we’re mostly in tech
Even in a SV world I'm trying to get my head around the logical leap that gets you to this number. Median comp in SV is <500k - that's 20 years in the business to earn $10m ignoring taxes & your actual living expenditure. Obviously we can jump that with equity, but that's still not moving the dial far enough for the "majority" to be up at those heights.
I don't see how we're getting anywhere near these figures without generational wealth (assume this is the answer).
That's ignoring taxes, too. Real take home for a single filer earning 500k in SF is ~$282k. Take out another $48k for median-ish SF rent ($4k*12) and that "$500k" is already south of 250 before most of your bills are accounted for.
Yes, salaries in the EU are generally pretty bad, and then you have high taxes on top. That's a good reason for why I left the place.
(Though to Singapore, not to the US. Salaries are higher than in the EU (though less than in SV), taxes are a lot lower than in either. Quality of life is higher than in the US for me.)
Even in the USA you're not getting to $5m net worth on salary alone, not without decades of it.
(Or as more likely, you've been in SV since Apple was a twinkle in the garage and your house is worth north of $5m.)
For comparison purposes, $5m invested well should be about $150k a year forever (3% safe withdrawal rate). If you have a net worth of $5m you should be able to live without working - if you want to (median US household income is $87k).
> For comparison purposes, $5m invested well should be about $150k a year forever (3% safe withdrawal rate). If you have a net worth of $5m you should be able to live without working - if you want to (median US household income is $87k).
This is all getting more annoying with capital gains taxes (and inflation, since capital gains taxes are usually levied on nominal gains).
I moved to a place with simpler taxes, including no capital gains taxes.
> If you have a net worth of $5m you should be able to live without working - if you want to (median US household income is $87k).
Depends on how much you want to live off.
> Even in the USA you're not getting to $5m net worth on salary alone, not without decades of it.
I don't think the original commenter was talking about juniors who just started?
Although looking at Levels.fyi, salaries in London are significantly more than Singapore, and that's with the CoL apparently being higher in Singapore.
I think your comment strikes at an issue that everyone feels but is hard to articulate - there's true poverty (Appalachia, say) and then there's "working-class poor" which you can try to define but nearly everyone puts themselves into it. Perhaps a better term is "paycheck to paycheck" - by almost any measure, anyone gainfully employed in the USA is rich beyond the world's wildest dreams - but telling a family making $40k a year that they make more than 90% of the world doesn't help.
"by almost any measure, anyone gainfully employed in the USA is rich beyond the world's wildest dreams"
I'm not sure your mental model holds. A lot of Europe has higher standards of living than the USA. And a lot of Asian countries have made huge strides in the last few decades. Also consider the difference between Mississippi and Massachusetts. I wouldn't say that anyone gainfully employed in Mississippi is "rich beyond the world's wildest dreams".
An awful take from someone who clearly hasn’t studied California itself.
Around 17% of CA residents live below the poverty line, which means MILLIONS of adults that are not students. Elderly are a significant chunk of that number.
> Most people here probably have around $5-10M in assets given we’re mostly in tech.
You would be surprised. Not only because, as you point out, recent graduates often have a negative net worth, but also because people tend to increase their spending in lockstep with their income.
Saving millions takes the intersection of multiple factors: sufficient disposable income, prioritizing investing over lifestyle, long-term discipline to stick to the plan, and luck to keep it all going smoothly.
Kind of makes a point to have a wealth tax. As the top 1% of w2 earners are paying a disproportionate amount of tax relative to too 1% of wealth holders.
That or just raise interest rates to force these people to sell more equity
Gonna make a law preventing them from moving away first? Your idea has been tried before. It reduces total tax receipts.
From 2014 to 2018 Bezos effectively paid a 1 % tax rate.
There are two versions of wealth taxes for nonliving people that make a lot of sense:
Yeah but every time anyone actually does implement a wealth tax they start it at like $500k or some similarly stupidly low amount and then everyone starts (somewhat rightfully) complaining that granny has to sell her house because she can't afford the tax.
It seems to obvious to me, like just start it at something like $5M. Nobody will be affected who can't afford it. It's like they're trying to implement it in a way that makes people hate it.
That’s the deal. You are asking the hand to tax itself and for sure it’s going to make sure the rest of the body feels the pain.
That’s why it is extremely difficult to make even modest improvements in a dug-in system.
What is the point against wealth tax? That the rich will flee, leaving us.... better off in every possible way?? This is like that episode of futurama where fry befriends the parasites he found at a gas stop
(Just an objective comment, I'm not positioning here) this honestly puts the "tax the rich more" in perspective. A tiny tax increment to the rightmost column would provide more money than 100 years of all the other pitiful contributions together.
Existing taxes are mostly on income, not wealth, and the US has one of the most progressive income tax systems in the world. Confiscating some fraction of Tesla and SpaceX will destroy lots of economic productivity for a one-time bump; it's a worse trade-off than just printing however much money and taking the value through inflation.
What if we didn't just tax them, but made the whole system fairer so money was distributed more evenly even without the government as a middle man?
Increase wages.
So.. when I google "median income eu vs US" I get some completely different figures: $51k / $64k-65k median for the US, and €21k in the EU.
So the median household in the US has 3 working adults? Is $211k household according to that page.
Part of the problem I have with graphs like this is that they don't differentiate between paper wealth, being able to get a loan against the paper wealth, and hard assets (real estate, vehicles, cash).
Let's take a personal anecdote for an example: I joined a startup when it was early-stage, stayed for a few years, and exercised my stock options when I left. The startup is now "successful", but still private; my shares have also surely been heavily diluted. I have no idea when I'll be able to sell those shares or how much they're really worth. I have no way of turning those shares into quality-of-life improvements for any foreseeable future. Do they make me "wealthy"?
I don't think most Americans have a problem with rich people buying nice houses and nice cars, and using their wealth to pay for private staff. I think the real problem is how much of the wealth is allowed to stay off public markets. Cargill is worth more than $50 billion and its stock is not available on public markets. The growth in wealth of most AI companies - Anthropic, OpenAI - happened off of public markets, and so none of it trickled into the American middle class by their retirement accounts. Venture capital is keeping companies private for longer because, quite simply, none of the investors need the cash to pay for their cost of living, so they're quite happy to let paper gains continue to live on paper.
If your company has revenues of $X million a year or more, you should be forced to make public financial reports (effectively forcing you to list stock on a public market). Period. I think economists will naturally disagree on how much X should be, and that's fine, but I have little doubt that there should be a line like that, somewhere. Concerns about public markets forcing short-term thinking are a different problem, one addressed by mission-lock implements (Eric Ries's recent book Incorruptible is great here). Public markets ensure that gains in wealth are shared more broadly across the economy and increase tax collection by incentivizing more frequent buying and selling of the underlying stock, since those are taxable events.
Does factor in the K shaped reality we're entering where if white and blue collar jobs become automated there will be only rent seekers and extreme unemployment?
It shows an "ideal" distribution. How did they calculate it?
https://dreamagainusa.org/method
> “What we think” and “Ideal”
> In 2011, Michael Norton and Dan Ariely asked more than 5,000 Americans how they thought wealth was split between the five fifths of households, and how they would ideally split it. The Companion spreads those five shares across all 100 percentiles of the 2026 wealth total in a smooth curve (Appendix 3). Many different curves fit five numbers, so these two shapes are only illustrations. The actual bars come from percentile-level data. These two curves do not.
I would flatly reject the idea that a just-graduated neurologist with a negative net worth due to loans is “poor”.
Wealth being the integration of gains - consumption over time makes it a poor metric for looking at society as a whole.
Something like 50% of Americans will be millionaires at some point in their lives—upper quintile per this chart, typically later in their earnings years. Almost all of them started “poor” as young adults, per this chart’s definition.
I don't disagree with you. Obviously a doctor can bring in a lot of money. In the same a stock can be valued as the sum all future cash flows w/ a discounted cash flow analysis, a doctor's future income can have a quite high valuation.
That being said, one accident or illness that strips away that doctor's ability to earn, leaving them in a soul crushing amount of debt that can't be discharged via bankruptcy. Their debt obligations are real.
Do you also flat out reject the idea that it is raining because there will be sun later?
With this kind of wealth distribution, there's no point doing any job which services regular people. Everyone should become an informant, bodyguard, lobbyist or propagandist for a rich person. That's going to be the only kind of job that pays in the future.
Look at that last bar; consider just the annual yield or interest payment on that wealth; soon, it's going to be more than all other bars combined. If people understood the situation, they would all stop working and start making lists of who these people are and work for them. That's the only logical (legal) thing to do. Every other job or career is a waste of time.
I think it is already way bigger than the other bars combined right?
Yes but I'm thinking about just the yield on that last bar.
Given that the Shiller P/E ratio is now 40 (under 3% of the value of the assets), the yield is actually a pretty small fraction of that last bar... but even then I'm saying one year's yield could exceed the worth of all the others if things continue.
But IMO, it's already the case that the economy is centered around the free money/proceeds received by top 0.1%. This is why we saw all that nonsense with COVID, DEI, Wokeism, etc... This is what happens when a small number of elites decide to spend a bit of 'spare change' on politics and social activism.
That's what most corporate jobs are . Us just working for the oligarchs.
It's crazy the hundred millionaires in the top 0.1% are closer to a homeless person than Elon musk.
seems to be a general rule of life, some people are just born with the right combination to be really good at a certain game at a certain point in time. The only issue with wealth is that they can influence other games in which they have no ability just the same and that is dangerous for a democracy. Imagine if roger Federer was messing with the elections just because he was the best at tennis. Tech must be one of the few fields where someone believes that they are good at everything just because they made it.
[delayed]
Well, this was discovered long time ago, by Vilfredo Pareto, this is exemplification of his 90/10 rule. Having said that... We should be more honest here when we talk about wealth.
If one asks "how much, say, Elon Musk, is worth" we see some crazy numbers with kirjillions of zeros. But those are not "his" money, this is how much his companies are estimated to have. Yes, he has large personal fortune, but it is nowhere near those huge billions of billions amounts.
Second, staying with Elon example, his companies are paying people and other companies that pay people, so there is huge army of people who have food in the fridge because of Elon Musk (I've seen some estimates around ~1 million people overall). Again, they are nowhere near to be as wealthy as Elon, but still, they have a decent live thanks to his companies.
Elons ownership of those companies is not what puts food in people's fridges, nor is that amount of power concentration a natural, good or even defensible thing.
The whole point is that he shouldn't be able to exert autocratic control over large swathes of the economy and control that many people's lives.
> this is how much his companies are estimated to have
Not even ‘to have’, just ‘to be worth, if all of their shares could be sold at the price of the recent ones’. It’s a number only loosely (albeit obviously positively) correlated with actual spending power.
But how can we tease people and instill them hate if we're being reasonable with arguments?
If you don't accept this particular argument then there are plenty more. This one is just quick and easy to convey.
There are very solid arguments backing up the same general points that require time to communicate and require good faith attempts to understand from the other party. But you probably don't want those either.
this is such a tired argument, we'd probably be better off splitting musk into a million millionaires than having it all bottlenecked into one person
But millionaires only but nice houses and maybe a nice car or two, and send their kids to a nice college. Billionaires invest in companies that create many jobs. Maybe you can argue the houses and colleges create even more jobs, idk.
You’re gonna need a lot more millionaires than that.
Tears fell through my eyes.
Democracy working as intended: people keep voting freely, people keep getting what they want.
“Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” -- H.L. Mencken
Shoot yourself in the head or cut your wrists with a knife?
Those are your choices. Choose freely!
Is the US two party system democracy working as intended?
Calling the USA a democracy when you don't even have a right to get a work permit to actually vote is insane.
I’m not a one-percenter and my life is great. I don’t even understand why anyone cares about equality. The point is a rising standard of life. Equality isn’t anywhere near my top objectives. Pareto-optimal trades are good. Adding an implicit objective to minimize abs(w_i - w_j) makes many win-win things impossible.
The coordination win that came from “thou shalt not covet” is substantial and we forget it at our own peril.
You should care about equality because inequality tends to make places worse for everybody. Yes that includes those rich people. You can't go to the beach because it's all built full with private resorts. Those rich people can't walk the street and have to live in walled villa's for fear of crime. They also can't easily get married to who they want because they have to hold their assets. Vietnam is poorer than South Africa per capita, but significantly safer and more pleasurable to live. Would you rather be top 10% in South Africa or Vietnam?
What is interesting is that this was true centuries ago too. Life as a noble in the middle ages was stressful as hell and you couldn't even decide on your own lovelife. Read Seneca and the first thing he writes is that Augustus (whom he knew personally) was constantly complaining about his busy life and dreaming of a retirement that never arrived.
Rank order of income inequality (and coincidentally wealth inequality): South Africa > US > Vietnam
Rank order of preference to be top 10% in for me: US > Vietnam > South Africa
So your method does not disabuse me of my belief. It’s quite clear that equality has not made Vietnam more desirable than the US. In fact, there are some 400k foreign born in Vietnam (<1%) vs the US having 15% foreign born (a stark enough difference made worse by forcing foreign-born to be from non-neighbors). So I must reasonably conclude that my rank order is likely shared by others and that others too are not, in fact, lured by equality.
There is an old immortal tweet: cars have windows and go; houses have windows and don’t go; so it’s not the windows that make things go.
If inequality were as critical we’d expect a perfect rank ordering of distant migrant population attempts matching it. The numbers are so vastly different that one cannot conclude equality is of great importance to most.
Inequality by itself doesn't cause bad safety. the following countries have a higher share of wealth controlled by the top 10% than vietnam and also a lower homicide rate: singapore, uae, switzerland, sweden, qatar. that's just off a very quick search i'm sure there are more. Certainly in none of those countries are people hunkering down in private fortified castles for fear of stepping out in public.
>The point is a rising standard of life.
You or the farmer you buy food from competes for farmland with Bil Gates. You or the one providing your house builder with wood competes for lumber forest with Alex Karp.
The list goes on and on.
It appears trough technological innovation the standards of life rise in many ways but trough innequality it can affect the standards/ affordability of our basic needs.
If Bill Gates offers megamoney for farmland, and Alex Karp offers megamoney for lumber, then it encourages the creation of more farmland and lumber.
Bill Gates buys huge amounts of land precisely for ecology: Beef meat causes global warming in a disproportionate way compared to chicken or even disproportionate per euros or per gram of protein compared to lentils. All ecologists agree that beef/red meat should disappear from our plates if we want to overcrowd the Earth with more equal people, and along with erradicating a hugely deathly disease that is malaria during his lifetime, Bill Gates will also have accomplished that dream too.
I find a lot of consistency of his audience in hating him for the very reason that he implements his audience's wishes. To this audience, there is no redeeming oneself.
>I don’t even understand why anyone cares about equality.
Because most people are (IMO wrongfully) jealous of the rich. They have a problem with the rich even if it's legitimately earned wealth.
This is about wealth inequality, i.e. how far the scale is leaning. This has, as the website explains, some funny effects: looking from the top, you are effectively starving the people that pay you and your descendands. That might work for a few years, but if everyone's hungry it's gonna be heads on pikes no matter how many bunkers you build and how much you pay for personal protection.
People care about equality because the absence of it is inequality, and that leads to political control. Even if you live a good life today, it is not guaranteed. Democracy, human rights, all can be eroded if everyone ignores politics and the economy.
You’re probably not one paycheck away from homelessness, and probably have the protection of the legal system provided you don’t upset the wrong people.
But you’re probably one health scare away from it, you just don’t realize it.
Do you care about concentration of power in a single person or single family? What happens when you have conflict with someone who has orders of magnitude more purchasing power than you? Do you think it's good or bad for the social order or democracy if one individual is able to exert more power than an entire city or state just based on inherited wealth?
Three good reasons to care about inequality itself:
1. Outsized political influence (in theory can be mitigated by laws controlling corporate spending, but obviously those laws themselves are subject to manipulation by the rich and powerful)
2. Distortion in who the economy serves. The beauty of capitalism is that it's a problem-detection and problem-solving system. If a narrow set of people have a huge portion of money, the economy becomes unduly optimized toward satisfying their wants and needs.
3. Despite best efforts, we ultimately must share a lot of the same commons. Even being a billionaire in NYC or San Francisco can't really give you a walk to work or your child's school that feels as safe as it does in a more equal society that takes better care of its unwell and poor.
Yeah. Wealth Inequality is a trojan horse for socialism.
The point should be to raise the floor, not put in place a ceiling.
Nice way to put it.
Quality of life is going down my friend.
Retirement age keeps increasing, public healthcare keep getting defunded. My tax money is getting used to enrich war mongers and my cost of life keeps increasing as a result of all of that.
Also my constitutional rights are ignored daily.
You understand why I might not be feeling very happy that YOU are doing great?
A contrarian view:
- Most of that wealth is tied up in assets offering services for americans (servers / warehouses). It would be much worse if the rich decided to spend all of that on consumption rather than keep reinvesting it in assets. - Even the LHS of that chart Americans are some of the wealthiest in the world. A lot of the middle class from many other countries would love to be on the LHS of that chart. - No one is expected to build wealth on a 40 hour minimum wage job. It is the bare minimum and most people get paid more. - Americans don't want wealth. Our spending habits are abysmal. I suspect if you gave every American $500K the chart would revert back to this in like 12 months
The same wealth could be tied up in assets that are _owned_ by the americans and offer services to them.
Services that have an incentive to serve said americans, because it is them who own them.
You are completely right that this capital is super useful for society. It would just be infinitely more useful if it was in the hands of society.
Pretty jaw dropping. Most people here probably have around $5-10M in assets given we’re mostly in tech. It’s really eye opening to see that that $10M hardly cracks the top 98th percentile.
Though this is also a slightly misleading metric. Plenty of “poor” people are only temporarily poor. When I graduated grad school before starting at Google all those years ago, I had a negative net worth.
edit: sorry, bringing a SV perspective, realize my comment doesn’t apply to everyone
> Most people here probably have around $5-10M in assets given we’re mostly in tech
Nothing against you OP but this the perfect highlight how out of touch HN can be from the reality.
Yeah. In my circle, everyone using HN is worth at least $25-35M. Liquid.
Except for one guy, but he's 16 and will probably be the richest on paper once his AI agent startup's pre-Seed Series Z closes.
You guys must not have a lot of years of experience? My friends groups have a few hundred million dollars each (the junior developers are in the lower hundreds)
Stepping outside and travelling really gives you a perspective on how much of a bubble online forums are.
Even hearing from others on this forum helps! Sounds like most people haven’t been nearly as lucky-heavy fortunate as folks in irl circles. Very eye opening, and I appreciate everyone’s anecdotes.
I thought this was a setup to a joke when I read it.
> Most people here probably have around $5-10M in assets
There is no way this is true. FAANG pays well, but that is still an eye popping amount of wealth unless you're an executive or absolute top-echelon engineer.
Yeah talk about out of touch, does OP have that much? I’ve been in tech for 10 years, don’t have anywhere close to 5 million.
> I’ve been in tech for 10 years, don’t have anywhere close to 5 million.
You're doing it wrong!
You're out of touch if you think that's any sort of realistic answer.
I guess it depends on how old you are.
> Most people here probably have around $5-10M in assets given we’re mostly in tech
Even in a SV world I'm trying to get my head around the logical leap that gets you to this number. Median comp in SV is <500k - that's 20 years in the business to earn $10m ignoring taxes & your actual living expenditure. Obviously we can jump that with equity, but that's still not moving the dial far enough for the "majority" to be up at those heights.
I don't see how we're getting anywhere near these figures without generational wealth (assume this is the answer).
If you're earning 400k, saving 100k, and getting a 10% ROI, 20 years brings you to 6.3m.
Compounding returns are how.
That's ignoring taxes, too. Real take home for a single filer earning 500k in SF is ~$282k. Take out another $48k for median-ish SF rent ($4k*12) and that "$500k" is already south of 250 before most of your bills are accounted for.
> Most people here probably have around $5-10M in assets given we’re mostly in tech.
Maybe if you are in SV. I know this post is about the US but tech in EU definitely doesn’t put you in the 10m€ bracket
Nowhere BUT the US puts you in that bracket.
Yes, salaries in the EU are generally pretty bad, and then you have high taxes on top. That's a good reason for why I left the place.
(Though to Singapore, not to the US. Salaries are higher than in the EU (though less than in SV), taxes are a lot lower than in either. Quality of life is higher than in the US for me.)
Even in the USA you're not getting to $5m net worth on salary alone, not without decades of it.
(Or as more likely, you've been in SV since Apple was a twinkle in the garage and your house is worth north of $5m.)
For comparison purposes, $5m invested well should be about $150k a year forever (3% safe withdrawal rate). If you have a net worth of $5m you should be able to live without working - if you want to (median US household income is $87k).
Anyway, off to buy some $10 bananas.
> For comparison purposes, $5m invested well should be about $150k a year forever (3% safe withdrawal rate). If you have a net worth of $5m you should be able to live without working - if you want to (median US household income is $87k).
This is all getting more annoying with capital gains taxes (and inflation, since capital gains taxes are usually levied on nominal gains).
I moved to a place with simpler taxes, including no capital gains taxes.
> If you have a net worth of $5m you should be able to live without working - if you want to (median US household income is $87k).
Depends on how much you want to live off.
> Even in the USA you're not getting to $5m net worth on salary alone, not without decades of it.
I don't think the original commenter was talking about juniors who just started?
Although looking at Levels.fyi, salaries in London are significantly more than Singapore, and that's with the CoL apparently being higher in Singapore.
I think your comment strikes at an issue that everyone feels but is hard to articulate - there's true poverty (Appalachia, say) and then there's "working-class poor" which you can try to define but nearly everyone puts themselves into it. Perhaps a better term is "paycheck to paycheck" - by almost any measure, anyone gainfully employed in the USA is rich beyond the world's wildest dreams - but telling a family making $40k a year that they make more than 90% of the world doesn't help.
"by almost any measure, anyone gainfully employed in the USA is rich beyond the world's wildest dreams"
I'm not sure your mental model holds. A lot of Europe has higher standards of living than the USA. And a lot of Asian countries have made huge strides in the last few decades. Also consider the difference between Mississippi and Massachusetts. I wouldn't say that anyone gainfully employed in Mississippi is "rich beyond the world's wildest dreams".
> Most people here probably have around $5-10M in assets given we’re mostly in tech
Some European making 3k/month net probably wept reading this.
"before i joined FAANG i was poor"
I dont think that's in the books for everyone
If someone works for 50 years, and earns 100'000$ per year, he will have 5 million dollars at the end.
If he manages to not spend anything, like on housing, or food.
This really only applies to certain class of SV people who've ridden the tech wave by arriving at the correct time.
An awful take from someone who clearly hasn’t studied California itself.
Around 17% of CA residents live below the poverty line, which means MILLIONS of adults that are not students. Elderly are a significant chunk of that number.
https://www.ppic.org/publication/poverty-in-california/
https://calbudgetcenter.org/resources/young-californians-fac...
I'm not sure it applies to SV either. Like definitely some, but not even most.
I have a box full of cables, that's what I have.
Not sure about that "most people here". Maybe in SV? Not in Europe.
If I were to liquidate my whole existence, I'd probably end up at maybe 300k€? Maybe? And that is already rather high up here in Germany.
Alas, yes, salaries in Germany are pretty bad.
It does - in truly german fashion - make one wonder how efficient that SV machine is.
The ratio of getting shit done per dollar seems a bit low. Even with Germany continuing to be.. uh.. not exactly on top of its game.
I’m in NYC and I don’t make that kind of money.
> Most people here probably have around $5-10M
I expect most people here to certainly be nowhere near that.
> Most people here probably have around $5-10M in assets given we’re mostly in tech.
You would be surprised. Not only because, as you point out, recent graduates often have a negative net worth, but also because people tend to increase their spending in lockstep with their income.
Saving millions takes the intersection of multiple factors: sufficient disposable income, prioritizing investing over lifestyle, long-term discipline to stick to the plan, and luck to keep it all going smoothly.
>Most people here probably have around $5-10M in assets given we’re mostly in tech.
In yen perhaps.
If not yen I for sure have that in Iranian currency I guess
Certain people think wealth inequality is bad. Maybe that is the wrong way to look at it. Just look at all that opportunity.
Opportunity doesn't pay my bills.