
How to get rich in America - known
http://www.economist.com/blogs/economist-explains/2017/02/economist-explains-0
======
adriand
Radiolab recently featured ([http://www.radiolab.org/story/radiolab-presents-
media-busted...](http://www.radiolab.org/story/radiolab-presents-media-busted-
americas-poverty-myths/)) some content from another podcast series called
"Busted: America’s Poverty Myths", that examines various myths about the poor
- and by extension, the rich - in the US. It was fascinating. One thing that
was discussed is the degree of upward economic mobility in the USA. IIRC, they
measure this by the likelihood that someone who is born into a family that is
in the bottom 20% of earners enters the top 20% of earners in their lifetime.

In other words, what is the statistical basis for the belief that in America,
anyone can go from "rags to riches"?

It turns out that in the US, the percentage of people who achieve this feat
is, on average, about 7%. In Canada, it's about 13.5%. Another myth busted.

Conclusion: if you want to get rich in the Americas - or at least, well-off in
the Americas - come immigrate to Canada. Especially if you're reading this
comment, since you likely have the kind of education and experience that makes
immigrating here a breeze. Sure, it's cold here in the winter, but you'll make
enough cash that you can spend a chunk of the winter in Mexico!

~~~
CSMastermind
I'm biased here. I grew up well within the bottom 20% if not the bottom 10% of
family incomes. I'm now personally in the top 5%. At no point in my life did
it feel like there was anything holding me back. In fact if anything it was
frustrating to watch as other people in my situation got handouts while I had
to work my way up. I think America is just fine (with maybe a little too much
affirmative action).

~~~
oblio
Well, it depends on your environment. What where your parents doing and what
was your personal "big break"?

~~~
kamaal
>>what was your personal "big break"?

This.

Many times.

Often people luck-out and think that the same would happen to everyone sooner
or later. Or worse they think it was their work all along and nothing else.

You can very easily deceive yourself into believing a certain set of things
when the times are going good. Unfortunately you might have to fail for
reasons beyond your control(for a lot of time, on a lot of things) to convince
you otherwise.

~~~
david38
None of the successful people I know had a single "big break". It took a
handful, but more importantly it took the willingness to take risk or do
without.

1\. Did you study in high school while everyone else was having fun? 2\. Break
- get into good school 3\. Did you graduate with a difficult degree? This is
pure tenacity. 4\. Did you do interesting projects on the side in college?
Tenacity. 5\. Said degree + projects lead to job. Sort of break. 6\. Moving
across the country for a better job - tenacity. 7\. Switching jobs many times
to move up - tenacity 8\. Promotion to management/lead/whatever. Tenacity +
break because you have a boss that likes you 9\. Large jump in salary by
jumping to a company on the way up - break. 10\. Several years with low
medical bills, no divorce, whatever so you can save $50k+ per year. Break with
slight tenacity for not splurging on stuff

------
Frogolocalypse
It's probably no surprise that the same people that think hard work is what
leads to success are the same people that don't understand what the wealth
distribution actually looks like in america.

[https://en.wikipedia.org/wiki/File:Wealth_Inequality_in_Amer...](https://en.wikipedia.org/wiki/File:Wealth_Inequality_in_America_by_politizane.webm)

~~~
yread
Well, the ideal would be very strange though. Top 20% owns only twice as much
as bottom 20%? That would mean that the upper class - doctors, lawyers would
earn only twice more than garbage men. That probably wasn't true even in
Soviet Union

EDIT: played with it a bit and produced this chart - Y axis has the base of
the exponential (top 20% earns n-times more than bottom 20%). It seems that
what US has is not exponential though - I can't get the bottom 40% to be as
small without the top 20% becoming too big. I think that means that it's
subexponential

[http://i.imgur.com/gHxBXwa.png](http://i.imgur.com/gHxBXwa.png)

EDIT 2: This is actually about wealth inequality rather than income
inequality. So it makes sense for that to be much larger. Here is the paper
it's based on

[http://www.nber.org/papers/w18559.pdf](http://www.nber.org/papers/w18559.pdf)

~~~
Asooka
And why the hell should I be making more than twice what a fulltime garbage
man does? He's objectively providing a more important service and delivering
more real physical value than I do.

~~~
foozed
Well said, I completely agree. Also his job is arguably "harder": has to get
up super early, physically exhausting, smells bad all the time, etc.

------
aabajian
>>"Between 1999 and 2004, just 2% of Princetonians came from the families in
the lowest 20% of earnings, while 3.2% came from families in the top 0.1%"

These kinds of statistics are appalling to me. I wonder if they continue along
the income percentiles (e.g. top 5% has a greater chance than lower 30%, or
so). My parents are as middle-class as it comes, one is a nurse and the other
is a probation officer. Their combined income is about $150,000. The top 0.1%
make > $1.5 _million_ per year. How can your parent's income have such a
dramatic effect on your access to college? Is it not enough applicants? Is it
lower performance on AP exams? Is it the inability to pay tuition?

I may be a bit bitter as I'm set to graduate med school with $250,000 in debt.
It's hard for me to fathom having parents who could pay my tuition four times
over every year.

~~~
lmm
If your family income is $150,000 that puts you well above the average -
you're probably in the top, what, 5%?

------
TeeWEE
Basically having Rich parents makes it easier to become rich. This is even
true in the Netherlands. I see children buying houses with parents money and
subrenting it to make a profit. I just cant do this, i don't have the capital

~~~
LeonM
I second this. Not having parents who spend their life accumulating wealth
(read: bought a house which increased an order of magnitude in value over the
last 20 years) makes it very hard to even afford a house for your own use, let
alone buying one to rent out. With the wealth gap growing ever larger, it
becomes increasingly hard to 'break out' of the (lower) middle class.

~~~
tiatia
With asses price inflation, depressed wages, insane taxes and and overaged
population it is very hard in the EU. Only few make it. By plain luck or maybe
by ability.

But you can leave. Best decision I ever made.

~~~
jononor
Where did you go?

~~~
tiatia
I was born in the EU, got my PhD in the US and finally hard to start as an
illegal immigrant in China and worked my way up. This being said, there are
opportunities everywhere.

China. Angola. Colombia. Even Ethiopia. There are opportunities out there for
the people who are willing to try or who are forced to try. Places, where
there is still some growth, some opportunity and the government does not
strangle you.

The best incentive may be if there is something that you like. Be it the
weather, culture, language, women. Something that touches you. I saw too many
people fail in China. This were the people who wanted to eat every day
McDonnalds or Subway instead of Chinese food and called the Chinese "savages".
Immerse yourself in that culture. Become that culture. Or how the Chinese say:
What you can't avoid, welcome!

------
f055
One thing often omitted, or taken for granted, in the "rich parents"
discussion is the curious question of "How did the parents get rich?" Did they
have rich parents too? Or did they actually started from very low and got
clever/lucky/hardworking. If you think of it this way, having rich parents may
not be a magic privilege, a "silver spoon", but a consequence of their effort
and sacrifice. Their children do not have to bear the same sacrifice. But you,
whose parents weren't that clever/lucky/hardworking, you need to bear the
sacrifice - maybe even not to get rich, but give enough of a good start for
your children to get rich, and you grandchildren to be called privileged.

~~~
washadjeffmad
Sacrifice implies you lose something with nothing gained. These people
generated wealth and got posterity and legacy. They bought that with their
work, volitionally, and bore the responsibility of the dedication required to
keep it.

You aren't sacrificing your money to buy yourself lunch, providing for your
kids isn't a sacrifice, and you aren't sacrificing by working more hours to
afford that big house and nice car you have.

It's just hard sometimes, but it's all part of the bargain.

~~~
restalis
_" Sacrifice implies you lose something with nothing gained."_

Not true. That is just pure loss. According to its definition¹, "sacrifice"
means either "to surrender or give up, or permit injury or disadvantage to,
for the sake of something else" or "to dispose of (goods, property, etc.)
regardless of profit". Parents working hard in order to provide for their kids
may involve something from both of the meanings.

 _" you aren't sacrificing by working more hours to afford that big house and
nice car you have"_

It depends on how you look at it, and working more hours for a nice house and
car can be both a transaction and a sacrifice. If you consider the leisure
time you have to give up (assuming that you don't particularly enjoy your
work) then it's a sacrifice. If you consider the time and energy involved in
the paid work then it's just a transaction.

¹
[http://www.dictionary.com/browse/sacrifice](http://www.dictionary.com/browse/sacrifice)

------
minikites
> That suggests that the simplest way to become extremely rich is by being
> born to the right parents. The second-easiest way is to find a rich spouse.

Articles showing just how unattainable wealth is in the USA always remind me
of this quote which seems to be the most concise summary of why many poor and
middle class people vote against their own economic interests:

> Socialism never took root in America because the poor see themselves not as
> an exploited proletariat but as temporarily embarrassed millionaires.

~~~
ryandrake
It's an old article but at the time 39% of Americans thought they either were
or one day will be among the top 1% [1].

1: [http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-
hop...](http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hope-over-
self-interest.html)

------
saycheese
Once was speaker before a few hundred recent grads and asked if they wanted to
be a billionaire. Only a few raised there hands.

My theory is most people want more stuff, few really want to be billionaires,
or even just part of the 1%.

~~~
Tepix
Being a billionaire usually means that you will fear kidnappings and other
crime against your family for the rest of your rich life. Earning more than
200k per year will not make you any happier (see
[http://www.cnbc.com/2015/12/14/money-can-buy-happiness-
but-o...](http://www.cnbc.com/2015/12/14/money-can-buy-happiness-but-only-to-
a-point.html) ).

~~~
Lordarminius
I'm curious. Is kidnapping a real fear for rich people in the West?

------
HugoDaniel
By America they mean the country "USA". Not Brazil or Mexico or any other part
of America. Given the salary inequality between the USA and most of the other
countries in America it is easy to automatically imply that you only need to
be in the USA to get rich in America.

~~~
vthallam
I know America is a continent and all that, but more often than not people
refer America to USA.

~~~
GFischer
Only in the U.S./English.

If you refer to "America" in Spanish it's assumed you're referring to the
continent, the state is commonly referred to as the United States or the
United States of America.

We actually call ourselves Americans here in Uruguay.

[https://es.wikipedia.org/wiki/Uso_de_la_palabra_americano](https://es.wikipedia.org/wiki/Uso_de_la_palabra_americano)

 _" En el uso tradicional a los naturales de América como continente.

En un segundo término, a los ciudadanos de Estados Unidos de América, uso
derivado de la influencia lingüística inglesa."_

~~~
aninhumer
And if you refer to "Spain" in Spanish, people will be similarly confused. But
we're not speaking Spanish.

------
princetontiger
This article is about employers hiring Ivy League graduates. Why is this news?
The phenomenon is just as acute in SV as it is on Wall Street.

The Tier 1 schools in the US are the Ivy League, MIT, and Stanford.

Getting into these great schools starts by being incredibly precious in
elementary school and middle school, and really accelerating the positive
energy and focus in high school.

------
scep43198u
But this just assumes that everyone is striving to get into 0.1% equally,
where it might make more sense assuming that someone who goes to Wall Street
wants to get rich more than a nurse.

It's like saying it's a lot "easier" being in top physical shape if you
exercise at top sport facilities in the country, and/or already come from a
family of athletes.

Both of which are already signals you might be trying very hard in the first
place.

Coming from rich families might also mean being rich and making money is more
socially valued. And rich families don't posses only money and connections
which makes it easier, they probably also have good knowledge of how to make
money and where money can be made compared to working class families.

So before jumping to any conclusions on how easy it is and why it is easier
exactly, stuff like that needs to be thought through a bit.

------
sagivo
TL;DR - have a rich family or marry a rich person. if neither work - go to
harvard and hope

------
kamaal
Came to work in the US. Have moved back to my home country. But would love to
come to US again(A great country, no doubt). A few things that I have noticed.

1\. It can be really quite hard to get rich(like crazy rich) as a programmer
unless you have a very generous stock grant package. When I mean generous, I
mean like really in the upper order of 6 figures. Given tax is going to eat a
good bunch of it.

2\. Taxes will eat a lot of your salary and bonus. So any dream of making it
big out of saving up monthly salary is absurd to a large extent.

3\. What makes 2. even more so true is at some point in time you have to buy a
home, and take some responsibilities with regards to kids and family. Your
savings cache will only decrease.

If you are in the Bay area, rents will eat your ice cream. Buying a home is in
the order of >=$1 million. Kids can be expensive if you want them to have a
good future. If you want to buy a home, you will lose half your life to
monthly payments. Plus comes the regular fear of defaulting on payments in
phases of financial crises and job losses. And also be prepared for routine
house maintenance expenses and property taxes.

Overall life is hard for immigrants.

But I can imagine it would be the same for US citizens who come from poverty.
Education would come at a thick debt on top of which you have to build the
above points I mentioned.

Life if pretty much paycheck to the next. Paying monthly installment for car,
bills, mortgage etc.

Somethings that I like about the US:- Social security, infrastructure, uniform
quality of education, merit and overall values on which the country is built.
Overall there is better appreciation for merit and quality than most
countries.

If you are in the US you have already made it big by many a definition. You
just have to go farther.

~~~
klibertp
> Somethings that I like about the US:- Social security,

?!? That's literally against _everything_ I ever read about USA (living in EU,
never been to USA).

~~~
kamaal
Depends on where you come from. I come from India, here we have 0 social
security.

Any upgrade from 0 is good.

~~~
klibertp
Ah, that makes a lot of sense.

The world is so large, it's so easy to forget this when living inside one
bubble or another. Thanks for pointing that out for me :)

------
saycheese
Here's a quick lookup for US annual household income ranks/percentile based on
US Census Bureau data:

[http://money.cnn.com/calculator/pf/income-
rank/](http://money.cnn.com/calculator/pf/income-rank/)

As of 2014, to be in the top 1% of income earners by household, you needed to
make roughly $420,000 a year.

------
myf01d
It should have been "how to get rich". However, at least in America nepotism
plays a lower role in many professions compared to many other countries
because competition is much rougher.

------
akhilcacharya
So what do we do if we don't go to Princeton? Or even UIUC?

------
dgrealy
Is entrepreneurism dead, or something? On HN of all places it isn't even
mentioned in the comments?

I think so many of the entrepreneurial doers left HN or stopped participating
in discussions long ago.

~~~
akhilcacharya
Getting "rich" from entrepreneurship isn't very practical in most cases IMO.

From Dan Luu - [http://danluu.com/startup-
tradeoffs/](http://danluu.com/startup-tradeoffs/)

~~~
dgrealy
... that is a link about equity tradeoffs _as an employee_. You've
demonstrated not even knowing the definition of the word!

Incredible really.

~~~
akhilcacharya
In terms of risk founders take on more than startup employees take on more
than bigcorp employees too. The tradeoffs for the founders are even worse.

[http://startupclass.samaltman.com/courses/lec01/#annotations...](http://startupclass.samaltman.com/courses/lec01/#annotations:4119881)

~~~
dgrealy
Entrepreneurism is still very much alive. Down but not out. However for this
board, talk of it is decimated. To the point where the only mention of it is
in this thread, where I am speaking to one person, who needed to be reminded
what it even means.

------
homakov
Blah blah college. Degree has nothing to do with getting rich

~~~
pg314
From the article: _Few engineers, nurses or pharmacists make it to the top 1%,
which is dominated by bankers and other financiers._

Do you think the statement in the article is wrong? Based on what?

Do you think a college degree is irrelevant to become a banker or other
financier?

~~~
homakov
Get rich != become a banker. The article would be accurate if it said "how to
become a banker"

~~~
pg314
> Get rich != become a banker.

The article doesn't say that. The passage I quoted doesn't say that either.

------
dibstern
As though a huge number of poor immigrants haven't come to the US and
succeeded massively, after coming from nothing?

Is this person serious?

~~~
otalp
A huge number certainly haven't succeeded massively. A few have. Also a lot of
legal migrants already come from (relatively) rich families since US migration
can be expensive and favours the educated.

