[extropy-chat] Why I am No Longer a Libertarian Either...

[J. Andrew Rogers]

On 7/28/05 11:10 AM, "Robert Lindauer" <robgobblin at aol.com> wrote:
> What I want to know was how it was defined for the sake of the study
> referenced.  This is a fair question.  Different studies make different
> definitions and paying attention to them is important when drawing
> conclusions.


The definitions are pretty straightforward if you bothered to put even the
slightest effort in learning about this.  Around 3.5% of households in the
US are millionaire households, and only around an average of 10% of the
total wealth of those households is in their house -- these are not real
estate bubble millionaires.  Most own their own small businesses.

According to the most commonly cited sources, 80% of millionaires are "first
generation", meaning that they do not come from wealthy families.  Another
10% or so have wealth in the family, but never received any financial
support from the family and bootstrapped their own wealth.  The remaining
10% became millionaires via windfalls from various sources, including
inheritance.

I come from a family with many millionaires in it, but a long tradition of
no financial support whatsoever for the children and modest lifestyles.  No
allowances (you have to work for your money), and when you graduate from
high school you have to make your own way in the world, including paying for
your own college (while being disqualified from financial aid by this fact).
Nonetheless, it has produced generation upon generation of wealthy
individuals, including individuals who ended up in the rarified air of
ultra-wealthy with nothing more than a high school diplomas and day labor
jobs.  In case you are wondering where all that money goes when people die,
the estate invariably gets donated to charitable organizations.

When I look at my extended family and the consistent wealth it has produced
from generation to generation, the pattern is obvious: they work very hard,
they are pretty bright, and children are never coddled or spoiled.  Being
financially self-made is a badge of honor, and expected.



> The myth I'm trying to bust here is the "if you work hard, have
> discipline and drive, you will probably be born in the projects and make
> a million dollars", when in fact the odds are so far against this that
> it's absurd.


Being smart helps too, but is only moderately important.  The problem is
ultimately that very few people work hard or have drive and discipline.  The
vast majority of people are comfortable and do not feel the need to work
hard or have discipline.

You are not busting any myths, you are pointing out the problem.


> I've recently been told that 98% of millionaires were born
> millionaires in the US, from "Lies my teacher told me:  Everything your
> high school history book got wrong."


Obviously a load of crap, since such a "fact" would have a number of
interesting consequences that are not in evidence.


> I await the source of the 60% of millionaires are self-made as well as a
> definition of "self-made" for the sake of the study.


90%, not 60%.  


J. Andrew Rogers