> USA is a place where you can go from $100k to $100m vesting if you are lucky. That very few do achieve this isn't the point: you cannot do it, in almost any other economy.
That's a kind of lottery-mentality that Europe doesn't want to attract anyway.
That’s not lottery mentality and thinking that it’s equivalent is why Europe isn’t innovating.
If someone wins the lottery and gets rich, society isn’t better off. If someone starts a new company that made a cure for some disease and gets rich, society is much better off.
You absolutely want to attract people that want to make huge breakthroughs with unlikely odds of success.
Once you get past a few million, you quickly get into "can't possibly spend this money in several lifetimes" territory. And wealth divides like that come at the cost of massive societal wealth divides.
The US sustains that high number of people who strike $100 million+ through having a social safety net that barely exists, which results in far more people being seen as completely disposable. It also comes at the cost of worsening public education, worsening public health, crime rates beyond most first world countries, companies that constantly invent new evils like making all formerly paid-and-done services into monthly subscriptions. Few if any that hit 100 million are doing it ethically. They're doing it by milking the residents dry.
Some countries have national pride and resent the idea of stepping on their fellow countrymen. Some would kill half of them if they were promised a few % off their yearly taxes.
>> Once you get past a few million, you quickly get into "can't possibly spend this money in several lifetimes" territory. And wealth divides like that come at the cost of massive societal wealth divides.
> It takes many billions to buy a Twitter, even when Saudi Arabia is footing most of the bill.
There's some nice article out there that clearly explains how money "changes" at different income levels. First it's security, then it's comfort, then it's power.
> Once you get past a few million, you quickly get into "can't possibly spend this money in several lifetimes" territory.
This is incorrect and you’re really out of touch for suggesting it.
Let’s say you have a 5 million dollar exit in the Bay Area. After tax you get roughly 2.5. That’s enough to buy a nice but modest house and now you have no money left. You now have to work a full time job to pay the property taxes, the rest of your living expenses, and try to save for retirement. Same thing applies in LA, NYC, SEA, etc.
> The US sustains that high number of people who strike $100 million+ through having a social safety net that barely exists
This is false. The US spends more on healthcare than any other nation, it just goes to a bloated system. More tax money from the 0.1% won’t change that.
> crime rates beyond most first world countries
Gonna need a citation there. This is likely a result of guns being legal if you’re talking about gun deaths or a result of the war on drugs if you’re talking about incarceration. Neither of those have anything to do with taxes.
> companies that constantly invent new evils like making all formerly paid-and-done services into monthly subscriptions
We’re talking about biotech exits. Drop your “muh capitalism bad” gish gallop.
> Few if any that hit 100 million are doing it ethically. They're doing it by milking the residents dry.
Pure cope. A broad unsubstantiated statement about ethics followed by talk of milking residents dry when those residents have more disposable income per capita than nearly anywhere else in the world.
> Some countries have national pride and resent the idea of stepping on their fellow countrymen.
If they do this by treating huge breakthroughs like you are doing, they are stepping on all of their fellow countrymen through oppressive tall poppy syndrome. Knocking anyone doing well down is not how you lift everyone up.
> Let’s say you have a 5 million dollar exit in the Bay Area. After tax you get roughly 2.5. That’s enough to buy a nice but modest house and now you have no money left. You now have to work a full time job to pay the property taxes, the rest of your living expenses, and try to save for retirement. Same thing applies in LA, NYC, SEA, etc.
So what you are saying is that ONLY if you work your brains out AND win the "lottery", then you can have a decent retirement in the US?
Maybe Europeans are just too smart to accept that kind of proposition.
The "American dream" is a lottery system used to lure people into doing hard work and consequently rewarding only a few.
> You absolutely want to attract people that want to make huge breakthroughs with unlikely odds of success.
It's fine to want that and to attract those kind of people. What you don't want is to attract people who want to do that in order to make a lot of money.
I used to think that too, but realized it’s very naive later in life. At some point people are good at what they do, but get tired, start a family, want to settle down. Money helps quite a bit to have those folks motivated.
If you want innovators, motivate them with rewards. Money is a great reward since you can turn it into mostly anything you’d like. Want to buy a mansion? Fine. Want to travel around the world? Feel free. Want to give it away to charity? Great!
Maybe I should have been more explicit. There's a difference between "money" and "a lot of money". People are in this thread talking about the likelihood of getting $100 million. If someone does a thing because they want to start a family and settle down, great. You don't need $100 million to do that. You don't even need $10 million. What I'm saying is you don't want to attract people who are aiming at making vastly more than what is needed to handle the "settle down and live a comfortable life" situation that you described. But right now our society does incentivize and glamorize that, and I think we're worse off for it.
If the goal is financial security to the extent that you could not work (if you still need to work you're not really secure since you could lose that job) then I think you actually would need about $10M. By the time you buy a house, pay for your kids school (elementary through college) and medical insurance for the rest of your life theres not a lot of change left. That to me has always been the goal, I've never truly felt financially secure my entire life and even on a good tech salary I still dont cause I'm one layoff in a bad market away from being in a pretty dire situation, with a family to support too.
> I've never truly felt financially secure my entire life and even on a good tech salary I still dont cause I'm one layoff in a bad market away from being in a pretty dire situation, with a family to support too.
That's a very good point: You really do need a lot of money in the US to feel reasonably secure for the long term. This might be good for employers, entrepreneurs, investors etc., but since most people in society aren't that, I'd argue that the average quality of life is worse for it.
> If the goal is financial security to the extent that you could not work
This actually seems like an anti-goal to me, societally. Why would we want to disincentivize the people that arguably have the best track record of contributing to progress from continuing to do so?
If you are trying to say that society forces us to feel insecure in order to drive us to never stop working then yeah I agree and it sucks - doubly so because it may even be true that if we all felt financially secure, society would grind to a halt.
There's certainly some truth in what you say. I see it as a societal problem that the only way to ensure you don't wind up with less than $X to live on per year is to amass some large multiple of $X. What would be better is a more robust social safety net program that ensure if that one layoff happens and you're out of work, your situation isn't that dire. Like maybe you tighten your belt a bit and maybe if you had stretched for a big house you have to move to a smaller one, but you don't wind up on the street. And in exchange for knowing that we will never wind up on the street, everyone accepts that no one will ever get to own a $100 million mansion or a superyacht or a company worth $100 billion. It seems like a fine trade to me.
$10M invested nets you (comfortably) $400K/year forever.
From that:
- 60k for capital gains tax
- 100k for (exorbitant) education for children
- 40k for healthcare (the most expensive plan on my expensive state's marketplace for a family of 4 is $36K).
That leaves $200k for living expenses. If you can't find a place to live comfortably (anywhere, since you aren't restricted by work) on $200k/year, we have very different expectations from life.
You absolutely need $10 million if you want to retire to any city in the US.
It’s absolutely mind blowing to me that people like you can sit there and go, “no, you shouldn’t be able to retire in NYC for saving a few hundred thousand lives because the thought of you getting $10 million is icky to me.”
You surely want to retire comfortably. You want to do what you want - and spend money along, not some arbitrary amounts but just without thinking too much.
$10M over 50 years - $200k/yr or $16k/mo
House in a rather expensive place - $5k/mo
Food, travel, other things and especially projects can eat the rest $11k/mo
The 50 years is wildly off. Even taking the average male/female lifespan most people don't enjoy more than 20 years of retirement. And sadly in my family I think the average is much closer to 10 years.
If you mean the lucky few of us who can "retire" at 30-40 and enjoy 50 years of retirement - that's such a statistical anomaly that it might as well not exist.
>>Food, travel, other things and especially projects can eat the rest $11k/mo
And also yeah, that is wildly wildly off. Again, if you want to have such an absolutely extravagant lifestyle to spend $11k a month on food and travel then sure - you probably do need $10M. But it's nonsense to say "you need $10M to retire in a big city". Clearly millions of people don't.
Well, for starters I don't think most people's retirement lasts 50 years. Even if you retire fairly early at, say, 50, that's taking you to 100 years old.
Also, your numbers assume you earn nothing in retirement, which is unnecessarily pessimistic.
Also, $11k a month for "food travel and other things" seems like quite a lot to me. I mean sure someone can spend $11k a month on "projects" but that doesn't mean that's something we as a society necessarily need to support.
50 at least is not "wildly" off. Somebody could retire at 50, at it would be strange to have money run out by 100 - what if the person would live longer?
We can have something earned from the money, but pension money have to be conservative, so the upside could be limited.
$11k a month for "food travel and other things" - healthy food isn't unfortunately cheap, neither is good travel - but those other things could be even more expensive. You might want to start an enterprise, and you'll need seed money. You might support a cause, or run a non-profit, or do other things which are noble but not easily rewarding in monetary sense.
Yes, we as a society probably can't - not don't need, but can't currently - support this. But it doesn't mean people shouldn't aim for this.
Frankly, I don't see strong evidence against so far.
>>50 at least is not "wildly" off. Somebody could retire at 50, at it would be strange to have money run out by 100
Who retires at 50? But even ignoring that, I had to check the numbers - in the UK at least, only 0.02% of people live to 100, the chances are "wildly" against all of us in that regard. Sure it might happen - I wouldn't plan for it.
>>$11k a month for "food travel and other things" - healthy food isn't unfortunately cheap, neither is good travel - but those other things could be even more expensive. You might want to start an enterprise, and you'll need seed money. You might support a cause, or run a non-profit, or do other things which are noble but not easily rewarding in monetary sense.
Your assertion was that you need 10M to retire in a big city, the need part is what I'm challenging. If you want to lead a rockefeller lifestyle in retirement - sure. But that won't apply to 99.9999% of population who just want to live out their life in peace and comfort. Let me put it this way - I don't know anyone who makes $11k/month in their regular working life, the idea that you'd have that during retirement is almost....absurd? Who outside of rich elites has "seed money" during retirement? I think we're thinking of completely different social groups.
So no, unless you're part of the 0.00001% you don't need 10M to retire in a big city.
You get both, Facebook’s job is to be known about, so you know about it. There’s a ton of companies doing drug research basically silently… in the US. Most fail, it doesn’t matter as long as a few succeed.
It's worth pointing out that the biggest innovations (both scientifically, but likely also monetary) in the biomedical field in the last years happened in Europe not the US. So that seems to disprove the point that innovation happens in the US because of the chance of going from 100k to 100M.
No I’m not. But it is what motivates people at a large scale.
There are very few open source contributors that are actually really good. The nature of software means that their labor of love can scale very well.
Additionally, there is nearly zero barrier to being an open source developer. Buy a laptop and start writing code.
So open source only works well because when you get lucky and get a combination of a motivated contributor and essentially zero distribution cost, a single group can ship to billions of people.
If we want someone making an artificial heart, it’s a completely different story. The research and development is very capital intensive so you need a war chest to even start tinkering. Then once you have something you want to try to get approved, you need either to be a medical doctor or employ one, which is a huge opportunity cost for a medical school debt ridden doctor.
All of the capital needed to fund this is high risk so it needs a high upside return if private investors are involved.
Now a founder could eschew all of their equity, but after going through all of the work to do this capital raising it would be quite unusual.
We can't ignore the influence of money even on open source, though. How many people are contributing in an anonymous manner, so they can't claim financial benefits from publicity and networking? How many open source projects are rejecting VC funding?
Why wouldn't you rather want to attract people with much higher odds of a reasonable quality of life regardless of whether they personally hit the jackpot?
In terms of expected value (which you'd hope that scientists and entrepreneurs understand at least at a surface level), that seems like the rational move.
No, it’s not better off. The lottery is paid for by poor idiots. All of the money going into those tickets would have been in circulation.
I also don’t think you understand wealth creation. A lottery is zero sum. A biotech company that makes $1 billion saving a couple hundred thousand people from early deaths allowing them to contribute to society is wealth generating.
$1bn / 200k people is $5k each. For a drug that probably costs $4. When you mark up the cost of saving a life by 1,200% I don't think you get to call that "wealth creation" or "saving lives" or even "preventing death". That's called "extortion."
I tend to agree, but having met some of the people who pursued this dream, they are very very inventive. They're smart. If that energy chasing a dream could be redirected, they'd be doing amazing things. Mostly, they wind up realizing that the goal is illusive, and re-pivot to a saner outcome but by that time they are fully vested in "america" as a plan.
The bounty here, is the people on the cusp of realizing its not going to pan out but who are both very smart, and smart enough to realize they need to pivot. It would be almost a given they are consciously walking away from IPO manna. I guess if you include it in the pre-sort on applicants, you get to winnow out the people still glued to money-is-the-prize.
BTW the EU would welcome more IPR inside the EU. Some amount of bonus may have to lie in the packaging, to get to where the EU wants to be on IPR. Novo Nordisk style.
> That's a kind of lottery-mentality that Europe doesn't want to attract anyway.
It’s not lottery mentality, it’s risk taking. And it’s something that the EU should be fostering. The US encourages risk taking where failing isn’t even seen as a bad thing.
That is the thing though: with the increased safety nets of the richer European countries, you would think that taking risks would both be more encouraged and naturally less dangerous than the US. And I am a big proponent of said safety nets. But we don't see this "moderate-risk-taking" mentality in the EU...
...or don't we? I am not sure. We are definitely not seeing the runaway successes of US big tech, but is it because people are not taking measured risks, or do operations fumble at a later point in their development? I don't know. What I do know is that revenue sources in the EU come with extremely onerous strings attached, are orders of magnitude below US levels, or are only available to big corporations of the old guard.
I'm not so sure there even is so much less risk-taking in Europe than in US.
There are many structural reasons why Europe doesn't produce gigagrowth oligopolies like the US. EU has a highly fractured internal market that is more difficult to dominate, EU is not bathing in reserve currency windfalls to be thrown all around and EU doesn't have as ruthless foreign/trading policies.
Also there's a difference how "risk taking" is portrayed in the public discourse. In US success of companies are seen more as result of risk-taking of individuals, whereas in Europe success its seen more as resulting from collective effort, and founders/CEOs of successful companies are not lauded as heros, or are even usually especially famous.
Risk-rewards calculus is simply worlds' apart for exploratory/long term R&D versus tech deployment, which is sadly what elon/faang/openAI/nVIDIA are only about.
(I imagine Musk
thinks he's bringing back a closed, for profit Bell System, though!)
I dunno, maybe Arc Institute/research hospitals poised to collect all the bionerds falling out of universities, these are the oligopolies that have any chance of morphing into semi-open Bell Labs-like setups.
Are there nothing of comparable scale in Europe?!? (Not many, I imagine, due to mostly what you already pointed out)
>That's a kind of lottery-mentality that Europe doesn't want to attract anyway.
the problem with the European thinking you describe is not lottery vs sure-thing, it's the idea that everybody within a geography should should think the same way and not all mentalities "belong".
Not at all. It’s that we experienced several times, first-hand, that some mentalities and mindsets systematically drive our societies to discord, war and death.
And to those mentalities… yes we ought to remind they’re not welcome.
>And to those mentalities… yes we ought to remind they’re not welcome.
gee, no matter how many times Europe has told the Jews that they are not welcome, they've kept coming back, bringing ses penchants for assessing capital risk in middleman trade, and hedging financial risks!
You're the one incorrectly using the concept of gambling replying talking to someone taking about risk versus reward (investing).
It is hard for somebody who believes in gambling to win at investing.
The US has both monetary and social incentives to create new businesses. I live in NZ where founders are discouraged by financial incentives and by social incentives.
> That's a kind of lottery-mentality that Europe doesn't want to attract anyway.
Except that it’s the opposite of a lottery.
It’s almost entirely based on your skills and the decisions you make.
There are right-place right-time effects, but it’s still your decision to be in the right place for the current time.
Europe’s economy is badly lagging the US economy, and it’s because culturally they hold these types of incorrect, fatalistic, zero-sum views towards success and innovation.
Four Pillars of Social Mobility: To rank each state, we measured a series of indicators related to social mobility across four pillars: Entrepreneurship and Growth, Institutions and the Rule of Law, Education and Skills Development, and Social Capital. Scores for each pillar were combined and weighted equally to create a state’s overall social mobility score.
I would think a measure of social mobility would include income percentile vs parents' income percentile.
Here, this one uses the simplest metric possible; a poor child is much more likely to remain poor in the US than in the other rich western countries looked at.
Wouldn't this be a much worse metric? It would have to net out to zero change on average by the definition of percentiles. If we take abs change to look at both downward and upward mobility, the measure wouldn't tell us where most downward mobility happened, up and down could all happen within the bottom 25% and none in the top 75% and this metric would say we are highly social mobile if there was a lot of movement there.
The US is full of billionaires who came from underprivileged positions.
Infact, your advice is worse than wrong, it is actively harmful, because you're discouraging people from trying by (falsely) telling them that their efforts don't matter and they were destined to fail from birth.
No, this is apparently information that clashes strongly with your prior beliefs. The US is packed solid with underprivileged adults who came from underprivileged positions, and highly privileged adults who came from highly privileged positions - regardless of whether it has a dozen counterexamples.
You don't even need to look for the count of billionaires. My grandparents were poor-as-dirt farmers. My dad's education stopped at high school. He even went to a one-room schoolhouse until he was 14.
My brother and I are both college educated and, while not "rich", have a lifestyle and income my grandparents could have only dreamed about.
It is truly painful to watch people preach learned helplessness through failure and destitution as the only possible outcome.
The relevant metric is not “did your grandparents farm” but “where in the socioeconomic continuum were your parents, and where are you”. In the US, these two answers are more likely to match than in other rich Western countries.
There are ~250 $1 million+ lottery winners in the US every year.
There are ~750 billionaires in total.
The average American has a better chance of becoming a billionaire through hard work and prudent investments if, at age 18, they decide to live in a cardboard box underneath a bridge and steal metals from construction sites to sell for cash to be used to purchase lottery tickets.
They can then win the multi-million-dollar prize and invest that wisely to reach billionaire status.
> Who are these billionaires from underprivileged backgrounds ?
Larry Ellison, Oprah, François Pinault, Howard Schultz, Jan Koum, Kenneth Langone, Ralph Lauren, Sheldon Adelson, JK Rowling, George Soros, John Paul DeJoria… to name just a few.
I took a name randomly from your list, Sheldon Adelson:
“He began his business career at the age of 12 when he borrowed $200 from his uncle (equivalent to $3,385 in 2023) and purchased a license to sell newspapers in Boston.[23] In 1948, at the age of 15, he borrowed $10,000 (equivalent to $126,814 in 2023) from his uncle to start a candy vending-machine business.[24]”
I am not disputing that it’s possible to go from rags to riches. But don’t you find it ironic that a list of people who supposedly fit the description, doesn’t actually fit the description?
The US has very low average/median social mobility (and it'll only get worse due to insane education policies and less standardized testing), but it has very high variance.
Going from $15k a year to $150k is a lot more common in Europe,, but doing from $150k to $150m is a lot more common in the US, and it's the latter that creates most of the value.
That's a kind of lottery-mentality that Europe doesn't want to attract anyway.