Being rich allows you a good few more rolls of the dice. If I was to quit my job and fail at a startup, that would be me back to stage 0. I would need to work my way up the ladder slowly. If my parents were rich, they could just give me another 100,000 to try out my next business.
The privilege of having a well-to-do family gives you the ability to take more risks, knowing that if they fail you have a cushion to fall on.
I worked with someone who failed businesses over and over, each time going back to live off his family's wealth for a bit until trying the next businesses, until finally one of them hit and made tons of money. If you ask him, he'll tell you he didn't inherit a cent, and was a self-made millionaire. Technically accurate, but doesn't tell the full story.
One big reason people get rich is because their parents were rich. Rich parents pay for a better education for their children. This gives them access to the best jobs, and most valuable of all a network of people to give them a leg up. This also gives them better access to capital. It is also much easier to try your business idea if failure means moving back into Daddies pool-house, rather than complete ruin. I have worked with a lot of 'entreprenuers' and they are overwhelmingly from rich backgrounds. 'Started it with a small loan from my father of 1m' is a quote I heard more than once.
Another reason is luck. My father worked from nothing to owning a house in a nice place because he had a skill that was in demand. He nearly lost it all and is now scraping a living in his 70's, because technology made his skill less valuable. 10 more years of luck he would have retired at 50 and I would have had the advantages...
Someone, mentioned that rich people were better looking. Perhaps they are just healthier, better dressed, and better groomed?
This assumes one can afford multiple failures. Being born rich buys you a lot of swings of the bat. Otherwise you can't swing big, and opportunities to connect will be fewer--if any.
Rich kids can afford 'responsibility' because they have money to pay for their mistakes. Poor kids don't.
Best way to be prepared for success? Be born to a rich and well connected family.
It's no surprise that the largest predictor of wealth is... wealth. Lots of founders might not be directly funded by family wealth, but the various safety nets and conveniences (even op said they sold 2 of their cars) are a major factor, if not the largest factor, of success.
It's an ugly truth of life that I've come to accept: the rich stay rich and the poor stay poor.
Easily. If someone comes from a rich family it's in a way harder for him to build a startup: he will not belong to the demographic of 90%+ potential users of any startup, and it will be hard for him to understand what they want and how to pitch it to them, same thing about employees - it will be hard to lead and motivate people not understanding what the people who need to work to pay their bills feel. This is my personal experience, while i am not rich in the 'first world' sense, when i lived in a small provincial town in Russia 9 years ago i was rich in a relative sense - if you define rich as '1%'. My attempt to build a catering business failed miserably because of these items. Programming - where my clients are of same demographic as myself - works way better.
As a startup founder with wealthy parents, this seems likely. Not only can parental wealth serve as a safety net, but you might also get direct investment from your family, have a safety net if things don’t work out (enabling you to take more risks), not have to exert as much effort taking care of sick, old, etc. family members because you can hire people, get access to powerful family connections, and learn from highly educated parents.
What’s weird to me is that I don’t see more successful founders mentioning that having economically well-off parents being a factor in their success. I’ve long since accepted that any success I’ve had or will have will be, at least partially, a result of my privileged upbringing. I used to be a bit bothered by that, but now I’m happy to give tons of credit for any of my own successes to my parents. And anytime I hear about startup founders achieving success despite coming from poorer families or even hostile environments, I’m super impressed.
Maybe there are other factors besides just money. Like the fact that wealthy parents can afford invest more time into their kids, they have less financial stress so can focus more on parenting.
Also having a successful person literally raise you from birth would probably contain a lot of lessons about sucess
I think assertions like this miss alot because they automatically assume the wealthy parents helped them financially. It seems to feel of sort of idolizing of money, thinking money can solve most problems and achieve a great many things. I think that's a popular but flawed belief.
As someone who started a moderately successful business in the past, I don't think just having money to pour into a startup is as important or as deciding a factor as people think
While that's true, people who do end up being millionaires or even billionaires almost never come from any other background. Rich parents seem to be a prerequisite for starting successful businesses - and in several of these cases, having the extra spare funds to turn an initally stagnant business into a success.
I'm a bit biased towards those with wealthy parents perhaps. My point, which I may have failed to make, is that business success requires personal success, and if you haven't experienced that on your own (where true failure is a very real possibility), then I doubt you're ready. That growth can come in a variety of ways: college success, raising a child as a single parent, or even dropping out of high school to work and make ends meet. That growth can occur in the presence of wealth, but I think it can be tough, and proceeding through the rigors of college may be the easiest path (but not only path, and no guarantee of growth even then)
I know several very successful entrepreneurs and I know quite a few people with rich parents. I don't see much of a correlation.
In my perception many of the rich kids lack the drive to work as hard as you need to, to become a successful entrepreneur, instead opting for a safer route. Granted, if you are from a really poor background and live in the US without much of a social safety net, I could see how that could hamper your prospects, but that's hardly a problem where I'm from.
I know lots of people in this situation, including more than a few with "10 figure" parents, and the happiest ones are those who choose to ignore the money and live a normal life. They might live in nicer apartments, but for the most part they get the same jobs as their peers and go down the same career path. If they didn't do that I imagine it could become quite isolating.
If that doesn't interest you, you could start a company or go to school. You don't have the same pressure to make money that many recent grads do, because you have a big safety net if you fail. So the risk/reward ratio is higher for you in startup land.
I don't see why rich parents should change your behavior. Don't you want to be successful on your own? Or do you just want to wait for an inheritance (read: wait for both of your parents to die)?
What would your parents think if they read this post?
I don't have rich parents and I'm not a successful startup founder. I guess this confirms it!
Joking aside, I don't think it's just about the money or the safety net -- most parents can afford to support their kids for a few years after college. I think the biggest advantage is an understanding for entrepreneurial spirit.
When I started my business (not a startup), my biggest problem was having no role model and having no-one I could have asked for advise. I quickly made more money than my parents, but I still had no idea how expensive everything else would be. When I talked to anyone I knew about my expenses, they were all freaking out how much money I was paying my employees. I was extremely reluctant to pay an accountant (why throw away 1000€ a year when I can do it myself!), or even to hire someone to clean the office. The frugality I learned from my parents is not something that's useful when running a business.
If your parents are "rich", chances are they are entrepreneurs of some kind themselves, and they can mentor you, which is a huge advantage.
My parents had a startup when I was a child. My mom was adventurous and worked with my dad in the business. As a little kid, I had no awareness that we were rich or poor, though we must have struggled because I remember different living situations were not as nice as others. Our family life was happiest during the building phase of the company - before success was surely won.
One thing I'm sure of is that my dad would have been miserable if he had a straight job and that would have affected our family a lot more than material instability.
There are many lessons that you can teach a child about resilience - about fortune's ups and downs and how to handle risk that are unavailable to those who put their lives on hold to rear a child. I wouldn't have had any other childhood. We had extreme fortune upheavals. At one point, the family lost everything. But dad started again and made a success. I still wound up attending an Ivy League school and hope to apply the lessons I've learned growing up to the startups I'll start.
While I agree to some extent with the point your trying to make, the way you phrase and portray this sounds like more of an excuse than a strong argument.
>Because they have family obligations that take priority
This is on you. If your serious about it you should see this coming. Elons familial situation isn't exactly all flowers and roses. A lot of my friends who managed to start successful business started yong precisely because they saw this coming and new it would be difficult to do with a family. I would argue the exception is if you have parents who are sick or need heavy financial support or whatever. If this is the case, would be a fair argument in favor of being rich (or at least middle class) helps you get rich.
>Because they live outside high-income countries
I would argue this goes both ways. If anything a lot of countries are trying to pile into developing countries now cause that's where the growth is. Similarly I used to work in hk where living costs are absurd. Then I was relocated to China and after a while I quite my job to try my own thing because it was affordable to take the risk. You could live decently by being frugal with some savings and the benefit is still vastly in favor of being an owner than an employee. Access to education might be a differentiator but so many things are available for free online now.
>Because they have no access to support network, so when they fail, they fall all the way to bottom
I think this is related to two somewhat. It's also totally feasible to position yourself so that even if you fail you can still land on your feet, you just have to be conscious of it.
>Because they may have made a crippling mistake in their pasts that now prevents them from reaching their full potential
Again this is the same for everyone and is on you personally. Don't do anything stupid.
But like I said, I generally agree that being rich or middle class definitely helps you become rich, but if you can go on and on about all these reasons your probably want to adjust your mindset as well
We have a silicon valley success story in our family. His parents were telling me how he built everything up out of nothing, clearly unaware of their own contribution.
He could pour all his money into his start-up because if he'd lost every dime he could have moved back in with them. He'd have his own bedroom, bathroom, and a fresh-cooked meal every night. He could have stayed with them as long has he wanted. Very few people have that kind of soft-landing.
Why would your parents be wealthier than you'll ever be (unless of course they're extremely wealthy)? That seems like a very pessimistic attitude to have towards money and income.
I grew up in a lower middle class family and I'm wealthier than my parents ever were, just because I worked hard and improved myself, and went into technology where I could make an upper middle class salary.
Why would you want to resign yourself to being poor your whole life?
The cost of failure is way too high in this country for people to take a risk and venture out on their own. This is a privilege that has been reserved for the wealthy.
Larry. Sergey. Mark Z. Steve.
All of these people were born into families where both parents either had advanced degrees or were well off due to their success in the field. Failure for these people does not mean much. Maybe just a hit to their egos. But otherwise they keep living life, just not as the billionaires of today.
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