Paul Graham argues that the primary way people get rich now is by creating wealth, specifically through starting or joining early-stage startups. This contrasts with older models of wealth acquisition like inheritance or rent-seeking. Building a successful company, particularly in technology, allows founders and early employees to own equity that appreciates significantly as the company grows. This wealth creation is driven by building things people want, leveraging technology for scale, and operating within a relatively open market where new companies can compete with established ones. This model is distinct from merely getting a high-paying job, which provides a good income but rarely leads to substantial wealth creation in the same way equity ownership can.
The blog post "Money lessons without money: The financial literacy fallacy" argues that financial literacy education is largely ineffective because it fails to address the fundamental problem of insufficient income. Teaching budgeting and saving skills to people who barely have enough to cover basic needs is pointless. The post contends that focusing on systemic issues like wealth inequality and advocating for policies that increase wages and social safety nets would be far more impactful in improving people's financial well-being than traditional financial literacy programs. It uses the analogy of teaching dieting to starving people – the issue isn't lack of knowledge about nutrition, but lack of access to food.
HN users largely agreed with the article's premise that financial literacy education is ineffective without practical application and access to financial resources. Several commenters shared personal anecdotes reinforcing this point, describing how abstract financial concepts became meaningful only after encountering real-world financial situations. Some argued that focusing on systemic issues like predatory lending and wealth inequality would be more impactful than financial literacy programs. A few dissenting voices suggested that basic financial knowledge is still valuable, particularly for young people, and can help avoid costly mistakes. The discussion also touched on the importance of teaching critical thinking skills alongside financial concepts, enabling individuals to navigate complex financial products and marketing.
The blog post details the author's experience market making on Kalshi, a prediction market platform. They outline their automated strategy, which involves setting bid and ask prices around a predicted probability, adjusting spreads based on liquidity and event volatility. The author focuses on "Will the Fed cut interest rates before 2024?", highlighting the challenges of predicting this complex event and managing risk. Despite facing difficulties like thin markets and the need for continuous model refinement, they achieved a small profit, demonstrating the potential, albeit challenging, nature of algorithmic market making on these platforms. The post emphasizes the importance of careful risk management, constant monitoring, and adapting to market conditions.
HN commenters discuss the intricacies and challenges of market making on Kalshi, particularly regarding the platform's fee structure. Some highlight the difficulty of profiting given the 0.5% fee per trade and the need for substantial volume to overcome it. Others point out that Kalshi contracts are generally illiquid, making sustained profitability challenging even without fees. The discussion touches on the complexities of predicting probabilities and the potential for exploitation by insiders with privileged information. Some users express skepticism about the viability of retail market making on Kalshi, while others suggest potential strategies involving statistical arbitrage or focusing on less efficient, smaller markets. The conversation also briefly explores the regulatory landscape and Kalshi's unique position as a CFTC-regulated exchange.
Nvidia experienced the largest single-day market capitalization loss in US history, plummeting nearly $600 billion. This unprecedented drop followed the company's shocking earnings report revealing a 95% year-over-year profit decline, driven primarily by collapsing demand for its gaming GPUs and a slower-than-anticipated rollout of its AI data center products. Investors, who had previously propelled Nvidia to record highs, reacted strongly to the news, triggering a massive sell-off. The drastic downturn underscores the volatile nature of the tech market and the high expectations placed on companies at the forefront of rapidly evolving sectors like artificial intelligence.
Hacker News commenters generally agree that Nvidia's massive market cap drop, while substantial, isn't as catastrophic as the headline suggests. Several point out that the drop represents a percentage decrease, not a direct loss of real money, emphasizing that Nvidia's valuation remains high. Some suggest the drop is a correction after a period of overvaluation fueled by AI hype. Others discuss the volatility of the tech market and the potential for future rebounds. A few commenters speculate on the causes, including profit-taking and broader market trends, while some criticize CNBC's sensationalist reporting style. Several also highlight that market cap is a theoretical value, distinct from actual cash reserves.
Y Combinator (YC) announced their X25 batch, marking a return to pre-pandemic batch sizes with increased applicant capacity. This larger batch reflects growing interest in YC and a commitment to supporting more startups. Applications for X25, the Spring 2025 batch, open on November 27th, 2024 and close on January 8th, 2025. Selected companies will participate in the core YC program, receiving funding, mentorship, and resources. YC is particularly interested in AI, biotech, hard tech, and developer tools, although they welcome applications from all sectors. They emphasize their focus on global founders and the importance of the YC network for long-term success.
HN commenters largely expressed skepticism and criticism of YC's x25 program. Several questioned the program's value proposition, arguing that a 0.5% equity stake for $500k is a poor deal compared to alternative funding options, especially given the dilution from future rounds. Others doubted the program's ability to significantly accelerate growth for already successful companies, suggesting that the networking and mentorship aspects are less crucial at this stage. Some criticized YC for seemingly shifting focus away from early-stage startups, potentially signaling a bubble or desperation for returns. A few commenters, however, saw potential benefits, particularly for international companies seeking access to the US market and YC's network. Some also raised the point that YC's brand and resources might be particularly valuable for companies in highly regulated or difficult-to-navigate industries.
Summary of Comments ( 9 )
https://news.ycombinator.com/item?id=43140063
Hacker News users discussed Paul Graham's essay on contemporary wealth creation, largely agreeing with his premise that starting a startup is the most likely path to significant riches. Some commenters pointed out nuances, like the importance of equity versus salary, and the role of luck and timing. Several highlighted the increasing difficulty of bootstrapping due to the prevalence of venture capital, while others debated the societal implications of wealth concentration through startups. A few challenged Graham's focus on tech, suggesting alternative routes like real estate or skilled trades, albeit with potentially lower ceilings. The thread also explored the tension between pursuing wealth and other life goals, with some arguing that focusing solely on riches can be counterproductive.
The Hacker News post discussing Paul Graham's essay "How People Get Rich Now" (2021) generated a lively discussion with over 100 comments. Many commenters engaged with Graham's core thesis – that creating wealth in the modern era primarily involves building something users love, often through software startups.
Several compelling comments expanded on this idea. One commenter highlighted the increasing accessibility of tools and resources for building software, lowering the barrier to entry for potential founders. This democratization of technology, they argued, empowers individuals to create and distribute products globally, a stark contrast to the capital-intensive industries of the past. Another comment built upon this by pointing out the network effects inherent in software, allowing successful products to scale rapidly and reach vast audiences, leading to significant wealth creation.
However, other commenters offered counterpoints and nuances to Graham's perspective. Some argued that Graham's focus on software startups overlooked other avenues to wealth creation, such as real estate, finance, or even traditional businesses that leverage technology. They suggested that Graham's experience in Silicon Valley might bias his view towards tech startups. Another line of discussion revolved around the societal implications of this wealth creation model. Some questioned the distribution of wealth generated through software, noting that the "winner-take-all" dynamics of the tech industry can exacerbate inequality. Concerns about the potential for monopolies and the ethical considerations surrounding data privacy were also raised.
A few commenters critiqued Graham's framing of "building something users love," arguing that focusing solely on user satisfaction could lead to the creation of products that are addictive or exploitative. They suggested that a broader perspective, encompassing societal impact and ethical considerations, is crucial for responsible wealth creation.
Finally, some comments offered practical advice for aspiring entrepreneurs, echoing Graham's emphasis on building. They encouraged focusing on solving real problems and iterating based on user feedback. Others cautioned against blindly following the startup path, emphasizing the importance of personal fit and risk tolerance. In essence, the comments section provides a rich tapestry of perspectives on wealth creation in the digital age, expanding on, challenging, and contextualizing Graham's core arguments.