Somehow or another, I guess it wasn't very apparent before, Raj Chetty of Stanford University and other robinhood types trying to keep their jobs devised a study to prove what is already Universal Truth here at WSO.
Elitism and Generational Wealth leads to a higher probability of success in reaching the high life of the Rich.
Now I know many have come before and told tales of Success stories coming from lesser school. Statistically speaking, those of you brave souls, while enduring, are outliers as most don't make it. Your success came at a the cost of someone else losing.
The study further reports that University is irrelevant if you want to be in the upper 20%. If you want to be the top 1% or even the more elusive 0.1% or 0.01% you had better try to up that clout just a little more.
Reference:
How to get rich in America
Update: Those who throw shit sometimes ought to look in the mirror for a reality check. The above are all Scientific facts. Trying to deny it is like denying reason itself. Madness is the emergency exit... (name this quote and who said it)
TIA: This is America
Any info how much they spend on this study?
Enough to where they can still keep their chairs warm at the respective prestigious Universities that they publish for to generate a fine piece of work like this.
This is a load of bullshit, the vast majority of actual "wealth" that is created in this country is done so on the backs of entrepreneurs. If you want to join the top .1% through a W-2 then yes this information is relevant. However, the school you went to doesn't have any direct correlation to how successful you will be as an entrepreneur. The only characteristic besides raw intelligence that one can correlate to general IVY students is the amount of effort they put into their life. That however is not a trait only found in IVY league students.
People are upset at the obvious and I point out glaring errors in self preservation for telling the obvious.
Shoot the messenger of the messenger of the obvious... Swell. :)
Ultimately, it comes down to you and Lady Luck. Having a cash safety net does help to take certain risks. Having a neighbor that can write you a letter of recommendation will never hurt your chances of getting into a good school or getting your resume noticed. However, your performance will still be considered and their needs to be a slot you can fill. If you come from money you may not need to worry as much, but there is zero guarantee that you will be able to achieve the same results. Also, just because you did not go to a top business school or come from a privileged background does not mean you have zero shot at achieving success. The most successful people I personally know dug their own foundation and built their estate from their. Some started their own companies and others worked from the bottom up. Ultimately, they all worked to have what is theirs.
Victory favors preparation. That's the theme of these success stories anywhere. I've never heard someone say I slept through life and automatically achieved ABC goal by XYZ date.
Alright Gents, back to being serious and less so facetious.
After reading some of Raj's work I kind of have some respect for the guy because he is diving deep into the issue and his work is redistributed on a pretty cool website that illustrates academic thesis to support the wealth gap of America and the great divide between what we consider "Rich" as compared to generations prior.
Here is his work on the Geography of Wealth from June 2014: Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States
His latest work, referenced in my original post, was published very recently in January 2017: Mobility Report Cards: The Role of Colleges in Intergenerational Mobility
Both articles are about 100 page long so have run skimming through 200 pages of interesting academic analysis on this topic.
As with any academic paper, the pretty charts are on the very back preceded by the references and then the body of the argument with Abstract at the very beginning. Abstract + Charts should be good enough for 80% comprehension.
Enjoy and let me know what you guys think on these two topics of:
The Joker
The real wealth lies in ownership. Ownership of companies, land, whatever. Becoming WEALTHY as a entrepreneur is very difficult, so you might as well view on them as extreme statistical outliers. If you have a 300 person startup, that grows into a 30000 person company, only a small, small percentage of those will end up as wealthy. Or sometimes even rich.
But yes, generational wealth, that is passed down the lineage, will secure the most important asset: Capital. The stock market keeps hitting new records, but regular people don't see much of this? It's only the people that can afford to invest that does so, and so wealthy shareholders end up as the real winners. Where does this money come from? A huge part from inheritance. Doesn't mater what school you go to or went to, what you do for a living...as long as you can inherit wealth, you will stay on top by managing the money in a decent way.
Behind every rich Entrepreneur, there's wealthy investors (from traditional investors to VC). Take a look into Thomas Piketty's Capital of the twenty-first century. It has its flaws, but it's a good take on modern inequality, which stems from generational wealth.
Which one do you think has more merit? New Enterprise or Old Enterprise?
This is inherently false since statistically the overwhelming majority of inheritances are dwindled by the third generation. This is in no way saying that generational wealth isn't an advantage. Look at any of the Forbes X00 lists, the generational wealth is never at the top and that is talking second generation. You rarely see a third gen plus on that list and that is for good reason, the only thing that decimates wealth faster than inheritance is taxation. If I had a billion dollars that I passed down to three kids they wouldn't be able to recoup the loss due to taxation and distribution fast enough before they have to divy up their assets, the idea that families can just coast off the work of previous generations only lasts a couple of generations.
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