Stop Telling Me Trust-Fund Kids Are Financial Wizards

[Zorro]

Millions of poor folks have ambition, intelligence, and drive. But they did a much shittier job of choosing parents wealthy enough to grease the slide to success.

Elizabeth Holmes might be regarded as a privileged, entitled fraud now, but for a few years there she was mostly identified as the world’s “youngest female self-made billionaire.” The chattering classes damn near wore themselves out fawning over Holmes as a model of indefatigable rise-and-grindism, whose “dues-paying,” “honesty, hard work, self-reliance and perseverance” had taken her—a “college dropout” they kept reminding us— from child “prodigy” to tech “wunderkind.” (“She only pauses in her work to run—seven miles a day,” The New York Times gushed in 2015.)

No one’s charging that everyone who ever said anything nice about Holmes, who is currently facing several federal criminal charges, should have known the Theranos founder was allegedly swindling rich marks for their untaxed millions.

But what is definitely worth noting is that Holmes, whose congressional staffer mom and ex-Enron vice president dad reportedly used their connections to hook her up with the same megarich investors she would later reputedly defraud, was never a “self-made” anything. All the endless hailing of her as such was as much a part of the con as the rest of her now debunked story.

Holmes was breathlessly and repeatedly compared with very rich entrepreneurs like Warren Buffett, Bill Gates and Mark Zuckerberg, all of whom I only bring up because none of them are self-made, either. For all the boot-strappin’ mythologizing of their supposed backstories, not a single one turned rags into riches, billionaire messiah-style.

https://www.thedailybeast.com/stop-telling-me-trust-fund-kids-are-financial-wizards

[Tomconroy]

1. I put up a little thread on the trial last night.

She managed to talk a number of wealthy and or powerful people into parting with their money. At some point she must have known it was just a scam.
You make a valid point that the other three came from prosperous backgrounds. Did the parents of Gates or Zuckerberg help with initial funding? Their work was certainly their own.
Warren Buffett was able to approach his parents' friends as his first customers. Somehow I think he would have become a zillionaire no matter his background but maybe I'm wrong.

[paleotn]

6. The old saying "fools and their money are easily parted"

isn't qualified by social status, wealth or education. Just ask Bernie Madoff.

[stopdiggin]

10. +1. 'Privileged' background or no

(and there is some range involved in how truly 'privileged' all are) there is something setting these individuals apart from the pack (of rather hum-drum 'trust fund babies')

No question we glorify and idealize these 'entrepreneurs' and success stories way too much (part of our 'culture') - but I also think the OP papers over a lot of individual gifts and merit - in painting with rather broad strokes. Let's do a poll of where all of Zuckerberg's (or Buffet's) classmates are at this time.

[plimsoll]

20. Bill Gates Jr. (the dad) didn't actually put up funding, but was more essential to success

Than Bill Gates III, or Paul Allen.

Bill Gates Jr. wrote the contract with IBM for the OS. The contract prevented IBM from taking the OS and essentially not paying MS for it after the initial purchase. It was common for IBM at the time to acquire software, modify it and never pay the developer again. In essence Bill Gates Jr. turned Software into intellectual property.

[captain queeg]

2. Yup. I remember how she was elevated and admired.

I always thought there was something fishy about the whole story. I don’t know why I thought that and haven’t really paid attention but I certainly wasn’t surprised when it all crashed.

[Yonnie3]

3. But ...

they are wizards. They make money appear by magic.

[paleotn]

4. In one of the character's broken clock moments, Gordon Gekko didn't like them either....

The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit.

The offspring of the wealthy are no more ambitious or intelligent than the rest of us. One need only look at Donnie Trump and his spawn. Take away generational wealth, and they could all end up stocking shelves. Anecdotal, granted, but when you look at the data, it stops being anecdotal and becomes empirical.

Secondly, critical thinking can be lost on both the sophisticated and the uneducated rubes. Equal opportunity marks just waiting for the right con. The key to Holmes and her blood testing fraud is applying the Sagan Standard. Extraordinary claims require extraordinary evidence. I need confirmation of what seems impossible from evidence derived by unrelated experts, otherwise my default position is..bullshit. Holmes kept her fraud under the less than original cloak of "proprietary processes."

[harumph]

8. Excellent post.

[Casady1]

5. Steve Jobs

who was the most ingenious but not the most technical was not a trust fund baby.

[Tomconroy]

7. I think talented people can come from anywhere. Watching

The Muhammad Ali documentary I found out Don King's story for the first time. He had an idea, endless energy to pitch it and made serious coin. It does happen.

[harumph]

9. It does happen - and at least one person

wins the Powerball every time they call it.

[Tomconroy]

11. Artists and athletes are the obvious examples. Of course we

Know them because of all the publicity. I'm sure there must be others in fields we don't know about. And there are the Millionaire Next Door types. Quiet people who don't spend their money but invest it with skill. Middle class people can accumulate a few million dollars by retirement if they invest it wisely. Can't be done by the poor.
But the OP has a valid point.

[COL Mustard]

18. He Was Brilliant

Apple isn't the same with Cook, nor has it been since Steve left (any of the times).

[Iggo]

12. Right after I start.

[bucolic_frolic]

13. Index funds and 401Ks are not the choice of the wealthy and knowledgeable

Nor are hedge funds, which may be convenient, but be sure to choose wisely and expect volatility if not crash-and-burns.

The wealthy choose actively traded capital, or more frequently equity startups (venture capital) and private equity.

All else is for mere mortals, which is to say, the masses are sold a bill-of-goods. Families in the highest levels of the investment world know far better. As Vic Sperandeo told us in his 1990s book, Methods of a Wall Street Master, they don't even bother to send their kids to college. They just install them to learn the business.

[dlk]

14. There is a false belief that if someone is rich, they must be smart

And conversely, if someone is poor, they must be stupid. In reality, there’s no correlation.

[Wounded Bear]

15. Most wealthy people got their money the old-fashioned way...

they inherited it.

[gulliver]

16. Holmes's should have dyed her hair orange...

...become a Republican, and propped up her business with Russian oligarch money.

[Farmer-Rick]

17. Worship of the filthy rich is almost a prerequisite for capitalism to succeed.

If you hated all those people who got free leftover capital from dead relatives, then you would probably not go along with all the economic and political injustices.

But if you bow down to them, and think you too can be like them, then you end up working hard to mostly get nowhere. Upward mobility is practically dead in the US.

[ashredux]

19. RE: Trust Fund Babies....if they were very smart and trustworthy...

THEIR INHERITANCE WOULD NOT BE IN TRUST WITH A TRUSTEE!

[ck4829]

21. K&R