Archive for the ‘Wealth redistribution’ Category

How do self-made billionaires self-make their billions?

June 8, 2016

Yesterday, we posted that there are about 1,800 billionaires in the world and that about 2/3s of them are self-made … not just born lucky.

According to a PwC study, the self-made billionaires usually started at a big company, some were fired from the big companies, and most became serial entrepreneurs.

Usually they got on the map with their first or second venture, but built their wealth through a series of successive (and highly successful) ventures.

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The PwC study also identified 5 traits that were relatively common across the self-made billionaires.

 

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Broadly speaking, PwC says concludes that most business managers are “performers” – linear logicians who are good at execution .

The self-made billionaires are “producers” who  look at the world from different angles — allowing them to spot opportunities and to turn good ideas into great businesses.

More specifically, the PxC team concluded that “most self-made billionaires – the “producers” –practice five habits of mind — ways of thinking and acting that generate uncommonly effective ideas and approaches to leadership.”

The 5 traits:

1. Ideas: Empathetic Imagination

The producers typically worked in their field long enough to have an awareness of critical trends, empathy for customers, and knowledge of existing practices.  Then, they added a healthy dose of imagination to change the game.

2. Time: Patient Urgency

“The creation of massive value in an industry does not happen overnight. The billion-dollar idea often comes after years, even decades, of commitment to a market space. Skilled producers learn to be patient. They know how to wait for the right idea at the right time. But once they hit on a compelling idea, they have a bias toward action that compels them to take urgent steps.

3. Action: Inventive Execution

Many executives take product design and go-to-market strategies as givens. “The business model, pricing, functions, sales pitch, and deal structure are treated as inherited, predefined by the models, costs, and pricing that already exist in the company and industry.“

Producers redesign opportunities everywhere – both in the product – broadly defined – and the implementation.

4. Risk: Relative, Not Absolute

“Producers, in general, are distinguished not by the level of risk they take, but by their attitude about risk. Most people measure risk in absolute terms: Will this business succeed or fail? Producers view risk in relative terms: Which option presents the greatest opportunity? If the opportunity is right in a risky venture, they’ll look for ways to mitigate risk”

5. Leadership: Teaming with Performers

“The idea of the solo genius is so pervasive in the way people talk about and think about extraordinary success that it obscures the real story of how good ideas become great businesses. Self-made billionaires are not alone. Producers have the ability to see beyond the parameters of what exists today to imagine new opportunities. Performers, in turn, have the ability to optimize and achieve within known parameters. Value creation requires both.”

Producers surround themselves with producers …

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Bottom line:

Yeah, wealth distribution is skewed. No argument there.

But, it’s wildly misleading to characterize the richest of the rich as folks who were just born lucky.

The majority of the made their own luck … and earned their wealth.

Sorry, if the facts don’t match the popular narrative …

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Tomorrow, take the Producer Quiz …

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#HomaFiles

Follow on Twitter @KenHoma            >> Latest Posts

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How many billionaires are there? How many are self-made?

June 7, 2016

With all of the vitriol now being cast at rich people, and with all of the broad-brush policy proposals to redistribute their wealth … you’re probably guessing a pretty big number, right?

image

Well, Forbes reports about 1,800 billionaires worldwide  … holding $7 trillion…   or roughly 7% of the total global gross domestic product.

1.800 isn’t a particularly big number, right?

But, even I concede, they skew the distribution of wealth.

The billionaires always seem to get caricatured as Saudi princes, one of Sam Walton’s descendants  or Paris Hilton – all just lucky by birth and clearly undeserving.

Well, PwC’s think tank dug deeper into the numbers and uncovered some facts that tend to disrupt the popular narrative …

(more…)

Rich man: “What inequality?”

August 12, 2015

According to a CNBC summary  of a study published in the Journal Psychological Science …

The richer you are, the more likely you are to think that others are wealthy, too. 

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According to the study’s authors, the reason for the misconception is simple …

(more…)

How do self-made billionaires self-make their billions?

July 31, 2015

Previously, we posted that there are about 1,800 billionaires in the world and that about 2/3s of them are self-made … not just born lucky.

According to a PwC study, the self-made billionaires usually started at a big company, some were fired from the big companies, and most became serial entrepreneurs.

Usually they got on the map with their first or second venture, but built their wealth through a series of successive (and highly successful) ventures.

image

=====

The PwC study also identified 5 traits that were relatively common across the self-made billionaires.

 

======

Broadly speaking, PwC says concludes that most business managers are “performers” – linear logicians who are good at execution .

The self-made billionaires are “producers” who  look at the world from different angles — allowing them to spot opportunities and to turn good ideas into great businesses.

More specifically, the PxC team concluded that “most self-made billionaires – the “producers” –practice five habits of mind — ways of thinking and acting that generate uncommonly effective ideas and approaches to leadership.”

The 5 traits:

1. Ideas: Empathetic Imagination

The producers typically worked in their field long enough to have an awareness of critical trends, empathy for customers, and knowledge of existing practices.  Then, they added a healthy dose of imagination to change the game.

2. Time: Patient Urgency

“The creation of massive value in an industry does not happen overnight. The billion-dollar idea often comes after years, even decades, of commitment to a market space. Skilled producers learn to be patient. They know how to wait for the right idea at the right time. But once they hit on a compelling idea, they have a bias toward action that compels them to take urgent steps.

3. Action: Inventive Execution

Many executives take product design and go-to-market strategies as givens. “The business model, pricing, functions, sales pitch, and deal structure are treated as inherited, predefined by the models, costs, and pricing that already exist in the company and industry.“

Producers redesign opportunities everywhere – both in the product – broadly defined – and the implementation.

4. Risk: Relative, Not Absolute

“Producers, in general, are distinguished not by the level of risk they take, but by their attitude about risk. Most people measure risk in absolute terms: Will this business succeed or fail? Producers view risk in relative terms: Which option presents the greatest opportunity? If the opportunity is right in a risky venture, they’ll look for ways to mitigate risk”

5. Leadership: Teaming with Performers

“The idea of the solo genius is so pervasive in the way people talk about and think about extraordinary success that it obscures the real story of how good ideas become great businesses. Self-made billionaires are not alone. Producers have the ability to see beyond the parameters of what exists today to imagine new opportunities. Performers, in turn, have the ability to optimize and achieve within known parameters. Value creation requires both.”

Producers surround themselves with producers …

=====

Bottom line:

Yeah, wealth distribution is skewed. No argument there.

But, it’s wildly misleading to characterize the richest of the rich as folks who were just born lucky.

The majority of the made their own luck … and earned their wealth.

Sorry, if the facts don’t match the popular narrative …

=====

#HomaFiles

Follow on Twitter @KenHoma            >> Latest Posts

=====

How many billionaires are there? How many are self-made?

July 30, 2015

With all of the vitriol now being cast at rich people, and with all of the broad-brush policy proposals to redistribute their wealth … you’re probably guessing a pretty big number, right?

image

Well, Forbes reports about 1,800 billionaires worldwide  … holding $7 trillion…   or roughly 7% of the total global gross domestic product.

1.800 isn’t a particularly big number, right?

But, even I concede, they skew the distribution of wealth.

The billionaires always seem to get caricatured as Saudi princes, one of Sam Walton’s descendants  or Paris Hilton – all just lucky by birth and clearly undeserving.

Well, PwC’s think tank dug deeper into the numbers and uncovered some facts that tend to disrupt the popular narrative …

(more…)

First comes love, then comes marriage …

January 15, 2014

… then comes Daddy with a baby carriage.

The verse was drummed into my generation, but I bet many of you are too young to have ever heard it, right?

 

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Well, the essence of the rhyme’s message was captured in a WSJ op-ed this week.

Ari Fleischer – one of Bush’s press secretaries wrote:

“The U.S. is steadily separating into a two-caste system with marriage and education as the dividing line. In the high-income third of the population, children are raised by married parents with a college education; in the bottom-income third, children are raised by single parents with a high-school diploma or less.”

A better and more compassionate policy  to fight income inequality (than redistributing wealth from working families) would be helping the poor realize that the most important decision they can make is to stay in school, get married and have children — in that order.

One might dispute the conclusion, but here are some facts …

(more…)

Bentley bumper sticker …

November 29, 2013

Gone viral on the net …

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Thanks to KZ for feeding the lead

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Spreading the wealth … from the suburbs to the center city.

August 24, 2012

Stanley Kurtz is a senior fellow at the Ethics and Public Policy Center and author of the new book, “Spreading the Wealth: How Obama Is Robbing the Suburbs to Pay for the Cities”.

His central premise was summarized in Forbes:

In the eyes of the leftist community organizers, suburbs are instruments of bigotry and greed — a way of selfishly refusing to share tax money with the urban poor. 

To reverse the trend, some groups advocate systematically redistributing the wealth of America’s suburbs to the cities via  “regional tax-base sharing,” a practice by which suburban tax money is directly redistributed to nearby cities and less-well-off “inner-ring” suburbs.

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President Obama has lent the full weight of his White House to the  efforts.

A federal program called the Sustainable Communities Initiative, for example, has salted planning commissions across the country with “regional equity” and “smart growth” as goals. 

These are, of course, code words. 

“Regional equity” means that, by their mere existence, suburbs cheat the people who live in cities. 

It means, “Let’s spread the suburbs’ wealth around” – i.e., take from the suburbanites to give to the urban poor.

“Smart growth” means, “Quit building sub-divisions and malls, and move back to where mass transit can shuttle you between your 800 square foot apartment in an urban tower and your downtown job.”

Suburbs are for sellouts:  That is a large and overlooked theme of Obama’s famous memoir, Dreams from My Father.  The city is the moral choice.

He attributed urban decline to taxpayer “flight” to the suburbs. 

So, compulsory redistribution of suburban tax money to cities was the only lasting solution to urban decay. 

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