Hacker News Reader

Comment by habitue | Hacker News Reader

If you made $52M a year, with 5% growth per year in some super conservative investment, you'd have Warren Buffet's wealth in 87 years

If you got 10% it would be 50 years

Warren Buffet is definitely impressive, but compounding capital is a huge benefit

(Ok ok I ignored taxes, inflation blah blah)

Edit: just because this is fun: at $365M a year, you get WB wealth in 50 years at 5% and 32 years at 10%

Edit2: if you take Berkshire Hathaway's historical annualized return (20.8%), compounded quarterly, starting with $52M and no additional capital after that, you get WB wealth in 36 years.

View on HN

To be fair that would get you WB's present wealth. If Warren Buffet was still alive and investing just like you did, you would never catch up. This is one of the reasons social stratification can increase over time.

A valid point, but missing the point of the question, which I take to mean "Warren Buffet's current level of wealth". I don't think the desire is to catch up to Mr. Buffet.

He's still alive....

The wording is a bit confusing, but I believe they are saying that it would take that long to catch up to Buffett's current wealth. If you assume his assets continue to grow at the same pace as yours, you will never catch up.

Yeah sorry, I was assuming he will die sometime in the next 50-87 years being discussed and his money will be donated to charity. So Hypothetically if he became immortal or decided to give all the money to his children. Since historically the rate of return on capital is higher than the growth in income the gap between people who inherit a lot of capital and wage earners tends to increase over time.

Yeah, goes to show, what you earn is really nothing.

Also proves out the opposite though too. Buffett, and his kids could spend $1 million a day and never run out.

Totally! This is actually how the rich lived back in the 1700-1800s in Europe. They had an inherited estate and just lived off of the interest earned on it. It's a big reason why it's a good idea to have a reasonably large "death tax" specifically to prevent the exponential buildup of unearned inter-generational wealth.

That being said, it's also very fragile in a way. Not having skills or a wage means your wellbeing is subject to the overall economy. A lot of multi-generational fortunes were wiped out in WW2 and the great depression and never recovered.

Reply on news.ycombinator.com