How to earn a billion dollars

She also pays full UK tax on her earnings, the 36th most of any individual.

https://moneynation.com/jk-rowling-net-worth/

For authors, the arguments are again quite simple - billionaire authors or directors don't become billionaires by selling books or movies, they become billionaires from much larger businesses that employ way more people who were collectively much more critical to the success of said businesses than the authors themselves. JK Rowling didn't become a billionaire until the movie franchise and the toy mega production began. If the movies hadn't happened, or the toys hadn't happened, she would have just been an extremely rich multimillionaire.

Again, if all it takes to become a billionaire is 15% growth rate for 5 years, which is easy, then if you start with two billion dollars and grow at 15% per month, you'll be a trillionaire in 5 years. And 5 years after that, a quadrillionaire. If the billionaires are literally generating billions of new value, what explains why trillions can't be generated in the same way?

If the market is limited, then it means that you can't grow your way to a billion dollars, you have to displace others - either competitors in the same market, or other markets as well. So now there's a much clearer chance that you're using underhanded means to actually get your billions - you're not growing a new pristine market that people just love, you might just be edging out competitors or snuffing out other markets that had existed before - and perhaps were limited by things like regulations or externalities that you simply choose to ignore.

And the question of externalities and unfair competition and corruption is not tangential, it is the whole point that Alexandria Ocasio-Cortez or Bernie Sanders or others in this anti-billionaire movement are making. Not talking about it is simply ignoring their argument. The problem isn't "oh, I didn't realize that simply growing at 15% every month for 5 years will make a million dollar business into a billion dollar business". It's "the actions that you need to take in order to continue growing at 15% every month for 5 years are going to include things like un priced externalities, corruption, cartel behaviors, etc". Addressing how you can sustain this growth, and how the markets can have so much money in them, are exactly the most important things - not the trivial math of exponential growth that he discusses, condescendingly, at length.

Now with a 6bil market cap is seems.

https://news.ycombinator.com/item?id=8863

(Apologies to BrandonM for reminding everybody...)

Like poet/warrior/advisor that convinces the King to give them one grain of rice on the first square of the chessboard, two grains of rice on the second square, four grains of on the third square, eight on the fourth - and so on, doubling the number of grains each square until the 64th square. The King can no more deliver 2^64 grains of rice that PG's founder keep her 93% growth rate consistent for 64 months (or even the calculated 9.5 months to make her a billionaire).

Yes, it's true that a very few tech startup founders create billion dollar wealth by "making what the people want" - but anybody trying to tell you the naive compound interest math makes it inevitable, is trying to sell you something (like perhaps their companies startup accelerator program or venture capital investment opportunities).

What negative actions has Google Amazon and Nvidia done due to them prioritizing growth endlessly?

For Google, they didn't prioritize growth or they would have moved on AI a decade ago, but they were afraid of having tech journalists who hate them already write mean articles about how their AI is harmful.

Amazon just .. I don't know, keeps squeezing out operational efficiencies that get me next day delivery? Or developing AWS to enable other people to build apps?

Nvidia sells GPUs. Maybe you're a gamer and the push into AI means higher GPU prices?

I'm at a loss here. I don't think anyone is mad at these companies outside of a tiny vocal terminally online minority.

I would say value is subjective. For example, some people might consider a successful game as having created value. Others might view it as too addictive and see the negative value on society as a whole.

It could be very true that in the long arc of history, most of the "value" these companies have created is seen as a net negative. Take smartphones for example. They have created "value" but it's very possible that in 100 years when we better can evaluate what they have done to kids who grew up with them, we well conclude that they were a net negative until their usage was rained in. The only opposing force is government regulation and that's exactly what is wrong with these types of companies (and billionaires in general). They are the ones that stop reasonable legislation from happening because they have too much power because they are so large/rich.

Counterexample, a restaurant worth $202 billion: https://stockanalysis.com/stocks/mcd/market-cap/

One of the arguments against billionaires really deserving that much money is that while they own the shares, the scaling up is done by a labour force that doesn't capture this growth, "only" (so goes the argument, I do know about share options) "their wages".

How many burger flippers get compensation in the form of shares in the parent company? I genuinely don't know, but I do expect it to mostly be in the form of pension funds rather than stuff they can see in their working lives. Pension funds are a lot of money, they need to be so those with them can retire, same logic as FIRE because being a pensioner is the first three initials of FIRE.

This is probably for the best, owing to something not explicitly mentioned in the article: startups are risky. This is as much a lottery question as it is an effort question, because "cool idea" absolutely does not mean "make it and they will come", no matter how hard working the founders (and first hires) are.

Also an argument for El Chapo and friends (if we didn't criminalize their products and add the violence around the trade, see Alcohol and Tobacco).

> - but I hate them too.

Why do you hate them if you don't think they are bad?

You seem to be saying, "it's not illegal; I will hate it, but it is not bad". What is "illegal" is an arbitrary classification that different countries choose. That's the point of what the unnamed politician (it's AoC I think?) is saying: those things should be illegal.

As I said, I'm not a person that thinks that correct allocation of capital isn't a useful role. Really good VCs and investors are really really important.

However like art - it can be both simultaneously true that art has intrinsic value and that the art market is seriously corrupt.

Sure Paul adds value - but I'd humbly suggest not as much as he has extracted.

Much as I appreciate the former, the latter is if questionable benefit to most people, as the cost of launching e.g. GPS constellations and weather satelites was not the limiting factor for them, and direct-to-satelite phones and broadband at whatever the subscription price is, while neat, are not life changing for 99% of the population.

(Space is cool, I like space, he's free to spend his own money how he likes, but the IPO happened because he ran out of his own and private investors' money).

Also Tesla has problems going with that benefit, between court cases over marketing of FSD & if he committed fraud by saying he had secured funding to take it private, and also the P/E ratio is unjustifiable as a mere car company so they're pushing an AI narrative that's also unjustifiable for reasons long enough I can't be bothered to type them in again.

That and him selling Tesla shares worth more than the lifetime revenue of the business, which is sus.

Same guy ships cars that drive themselves, humanoid robots for the factory floor, brain chips that let paralysed people move a cursor with pure thought, and an AI running on a supercomputer his team stood up in months instead of years.

Your are debating people who sincerely believe that money is the economy and is not just a transaction mechanism lying on top of the actual goods and services that make up an economy. That the physical vectors of goods/services/logistics are just formalities relative to hard currency distribution, which, when implemented, would “solve world hunger” with $50 billion or whatever bunk number they claim is enough.

Your are dealing with envious, deeply incurious people who, as history has demonstrated again and again, will kill millions in pursuit of their ideology. There is no convincing them, debating them, enlightening them. It is futile.

https://edition.cnn.com/2026/02/04/world/lancet-usaid-global...

Are you seriously saying you think Elon Musk falls into the "now it is" category? That's making up something to get angry about.

He's been a billionaire for quite a while. IE he falls into the "used to be" category.

The intuitive difference is mostly between the many and the few. Between the ordinary people and the elite. If your money comes from many small streams, it looks likely that many people have independently determined that what you are doing is valuable. If there are a few large streams, the situation is less clear. Maybe your contributions are genuinely valuable, or maybe someone is picking favorites or choosing winners in advance. From that perspective, capital is a poison that permanently puts the reasons of your success in question.

No. Earned income is salary, and taxed as such. Unearned income is capital gains, exercised options, etc, not taxed as income. It's pretty easy.

If we just use this tax office definition, it's effectively impossible to earn a billion dollars because you'd need to pay yourself ~$1.6 billion dollars in salary (depending on where you live), and very, very, few people can afford to do that

> making money in ways that at least a substantial number of people don't think are "earning" money, such as monetizing users' data.

Is this not a contradiction? Or are you splitting hairs between a "true startup" and an enshittified bigCo?

It is quite possible for someone to have thought about their views before they formed them and maintain stable opinions over 15 years because they are aligned with objective reality. That is good. Then there is the opposite where they've got ridiculous views that don't make sense and they stick with them despite all evidence out of stubbornness. That's bad. But again, the exact view and the nature of the evidence is what matters.

Just so you know, the new generation is investing earlier than the previous generation.

Gen Z is also outpacing millenials on home ownership https://www.npr.org/2026/05/15/nx-s1-5791499/gen-z-homeowner...

The idea that the latest generation is not benefiting from the current situation is in your head, not reality.

These days, most people's experience at a big tech company is a political dystopia where everyone is optimizing for their promo packet.

That's going to get you 2 different audiences.

The good vibes and optimism have left the industry.

Things are measurably darker. Hell, we went from “do no evil” being a motto for Google to being removed entirely. Early Tech had a genuine claim on trying to be better than firms that had come before.

I'm always curious as to why something that happens to 100% of humans remains 'uncomfortable.' Like there's nothing in genetic code making aging (or death, I suppose) less uncomfortable. It's kind of fascinating.

Why would it be an unpleasant realization that you are less successful than 0.00012% of the world’s population? There is arguably something sick about a system that can make a significant number of people feel this way.

I'd say HN is slowly catching up with traditional SV startup culture dying, and seeing more non-VC-funded people flowing in as sites like Reddit enshittify. Those people identify more as tech workers than as early startup employees who aren't a billionaire yet.

Combine that with recent economic and political developments, and it isn't exactly surprising that a growing part of HN isn't a big fan of the über-wealthy tech elite trying to make their life worse.

I read the first half of PG’s essay and was left wondering if I should read the whole thing, just in case there was something in half 2 that redeemed half 1.

Most startups fail! Ignoring that reality, and only focusing on the slope of money growth is like saying that if you hit the right drafts you will survive falling out of a high rise window.

There is no such thing as a free lunch. The payoff for doing startups is the (incredibly small chance that you succeed) * (the absurd payout if you do).

Even VC funds fail.

If PG brought up survivorship bias at any point, it would have significantly armored his case.

So even if the debate reveals that no, there wasn’t a viable reconciliation, the debate was still worthwhile.

I've observed this in a lot of internet arguments, but have not been able to put it into words until you said this. It feels like everyone is more concerned about 'winning' the argument more than anything else.

His core premise is terrible if not outright facetious given the case he made. That the girl who is going to become a billionaire in his example has a startup that makes a product that everyone loves does nothing to disprove the point. Billions of people love VLC media player but Jean-Baptiste Kempf didn't become a billionaire.

The difference isn't the product, it's that what makes the startup founder a billionaire is that they're willing to pawn off their invention to people who do all the unethical things, while they laugh on their way to the bank, that's the point of the big check.

In some sense I prefer the robber Barron over the startup founder because at least the former doesn't pretend they're a saint between they've put one level of indirection between themselves and the exploitation.

What can happen though is that companies figure out how to prevent meaningful competition to preserve high margins. They're worth millions for the innovation but they get to billions through anti-competitive and extractive practices.

But we can start by not forgiving CG on death. That seems like a no brainer with no downsides.

No downsides I respect, at least. "We want to keep the business in the family" should be ignored.

You tax them. Wealth inequality of this magnitude is toxic to democracy. It's simply too much power. These men aren't gods, they are just flesh and blood and usually really terrible people. We are not staff at their resort. Let them live in luxury for the rest of their life, great. But they don't get to have more political power than half a million people put together.

Every American economic miracle has been precipitated by the government building basic infrastructure and doing basic research.

Is your theory that he dug it out of the ground with a shovel or something?

It might be that if personal wealth alone were (effectively, by taxation) capped to $100m, we would still have exactly as much collective wealth, innovation, and value creation as we do today. Possibly more, because of more wealth distributed onto shared infrastructure and into the fluid economy.

You might think: I can argue with them.

No. You can't. They literally couldn't care less about you or anyone else. They do, however fear retribution.

Folks who lend money against stock insist on being repaid. (In fact, they typically have the right to sell the stock to be repaid.) The money to replay was taxed. (It comes from salaries and/or stock sales. Borrowing more to repay previous loans just kicks the can down the road.)

Yes, this is a good take. I wish more people understood this. Things like sales taxes could address this. Land value tax, with single homestead exemptions are another.

I can assure you, with the utmost in direct observation, that they are extraordinarily obsessed with money. It is, in fact, the defining characteristic of their entire existence, literally by definition.

Any argument to the contrary is profoundly hilarious. Imagine if you came across someone that had over one billion model trains in his basement who was claiming that he wasn't super interested in model trains.

This is an illusion. A share has value because it represents the hypothetical future productivity of an abstract entity that may or may not even exist in the future.

At the margin, you can take an Amazon share and buy bananas with it. However you absolutely can't take the entirety of Amazon and exchange it for a trillion bananas. Those bananas don't exist.

More importantly, you can't take the entirety of Amazon and transform it into housing supply. I think people are often too careful about "missing the forest for the trees" and then conceive of problems as overly abstract. The affordability crisis is, first and foremost, a housing shortage.

Young people can't afford homes. Millennials are hitting 40 and realizing they may never afford one. Being secure in housing is pretty damn low on the Maslow hierarchy of needs. Sure maybe we need a more progressive tax policy, but this myopic focus on billionaires distracts from the real problem which is a housing shortage.

It consumes childhood and adulthood. Only when workers have power can the engines of innovation benefit the many.

Of course history is littered with failed autocracies aspiring to be capitalist/socialist/insert-econ-system utopia. I'd argue the current US administration is in an autocratic mode right now. And doesn't seem to be going well for any except the richest asset owners.

https://commons.wikimedia.org/wiki/File:Global_Distribution_...

> Modern day securities are broken because they're poorly regulated because the public doesn't vote for people that would do the regulation

And Billionaires and their media power has nothing to do with it

It literally is, though. For one's wealth to grow, the wealth of others must shrink. You could print more money, but that'd just result in inflation reducing everyone's wealth.

If you intend to say value is not a zero-sum game, I agree.

There are markets that can grow fast of course, but once that exceeds the overall economy it can only come from forcing other markets to shrink, and that limits the growth rate to which the fast-growing market can ultimately attain.

People got reasonably mad at Apple’s iron fisted control of the App Store and access to its platforms.

It got to the point that there was political will to force Apple to change. (Sort of, in some circumstances)

But during the golden age of the App Store, when Angry Birds came out—-it wasn’t something people were hemming and hawing about the fairness of distribution platforms it was more like: “wow! iPhone! Check out this game! Everyone is playing this thing, Jack White is playing it. You too can have this game for a few bucks, can you believe this?”

It is only after Apple had ridden the horse a good long while and reaped what came to be outsized profits and using the thing to control competition over an extended period that something really was done about it. (Sort of)

There are many other examples of this kind of thing.

Compensated creative expression has somewhat relied on it in the form of intellectual property, which has built in albeit relatively toothless expiration.

But even IP is under greater threat than ever with gen AI. Just look at what fans are doing with the Star Wars franchise on YouTube right now.

Anyhow, I agree with the system is flawed but I mean to point out that deciding a person or company has reaped enough for their thing is something we do on a case by case basis.

It is not easy to say when to say to someone or something has been compensated “enough.”

Why does it have to be earned through continuous effort? It seems like you’re defending a sweeping assertion (that you can’t “earn” $1 billion), but retreating to a narrower position based on a very specific definition of “earn.”

Yes, you can’t become a billionaire performing fungible labor compensated on a periodic (hourly or annual) basis. But I don’t see why that’s the dividing line between “earned” and “unearned.” A lawyer charging hourly will never become a billionaire. But there’s been a couple of lawyers (Joe Jamail, Mark Lanier) who became billionaires by securing enormous verdicts for their clients. Are you saying lawyers “earn” their money only if they charge hourly, but not if they get a share of the money they recover for their client?

That seems to be a weird definition of “earned” versus “unearned.” Maybe you can say that money is unearned when it’s inherited. Or that it’s unearned when it’s just accrued interest. Or that it’s unearned if it’s through socially questionable activities like high frequency trading. But most billionaires didn’t get their money in those ways.

If we don't have a system for that, then how would you incentivize people to take on bigger risks, bigger projects, etc?

Also, should the lottery not be a thing? What exactly are you advocating by this line of reasoning?

They know how to do one piece and finding and coordinating all those people (something else they don't know how to do) is work on its own that is valuable.

So a person figuring out how to scale their homebuilding methodology by teaching others and providing the *capital* with which they can implement that methodology isn't worth anything to you? I can't imagine a society that could work without these features -- we'd all be re-learning best practices every generation because there'd be no incentive to scale up ideas that work.

I think you're reframing his argument as something softer. Not whether they cheat or exploit, but whether they're primarily doing it. Is the cheating low enough or outweighed by the tremendous love for the product? I'm not sure he would agree that's what he's trying to say, but I would count that as cheating. At best, there is cheating, but it's worth it (for them and, I don't know, maybe/hopefully even for society).

You're also nudging it towards whether some billionaires are sometimes able to do it without cheating. It's hard to make a strong assertion whether the senator or PG's claims are meant strictly all or nothing. Both have language of this type. I couldn't say which one means it, though I think it's fair to judge hyperbole. I alluded to this in the prior comment, but I think it's fairly easy for CEOs to benefit from cheating happening downstream. Did Dropbox spam users' contact lists to grow? Did their PM or PMMs abuse push notifications for marketing? Again, I can see versions where this doesn't count as cheating for some. Or it does, just low enough level or normalized such that people redefine cheating. I think there's a lot of (often low level) cheating just built into business and it's mostly a matter of whether anyone will take you to task for it.

I don't think I fully agree with it, but OPs point wasn't about any of that and instead said capital gains (and clarified further - fungible, uninvolved capital without any other contribution). That's really different. If you want to attack that maybe use an example of passive index investors or pension funds allocating capital to a vc.

In fact, in some countries not paying yourself a fair-market-value salary is illegal!

Yes, we can say this. The IRS classifies capital gains as unearned income.

A lot of comments seem to not assume that ownership is equivalent to 'earning'. Why does capital need to pretend their wealth growth is equivalent to the effort of labour.

Over time, profits tend to decrease. To a point you can counter that by expanding and entering new markets but ultaimtely you reach the point where your only options are raising prices and/or cutting costs. To maintain this you often need to engage in rent-seeking behavior (eg national ISPs lobbying to make municipal broadband illegal).

As an intermediary, Uber needs to increase their margin at the expense of the driver, the customer or both. Same with DoorDash and all these others.

You see this when people try and start intermediary businesses like MyClean, TaskRabbit, tutor services and so on. They all face the problem that the customer and provider are always better off leaving the platform and dealing directly because the value-add of the intermediary is a lot less than what they charge to justify their profits.

(Eg agricultural revolution in the US)

I do believe in good safety nets as well and I think that shows in my voting record, so I’m not sure what else you would expect from me, if anything.

Additionally, since most startups fail, the founding engineer is typically better compensated than the founders. It’s only in the success case that it is a raw deal economically. However, in the rare case that it is a successful company, the founding engineer does alright and then also knows more about how to do it again.

The difference between founding engineer and founder is typically the difference between starting before any money came in or joining after (basically guts/conviction)

Maybe it depends on who you work for, but that was my experience.

I am struggling to understand where the unfair part is coming from. Nobody is making anybody do anything. Everything is transparent and above board. Everybody in this scenario is willingly working market wages (except for founders and early hires who work below market and take equity for a couple years because they believe in the idea)

(And in California where the most profitable crops are perennial fruits and nuts, probably outright stealing water from the aquifer or state irrigation system.)

You think she's doing the heavy lifting there? Creating the billions? While the underperformer at VideoBuster / Radio Shack is responsible for tanking the business? That's just not true.

And there's no guarantee my base pay would stay the same if profit-sharing become the law of the land-- it doesn't seem improbable that my base might decrease in this new economic landscape. Suddenly, part of my income waxes and wanes according to strategic decisions that I don't get to play a part in, according to market forces that I can't fully predict. My life overall becomes more volatile.

I'm not against voluntary profit-sharing. The company I work for now does it, after <x> number of years of employment. I just suspect a blanket mandate would come with some baggage.

> It's like you're side stepping the entire discourse.

No, they addressed that with:

> The only thing that would be non-consensual would be obligating the employer to redistribute her profit over and above what had already been negotiated.

Which would be truly immoral.

"lol"

Would you want to take a pay cut if your employer was having financial problems? Why not? Because you have an agreement on what your salary should be. It is fair that it works both ways.

I agree you’ve demonstrated that there is enough economic growth to not contradict PG’s hypothetical numbers. But I think we should strive for a deeper understanding than “all they had to do was capture… 0.05% of the increase in GDP”.

Just as a counter-example, a Robber Baron could monopolize all the profits in the rail sector and run a drug mafia on the side, and it would show up the same in your numbers; “all they did was capture 5% of the increase in GDP”. In other words, like PG you don’t actually prove the point you’re arguing; you just provided a story that doesn’t contradict it. (Capturing the annual wealth creation of ~350m*0.05% ~= 175,000 people doesn’t seem on its face to be obviously fair or routine, rather it seems like a tail outlier worthy of further investigation.)

The way I would frame it is, what we actually need to do is look at the firm level metrics and figure out what is going on. (A founder becoming a billionaire typically means their company grew to the order of $10b - let’s look at the business practices of $10b companies or founders with confirmed liquidity valuations in our range.)

If you look at founders like Jobs, I think it’s pretty clear he made his first $b (via Pixar) just by making things people loved. Companies like Uber obviously relied to some extent on regulatory arbitrage, and you can debate the timing of e.g. Google founders’ shift to monopoly rent extraction, I would likely argue they got their $b “fairly”.

The second order question of course - would markets price your company at $10b if they didn’t think you had a future monopoly opportunity? Expectation vs current reality makes this all more complex.

But I think for PG’s purposes you can ignore the second order and just talk about successful, billionaires who built things that people loved.

The problem of course is that nobody likes billionaires these days (except politicians of course) and so it’s a much less marketable narrative. And there is the crux of the problem; this post is not an honest attempt to increase our understanding of the world, it’s a political slogan.

Look, I know this is a tech forum and we don't claim to be good at the social sciences, but this is a central debate and r>g, the idea that the rate of return to capital tends to exceed economic growth over the course of history, is a major result from Piketty's Capital In The 21st Century that people interested in "grow the pie" vs "trickle down" really ought to be familiar with. Even if you disagree, you ought to be able to articulate why, and "the average includes winners and losers" ain't it.

"But life has improved, r>g couldn't have been true forever" -- last time the inequality bubble popped because of a great depression and two world wars. The capital was incinerated, metaphorically and literally. It's a cautionary tale and we should aspire to do better.