19 billionaires who used to be dirt poor

Nothing to do with investment, but I find these rags-to-riches stories inspiring. They are also the best refutation of Thomas Piketty’s theory*:

Not every billionaire was born with a silver spoon in their mouth. In fact, many came from nothing at all.

The “rags-to-riches” trope may be a cliché, but it’s one that’s definitely grounded in reality. Through extraordinary grit and perseverance, individuals across the globe have beaten the odds and achieved their own rags-to-riches stories.

Here are 19 people who started off life poor and went on to become billionaires.

Starbucks’ Howard Schultz, now worth $US2.9 billion ($3.8 billion), grew up in a housing complex for the poor.

In an interview with the Mirror, Schultz says: “Growing up I always felt like I was living on the other side of the tracks. “I knew the people on the other side had more resources, more money, happier families. And for some reason, I don’t know why or how, I wanted to climb over that fence…..”

Source: 19 billionaires who used to be dirt poor

* In his 2013 book, Capital in the Twenty-First Century, French economist Thomas Piketty suggests that concentration of wealth grows when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term. His “silver spoon” theory, that the primary cause of inequality is the high rate of return earned on inherited capital, doesn’t seem to fit with the high number of rags-to-riches stories in the Forbes List.

Some concentration of wealth is due to inherited fortunes, like the Walton and Mars families, but many of these are only second or third generation. Far more are first-generation wealth like Bill Gates, Jeff Bezos and George Soros.

Will Durant (The Story of Philosophy) has a far simpler explanation:

“Nature smiles at the union of freedom and equality in our utopias. For freedom and equality are sworn and everlasting enemies, and when one prevails the other dies.”

While I believe inequality is a necessary price to pay for freedom, we need to ensure that the wealthy do not exert undue influence over the political system. Else inequality can get out of hand and lead to the collapse of freedom, either by dictatorship or a populist revolt.