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June 20, 2014

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Getting college paid for should exclude you. Sorry, but that's (on average) a six-figure gift, much more for a private school. Large loans count too, but the "gift of a job", unless it's paying above market, probably shouldn't.

Starting off middle-class by itself shouldn't take you out automatically.

This discussion hits a nerve with me.

I think the term "self-made" should never be applied to oneself and that trying to write some Horatio Alger novel about oneself is the essence of conceit.

How about a little bit of thankfulness for what each of us has been given, perhaps by the collective society and this great nation?

Me...self-made? Hardly.

Public schools K-12.....thanks to state and prop taxes.

State U....again thanks state taxpayers. And my parents (for 1/2 tuition). Oh, yeah, and the Rotary club for the small scholarship. Then the Alumni scholarship too. And the professor's grant money for my paid job in his lab.

At graduate school.....state university again. And an NSF Fellowship. And research grant money from a bunch of different place.

So did I work hard...undoubtedly.

So few thoughts:
1) Any success I've had was a lot of help.

2) The nation has invested a lot in me. I will never complain on April 15th.

3) Whatever I give back to charities (schools, non-profits) is just some combination of paying it back and paying it forward.


So while not self-made, I've tried to make the most of myself. And I'm thankful for the great opportunities I've been given and the investments unknown taxpayers and strangers have made in me.

Fairly simple.

If what you do or your success can't be tied to a relative, you are likely self made. No nepotism, no family business, no gifts or seed money from family that is out of the ordinary. No safety net.

There is a big difference between those that take risks knowing if they fail, someone is there to help them, vs someone who has no safety net. That is a big signal as well. If you own a business and many of your customers know your family, big sign.

If however you moved to a new town with no family by yourself, started a job, or company, or whatever on your own with no monetary assistance and none of your co-workers or clients know your family members, id say you are self made.

Being self made has absolutely zero to do with a dollar amount. You can be self made making $15K per year with a negative net worth. Self made is about independent operation, not wealth.

You judge whether or not I am self made.
I grew up in England during WW2. My father was a fireman, never owned a home, and died with just enough money for his cremation. My mother never worked outside the home. I won a scholarship to our local Boy's Grammar School where I obtained my school leaving certificate with grades good enough to go to the University of London. Unfortunately there was no way that I could afford to support myself living 100 miles away from home.

I decided my best option was to become a 5 year indentured apprentice at a local aircraft company that was just a 10 mile bike ride away. While I was living at home for that 5 year period I gave my mother about 1/3 of my small paycheck every week to help with the food.

I was soon upgraded from a Trade apprentice to an Engineering apprentice and went to our local community college 1 day and 5 evenings/week to work towards a certificate that was comparable to an engineering degree. I did a paper route every day before going to work and started saving every penny I could.

By the time my apprenticeship ended I had a steady girlfriend that worked as a librarian. Together we had saved up about $400. One day at work I had a conversation with a fellow worker and he told me that he was leaving that week to take a job with a Canadian aircraft company that was building a Mach 2 interceptor airplane to protect North America from attack from Russian bombers. That sounded good so I applied for a job and in November 1956 we got married and left for Canada. The company paid our boat passage and we landed with $400 between us.

Neither of us ever received any money from our parents or relatives. Fast forward to the present day, we both had careers in the USA, where I got my MS degree, retired debt free in 1992, own our home in Silicon Valley, a beach condo in Santa Cruz, and our investment portfolio is $7.64M. We have 3 grown children, the two girls are multi-millionaires, the youngest, a boy is still working on his first million after a divorce cut his savings in half.

Well said, M. Your three points at the end are key.

The phrase "self-made" hits a nerve with me as well. Everyone's life is connected - we live in a society. Whether you know it or not, you are receiving (and giving!) help in lots of unquantifiable ways. It's just part of being human. Unless you literally live on a deserted island -- if you grew up by yourself on a deserted island then yes, I guess you could call yourself "self-made". :)

I also agree with M that even without direct financial help we all benefit from the indirect support of others.

I have thought about the "self-made" question from the point of view of an immigrant. I grew up in Eastern Europe, my parents had enough to go by in a country where few people had much, so they were sort of middle class. Same for my husband - he grew up in a rural village in another EE country, where most people worked on the state farms, but his mother was a teacher, so they also counted as sort of rural middle class. Neither my husband nor me got financial help from them, but then we didn't need it much since all schools were public, university was free or paid by scholarships (my parents did pay for my housing and food during the first 2 years of college). When we moved to the US for our MBAs we had $2k saved between us, and we took on about $120k in loans to make it work. Now, 12 years later, we have paid all loans, except for a small mortgage amount, and we have ~$800k in net worth. So, on the surface this would point towards us being self-made.

But are we really, since we indirectly benefited from the free education in our countries, and from the middle class upbringing where our parents instilled in us love of learning and desire to achieve something more. I am inclined to say no.

My thought is we all know what the term means, and those being pedantic about the definition are attempting to discredit some while acknowledging others, by using their arbitrary cutoff based on 'feelings'. Case in point, Mitt Romney; self-made? Nobody who doesn't like him thinks so. Donald Trump? Barry Bonds? Sam Walton? Whatever.

My parents gave me much more than I needed to become 'self-made'.:-) Seriously, I have lots of people (family, teachers, colleagues, friends) that reached down to pull me up, give me tools, an example for success (and failure) and whatever good things my life has become is greatly due to their generosity. Mostly my wife, who is awesome. I was also the beneficiary of being born in a country and time in history with amazing opportunity and social structures already in place, allowing me to stand on the shoulders of those who came before. I do like to read people's definitions of the term, and their stories. But a great deal of the idea of 'self-made' involves 'comparison', and Theodore Roosevelt said "comparison is the thief of joy." Very true.

Speaking of comparison, fwiw, the poster who started this whole conversation is a 'class warrior' with some kind of social/political agenda. that poster is also the one who incorrectly claimed a Christian-theme to Dave Ramsey's PF program for high-school kids. No shame in having an agenda, as long as you own it. Otherwise, you are just a sh**stirrer.

M, just want to echo the other responses that your answer was great. We should not denigrate those who have achieved great success, but those who do would be well served to exhibit your awareness and thankfulness for support received from our society.

The question and responses here seem to be focusing on where you started from, with the general consensus being that for the most part to be self made you need to start from zero.

This is an absolute approach and while I understand it I think it is a bit over simplified. There are many people that do not start from zero and every generation there get to be more of them. Does that mean that if you didn't start from zero you cannot take credit for making your own way?

I take a bit of a relative approach and it comes down to one question:

Who made it happen?

Some comments here think the govt and the community made it happen. It is true that we all live in a great society that offers more opportunity than any other on the planet. One could argue that due to our society not a single person in it actually starts at zero. However within that society your relative success depends mostly on you. With all the benefits given to us, we each decide what we do with it. Some start with more benefits that others but we still decide what we do with what we are given. Those that have great success took those opportunities and made the most of them. They made it happen, but with some assistance from the benefits of the society we live in. Does that mean they can't claim that they made it happen? I don't think that is right. There is no one in this country who has ever achieved 100% of everything they have ever done or made on their own. If because of this we can't say that people can take credit for the fruits of their labor that is a mindset that makes it difficult to encourage people to work hard and make their own way since we must tell them that it wasn't really them anyway.

The other mindset seems to be of the thought that you cannot have had any outside assistance in terms of any money given to you, loaned to you, or assisting you in your path. I think this mindset is similar to the first in that it is also backward looking with respect to an absolute start at zero. To me it depends on what you did with what you were given. Did you take it and do nothing productive with it and live off the benefits of the gift or did you invest that gift in a future that vastly surpassed what you were given. If a person starts with nothing and builds a net worth of 100K vs a person who received a loan from their family or even a gift of 100K and built a net worth of 10 million using it and all their many efforts, does that mean the first person is self made and the second person is not. I think they are both self made. Certainly the starting point of the second person gives them a position that makes it easier for them to go farther than the first person but what happens with that 100K and what it turns into depends entirely on them after that point in time.

My reasoning for this stance comes from the Bible and the parable of the talents. A man going on a journey gives 10 talents to one man, 5 to another and 1 to a third each according to his abilities. The man with 10 talents turns his into 20, the man with 5 turns his into 10. Both of these men took what they had been given and through their efforts turned it into more. They were greatly rewarded with more responsibility. The man with 1 talent dug a hole and returned the talent to the owner. The owner was irate and says that if nothing else he should have at least deposited the money with bankers to get interest. He was punished and his talent was taken away and given to the one with 10. The focus here is not the starting point but the results after that. Notice that the one given 10 doubled his and the one given 5 doubled his. Both did equally well even though the one with 10 made twice as much as the one with 5. He was given twice as much and returned twice as much. The phrase "to him whom much is given, much is expected." could be applied here.

This parable is not simply about money but the lesson can be applied to many things. The moral here is that it is not what you are given but what you do with it. Do you take what is given to you and do nothing with it. Do you let it provide you an easy life. Have you actually built any success yourself. Do you have any results to show for your efforts or are your results simply from the efforts of others.

We are all given things. Some of us are given great talents not great money. The person who is wicked smart has advantages over someone with below average intelligence. Can s/he take no credit for his results because s/he has an advantage over people who are less smart than s/he is? There are people who are very smart who turn into bums. They are so smart that they are good enough to get by without doing much work. They are like the man with the 1 talent. They wasted what they were given. There are people with below average intelligence who work hard and build a very good or great life and there are people with very high intelligence who use it to do great things, both are very successful. I judge those paths not by where the person started, but by where they went from there.

Getting back to money, If you are given 10 million dollars and simply put it in stocks and take the earnings and live off of it, even if it grows in value, you are not self made because you didn't actually accomplish anything with that money. However if you take that 10 million and use it to develop a business model that creates the next XYZ company that becomes a 1 billion dollar company are we going to say that person who did that is not self made? He started out with a big number but it was only 1% of what he turned it into and thus he gets no credit for making that happen? I do not share that view.

And the reason this is important to me is I am going to be in a position to set my kids up very well. What I worry about is the guy who was given the 1 talent. I don't want my kids to live a life of ease because what I will have by then can offer them that option. What I want them to do is to take whatever they are given and whatever enterprises they take over and build it into something beyond what I am building. If I am to accept the idea that unless you start from zero you cannot claim to have made your own way, then how can I instill a work ethic in my kids in that environment because they are not going to start from zero. No one wants to work hard if the result will not be credited to them.

When someone starts from zero and makes their own way it is very impressive. But if starting from absolute zero to be given credit for making your own way is the only true measure of success then many of us here have a problem. Most of our kids will not start from zero. Maybe you are OK with your kid not making his/her own way. I am not. I believe it is critical for young people to build their own path to success and not to just rest on the results of others. I believe that kind of life would lead to unhappiness and ruin. And if I believed you needed to start from zero to make your own way I would need to make sure my kids did not receive any of what I am building.

That idea would be a bit depressing to me. Luckily I don't share it.

Apex --

Awesome! Couldn't agree more!

FMF,

Wow you read fast. :)

"Self-made" and "successful" are two largely independent concepts. Recognizing that you are not entirely "self-made" if your parents could spend tens to hundreds of thousands of dollars on college, or even were able to give you a modest but stable home environment, has nothing to do with whether or not you are successful. I am not quite sure why there is so much ire and indignation aroused by the idea that your success may not have been attributable to your efforts alone, but rather that you may have been able to leverage resources given you by your family or society. Perhaps because then you might have to recognize the necessity of helping strangers as you were helped?

My analysis of my own career trajectory is much like M's, with a few differences in circumstance. My parents were able to give me very little (not even the modest-but-stable home environment mentioned above), and my resume looks like the classic case of someone who improved her economic situation through years of spectacular performance, but I got enough support from others and from our government institutions that I would not call myself "self made." And I don't really have a problem with that. Why would I?

IMHO you are made by what you do, not necessarily by what you were born with. In that aspect I agree with a lot of what APEX said.

If a person inherited $2M at a young age and turned that into $200M some years later through their efforts, do you think they'd consider themselves self-made?

If a person is brought into the family business and through their changes and initiatives in ten years it's worth five times more than when they started, do you think they'd consider themselves self-made?

If a singer goes to an open mike competition at a county fair and is picked up, coached, produced, and becomes a well know and well selling artist, do you think they'd consider themselves self-made?

Is their effort and hard work any less than someone from potentially rougher circumstances who started with less money, fewer connections, and less talent?

We are more likely to look at those who started equal to us or worse off and gained great success as being self-made. But we tend to look at those with advantages we didn't have who become successful with envy.

So I'm more into applauding people who have taken the hand they are dealt with and playing it to the max to achieve their goals rather than worrying about arguing if they started with a full house or just A high.

P.S. M9, if you think you don't have a political/social agenda yourself, you're kidding yourself. Everyone does. (If I was mistaken about the content of the Dave Ramsey PF curriculum, then I'm happy to be corrected. I must say I don't necessarily closely follow comments on a post after mine.)

"It’s not enough to be in the right place at the right time. You have to be the right person in the right place at the right time."

Harv Eker

"It’s not enough to be in the right place at the right time. You have to be the right person in the right place at the right time."

Harv Eker

Apex,

Well said. What is sad is how part of our society seems to be attacking the success of the person with the 10 talents.

I agree with several commentators here. The definition of self-made does hit a nerve. My parents would qualify for the "self-made" definition being immigrants who came to this country with only the clothes on their backs and a few bucks. After years of hard work and dedicated saving, they achieved their American dream of owning their own home, debt free, no retirement worries and have successfully raised and assisted their kids through school. I benefited from my parents' hard work, so I definitely don't qualify for the "self-made" definition. However, I work hard and save diligently. Should not being "self-made" marginalize my achievements because I received financial assistance from my loving parents? My parents told me many times that rejecting their assistance would be an insult for all that they worked for. Do I appreciate their sacrifices for their kids? Absolutely.

I think when you read about the many folks "featured" in this blog, self-made very much is THE common theme..

Even though my wife and I emigrated at the ages of 22 & 23 with just the promise of a job for me and $400 in savings which makes us "self made", we consider our children to also be self made. The reason being that while they were living under our roof all we gave them was basically food, clothing, shelter, and family vacations. They used our home phone of course but I charged them for any message units.

The tuition at state and local colleges was also very cheap when they were growing up in the 60's and all three of them supported themselves with a variety of jobs. These days it's a lot more difficult, or even impossible for early teens to get jobs. The kind of jobs our children used to do are now mostly performed by adults. At gas stations for example the procedures are automated with just one adult sitting in he office running everything. When my children were at the age where they needed a car I assisted them in obtaining inexpensive used cars and gave them zero interest payment books which they dutifully paid me back from the earnings from their part time jobs.

Of course when we die they will share our wealth and possessions as is pretty normal these days. They have also benefited greatly from me managing their investments which is why they are already wealthy by most standards.

When your parents say officially "I am proud of you", then, you are self made, beyond who have raised you.

Is Bill Gates self made? He had a wealthy lawyer father growing up. On a 60 Minutes segment 1 year ago, about Bill Gates and his foundation, at the very end, Bill Gates and Bill Gates Senior were interviewed together sitting at a table, Senior said humbly, "I am proud of him".

Don't you wish your parents will say that about you? You cannot judge yourself whether you are self made.

Can't say I get the strong feelings floating around this because I don't understand why there is "pride" involved with "making it" (whether it be "self" or not). I would think Bill Gates financial success would make Bill and his father "happy" and "comforted" and other things, but not proud. I do think Bill's father is probably proud of the talents his son has (including the obvious hard working one), and probably proud of what BIll is doing charitably only possible b/c of his financial success, but not proud of the financial success itself.

And I'm pretty sure no one is "self"-made if the argument continued. At some point you'd have two born paupers fighting over whose mother loved them less.

Here is the exact opposite of "self-made" that just came out as a news article this week....this person is counting on being taken care of by all of you and can't understand why that makes them a risk...

http://online.wsj.com/articles/student-debt-takes-a-toll-on-some-home-buyers-1403305623


Tiffany Reed, a Rock Springs, Wyo., veterinarian, says the $65,000 she earns each year gives her the means to pay down a mortgage, but tough lending standards have stood in the way. Three years ago, a lender rejected her because of her nearly $450,000 in student debt, including interest, mostly accrued at veterinary school. So Ms. Reed, 33, bought a mobile home from an acquaintance, paying him monthly.

"I was so surprised when I was turned down. I'm a doctor. I have a good-paying job," Ms. Reed said. She plans to make payments for an additional 25 years under the government's income-based repayment program, then hopes to have the remainder forgiven.

I think the term 'self-made' is a fiction; one that is both unnecessary and misleading. As someone who left my parents' home as a teen and far outpaced my parents and siblings in wages and assets to become a member of the 1%, I'm more aware of the luck-factor than is given credit for here.
Self-employed or Entrepreneurial? Sure. Consultant or contractor? Sure. But self-made? No such thing. There are inputs to success and failure that we neither select nor control. Even Gates' own words: "I've been very lucky, and therefore I owe it to try and reduce the inequity in the world."

Wealthy and successful is already wealthy and successful. It doesn't need to be further polished up with a term like 'self-made' that implies we are deserving of our nice balance sheets and others who haven't done so well are deserving of theirs.

@Steve,

Your comment is a bit strange to me.

You say that you expect bill gates financial success would make him and his father happy and comforted by not proud. Why is that? If someone wins the lottery they will certainly be happy and comforted. Based on the adjectives you have chosen there seem to be no distinguishing how you should feel about winning the lottery and building a successful business.

Then you say Bill's father would probably be proud of the talents he has. This is even more strange to me. Talent is something you are born with. Why should you be proud of that? There are plenty of talented people who waste their talents. Should they still be proud of their talents?

I would use both of the examples you gave to describe the exact opposite feelings you did. Bill and his father should be very proud of his financial success because of the "effort" he put in to achieve. As to my point from my previous comment, it's the effort that matters not the starting point with respect to whether you were given some money or whether you were blessed with talents.

Now if you have talents or were given money (as in the lottery) that will likely make you happy and comforted but it should not make you proud. Pride is something you earn. It's something that comes from effort and accomplishment.

This kind of pride should be distinguished from arrogance and boasting. There is no point when that kind of pride is healthy and it is often based on things that are not earned, like talents, or wealth status that was given to you. When that kind of pride is displayed it is disgusting and gives off a repugnant odor that no one wants to be around.

Self-Made is a simple concept for me. Maximizing the utilization of resources at your disposal. Whether it be intelligence, opportunity, a loan, education/training, etc. These are all resources available to people (by society, government, banks, family, etc.) which can help get one on the right path.

The key to this argument is what "self-made" XXXXX is ... where XXXXX is a noun. Millionaire, success, out of debt, failure, burger flipper, etc. You can be a self-made successful burger flipper by having a net worth in the $100k range and having no (or limited) debt. However are you can be a unsuccessful burger flipper as well by spending all your money each month, having no savings, and going into tons of debt.

I like the discussion, but feel people are being to picky on their answers. Some people would label me not self-made and others would label me as such. I know I am deep down self-made, and had some "help" and "luck" along the way.

@Big-D

Well said. It seems too many people hear the word self-made and assume that means people that those using it think the person had no help, no luck, no money, no anything.

Everybody has had some of all of those.

And yet we choose our path and that choice matters. It matters a lot.

"Two roads diverged in a wood, and I--
I took the one less traveled by,
And that has made all the difference." - Robert Frost.

@Big-D

LUCK is definitely a huge factor but often you can't really tell whether something you did had luck going for you or not, until some years later.

When I look back from a 79 year old vantage point the major decisions in my life have all turned out so well that I wouldn't change a single one.

Some of the major events that have contributed to my success were the result of chance, spur of the moment, decisions that depended upon such things as:

Relationships, starting and ending, or continuing for a long time.
Chance meetings and conversations with others.
Events totally beyond my control such as take place in the financial markets and after major government decisions.
Quick decisions involving real estate purchases or job changes that turned out very well indeed.
Acting upon something I read about in a newspaper or magazine.
I also think that the economic period that includes your education and your working life can vary greatly so your birthdate can be a big factor. There's also the impact of wars, especially during those periods where conscription was in force.

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