he presents a great example of a couple of friends with beat up cars....
If 4 guys all have old beaters worth 1000 each. in total they have $4000 split evenly. Each has 25% of the wealth. If one guy goes, and decides to fix up his car, and his car is suddenly worth $3000, then suddenly he has 50% of the wealth, and the other three guys only have 16%. But the face value of the other three cars did not change.
That's what screws up the old 80-20 rule... you think it's unfair until you realize that the 20% created most of the wealth they control.
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http://paulgraham.com/wealth.html
he presents a great example of a couple of friends with beat up cars....
If 4 guys all have old beaters worth 1000 each. in total they have $4000 split evenly. Each has 25% of the wealth. If one guy goes, and decides to fix up his car, and his car is suddenly worth $3000, then suddenly he has 50% of the wealth, and the other three guys only have 16%. But the face value of the other three cars did not change.
That's what screws up the old 80-20 rule... you think it's unfair until you realize that the 20% created most of the wealth they control.