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The whole point of accumulating money is to spend it. Sure, you can accumulate more if you don't spend (I actually sorta doubt it, but let's assume it for argum

by hasenj 16y ago

The whole point of accumulating money is to spend it. Sure, you can accumulate more if you don't spend (I actually sorta doubt it, but let's assume it for argument's sake). Then, if you live by "the less you spend, the more money you'll have" you'll basically end up having a "big number" on your bank account, but nothing of what you really want. I'd rather have a super fast laptop and a nice clean apartment, and only $8000 in my account[1], than a crappy laptop and a crappy apartment and $50,000 in my bank account. [1] assuming I have a steady income, and/or can generate enough revenue so that I can keep getting nice things without draining my bank account. I said that I doubt the correctness of the logic behind "the less you spend the more you'll have". I think that to generate wealth, you need to spend some amount of investment upfront, and if you're afraid to "pay" for things, (because it reduces the "number" in your account) then it follows that you don't have the courage to invest in anything, and therefore you are not likely to become rich.

Bostwick 16y ago
<i>The whole point of accumulating money is to spend it. Sure, you can accumulate more if you don't spend (I actually sorta doubt it, but let's assume it for argument's sake).</i> I disagree. Once you've learned the basics of investing or stock trading, accumulating capital becomes about increasing your income. Let's look at your laptop & apartment example. Case 1: Super fast laptop & nice clean apartment. I can max out a Macbook Pro for about three grand, and a nice 2br apartment in Boston will cost about $3k per month in rent. With your $8,000 bank account, you'll need to earn at least $3,000 per month from your job just to pay for your apartment. More to save up and purchase that laptop, and even more still if you want to afford to eat. Case 2: Crappy laptop and crappy apartment with $50k. A crappy laptop is about $500 for a really nice netbook, and a cheap apartment in Boston is about $600 per month (for those in Boston, think JP and Forest Hills). Let's invest that $50k in an ETF called "PFF", which currently costs $40 per share and pays a monthly dividend of, on average, .20c per share. That gives you 1250 shares of PFF, for an average monthly income of $250. With $50k, you can buy a $1000 laptop in four months, or pay for almost half your monthly rent. On a forum where people are constantly trying to generate passive income through webapps and side businesses, I'm surprised people continuously overlook the passive income power of large amounts of capital. $50k can buy you $250 a month for life.
- hasenj 16y ago
  You didn't understand my point. In case 2, the hypothetical person who has all this money but is hesitant to spend any portion of it on a decent laptop is probably scared of the concept of the "number" in his bank account dropping. This hypothetical person would not invest in stock. If you invest in stock, then you sorta already agree with me. I mean, you are spending your money, and that's my whole point: if you're afraid to spend money then you're not likely to become rich. And in Case 1, the hypothetical person already has a means of generating enough revenue so that he can continue to spend/invest without going broke.

by hasenj 16y ago

Bostwick 16y ago

<i>The whole point of accumulating money is to spend it. Sure, you can accumulate more if you don't spend (I actually sorta doubt it, but let's assume it for argument's sake).</i> I disagree. Once you've learned the basics of investing or stock trading, accumulating capital becomes about increasing your income. Let's look at your laptop & apartment example. Case 1: Super fast laptop & nice clean apartment. I can max out a Macbook Pro for about three grand, and a nice 2br apartment in Boston will cost about $3k per month in rent. With your $8,000 bank account, you'll need to earn at least $3,000 per month from your job just to pay for your apartment. More to save up and purchase that laptop, and even more still if you want to afford to eat. Case 2: Crappy laptop and crappy apartment with $50k. A crappy laptop is about $500 for a really nice netbook, and a cheap apartment in Boston is about $600 per month (for those in Boston, think JP and Forest Hills). Let's invest that $50k in an ETF called "PFF", which currently costs $40 per share and pays a monthly dividend of, on average, .20c per share. That gives you 1250 shares of PFF, for an average monthly income of $250. With $50k, you can buy a $1000 laptop in four months, or pay for almost half your monthly rent. On a forum where people are constantly trying to generate passive income through webapps and side businesses, I'm surprised people continuously overlook the passive income power of large amounts of capital. $50k can buy you $250 a month for life.

hasenj 16y ago
You didn't understand my point. In case 2, the hypothetical person who has all this money but is hesitant to spend any portion of it on a decent laptop is probably scared of the concept of the "number" in his bank account dropping. This hypothetical person would not invest in stock. If you invest in stock, then you sorta already agree with me. I mean, you are spending your money, and that's my whole point: if you're afraid to spend money then you're not likely to become rich. And in Case 1, the hypothetical person already has a means of generating enough revenue so that he can continue to spend/invest without going broke.