3 ms·

Technically yes, but the key difference is that those index funds are equally available to rich and poor, and the returns are the same for everyone (mostly). C

by mLuby 7y ago

Technically yes, but the key difference is that those index funds are equally available to rich and poor, and the returns are the same for everyone (mostly). Contrast that with the plethora of wealth-increasing opportunities that are not available without a large initial investment or the connections or power that comes with existing wealth.

tasty_freeze 7y ago
Your claim is the flip side to the joke that goes something like, "The law is blind to class: it is equally illegal for a rich man to sleep under a bridge as it is for the poor man." The point being: a large fraction of the population in the US is living paycheck to paycheck and has no money to spare for investing in an index fund.
- umvi 7y ago
  And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto (at least my pack-a-day neighbors do). $3k per year in an index fund is certainly not insignificant.
  - gruez 7y ago
    >And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto being poor impairs your cognition[1], so it's not surprising that they are wasting money on stuff like that. [1] random google result: https://www.scientificamerican.com/article/how-poverty-affects-the-brain/ https://www.scientificamerican.com/article/how-poverty-affec...
    - logicprog 7y ago
      I'd imagine that the people they studied in Bangladesh in that article are a lot more poor than basically anyone in the US, especially people with $3k to spare on anything. And if you were to find evidence of poorer people having impaired decision-making skills in the US (and there might be evidence of that), the question becomes, are they as poor as they are because of that poor decision making?
ChrisSD 7y ago
They are technically available to the poor but in practice many people can't afford to tie up their money for long periods. If they're forced to take their money out of the fund due to their circumstances, then they could actually lose a lot of it (an economic downturn makes both situations more likely to occur at the same time). Whereas someone who is well off only loses money on paper and can afford to hold on to their investment until the economy improves. In short, index funds are a bad investment unless you're well off enough that you won't need the money invested. At least not for a long time.
- mLuby 7y ago
  Thanks, that is a great counterpoint. I'll reconsider my position.

by mLuby 7y ago

tasty_freeze 7y ago

Your claim is the flip side to the joke that goes something like, "The law is blind to class: it is equally illegal for a rich man to sleep under a bridge as it is for the poor man." The point being: a large fraction of the population in the US is living paycheck to paycheck and has no money to spare for investing in an index fund.

umvi 7y ago
And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto (at least my pack-a-day neighbors do). $3k per year in an index fund is certainly not insignificant.
- gruez 7y ago
  >And yet many blow at least $3000+ per year on worthless consumables like cigarettes and lotto being poor impairs your cognition[1], so it's not surprising that they are wasting money on stuff like that. [1] random google result: https://www.scientificamerican.com/article/how-poverty-affects-the-brain/ https://www.scientificamerican.com/article/how-poverty-affec...
  - logicprog 7y ago
    I'd imagine that the people they studied in Bangladesh in that article are a lot more poor than basically anyone in the US, especially people with $3k to spare on anything. And if you were to find evidence of poorer people having impaired decision-making skills in the US (and there might be evidence of that), the question becomes, are they as poor as they are because of that poor decision making?

ChrisSD 7y ago

They are technically available to the poor but in practice many people can't afford to tie up their money for long periods. If they're forced to take their money out of the fund due to their circumstances, then they could actually lose a lot of it (an economic downturn makes both situations more likely to occur at the same time). Whereas someone who is well off only loses money on paper and can afford to hold on to their investment until the economy improves. In short, index funds are a bad investment unless you're well off enough that you won't need the money invested. At least not for a long time.

mLuby 7y ago
Thanks, that is a great counterpoint. I'll reconsider my position.