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> and any consumption->investment switch is good Not always: It is possible to over-invest and under-consume. Don't forget that the purpose of investment in th
by nybble41 4y ago
> and any consumption->investment switch is good
Not always: It is possible to over-invest and under-consume. Don't forget that the purpose of investment in the present is to enable consumption in the future. In the extreme case, a society which only invested and never consumed would starve to death. There is a natural balance point, and moving away from that point in either direction results in a less efficient allocation of resources.
- chii 4y ago> It is possible to over-invest and under-consume. certainly is, but i would argue that more people under-invest and over-consume! I would also argue that the minimal amount of consumption (let's say, you keep yourself alive, just barely), and maximizing your investment amount, is the best outcome for your future, and is the most efficient allocation of resources.
- nybble41 4y ago> I would also argue that the minimal amount of consumption (let's say, you keep yourself alive, just barely), and maximizing your investment amount, is the best outcome for your future, and is the most efficient allocation of resources. If you always prioritize your future over your present then your sacrifices are wasted—you live your entire life just barely keeping yourself alive and never claim any of the proceeds from your investments for yourself. As I said before, there needs to be a balance. Investment is pointless and wasteful without a plan to eventually consume more than you could have without investing.