3 ms·

This effect is true but the thesis is dumb. The rich are rich because of the compounding effects of wealth. Not that small fraction spent on durable goods.

candiddevmike 3y ago
I think the OP demonstrates the compounding effects of wealth, just not in a direct money-creates-money way.
- jncfhnb 3y ago
  Shrug. It’s a tiny drop in the bucket.
  - ben_w 3y ago
    When you're rich, it is. When you're poor, you can't afford the bucket.
    - jncfhnb 3y ago
      Having the drop in the bucket is not, however, a path to being rich.
      - ben_w 3y ago
        It is when your standard for "rich" is framed in terms of "can afford to buy good boots".
        jncfhnb 3y ago
        Which is not the definition implied by the original quote so great. We agree.
        ben_w 3y ago
        What are you even talking about? This is literally called "boots theory" and is explicitly giving boots as an example. That's what "framing in terms of" means.
        jncfhnb 3y ago
        If you read the discussion, the quote responded to included the claim > The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Which is a dumb claim. As you’ll note, I said that the general effect was true but this claim was wrong. You appear to be arguing something tangential
throw0101c 3y ago
> The rich are rich because of the compounding effects of wealth. Not that small fraction spent on durable goods. The less you (have to) spend on goods and services the more you can keep invested to compound. If 100% (or more) of your income is taken up by paying for necessities (shelter, food, transportation), what do you have to compound? * https://ofdollarsanddata.com/the-biggest-lie-in-personal-finance/ https://ofdollarsanddata.com/the-biggest-lie-in-personal-fin...
- jncfhnb 3y ago
  No, this is the misleading thing. Which your article is largely agreeing with me on. The compounding effect of wealth scales with the amount of wealth you have more than the incremental savings you’re likely to earn. Trimming your expenses won’t make a difference. If you have no wealth and low income then the compounding is irrelevant. Even if your income is high it’s very hard to acquire “wealth”. Poor folks will be poor even if you chop their expenses by half.

candiddevmike 3y ago

I think the OP demonstrates the compounding effects of wealth, just not in a direct money-creates-money way.

jncfhnb 3y ago
Shrug. It’s a tiny drop in the bucket.
- ben_w 3y ago
  When you're rich, it is. When you're poor, you can't afford the bucket.
  - jncfhnb 3y ago
    Having the drop in the bucket is not, however, a path to being rich.
    - ben_w 3y ago
      It is when your standard for "rich" is framed in terms of "can afford to buy good boots".
      - jncfhnb 3y ago
        Which is not the definition implied by the original quote so great. We agree.
        ben_w 3y ago
        What are you even talking about? This is literally called "boots theory" and is explicitly giving boots as an example. That's what "framing in terms of" means.
        jncfhnb 3y ago
        If you read the discussion, the quote responded to included the claim > The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Which is a dumb claim. As you’ll note, I said that the general effect was true but this claim was wrong. You appear to be arguing something tangential

throw0101c 3y ago

> The rich are rich because of the compounding effects of wealth. Not that small fraction spent on durable goods. The less you (have to) spend on goods and services the more you can keep invested to compound. If 100% (or more) of your income is taken up by paying for necessities (shelter, food, transportation), what do you have to compound? * https://ofdollarsanddata.com/the-biggest-lie-in-personal-finance/ https://ofdollarsanddata.com/the-biggest-lie-in-personal-fin...

jncfhnb 3y ago
No, this is the misleading thing. Which your article is largely agreeing with me on. The compounding effect of wealth scales with the amount of wealth you have more than the incremental savings you’re likely to earn. Trimming your expenses won’t make a difference. If you have no wealth and low income then the compounding is irrelevant. Even if your income is high it’s very hard to acquire “wealth”. Poor folks will be poor even if you chop their expenses by half.