2 ms·
(author here) One of the main points of Mag World is that different orders of magnitude are qualitatively different. Yes, of course, with more assets you can
by saulpw 11mo ago
(author here)
One of the main points of Mag World is that different orders of magnitude are qualitatively different. Yes, of course, with more assets you can get more credit. But the types of credit are so different as to be incomparable. At ^2 wealth, without greater wealth around you, you probably can only get a usurious payday loan. At ^5 wealth you can take out a HELOC against property you hold title to. At ^10 wealth, a person can apparently buy and control a social media platform, without even "spending" any of their own money!
As they say, quantity has a quality all of its own.
- terminalshort 11mo agoThe problem with this analysis is that at the lower levels the relationship breaks down completely. There is a large cohort with a zero or negative net worth that also has plenty of income, and therefore credit access. e.g. I have a family member who is ↑-5 Wealth by your scale who just bought a $700K house earlier this year.
- theurerjohn3 11mo agoby my reading that is the authors point? if they are capable of getting a 700k loan, that makes them ↑5, regardless of their income or assets.
- tavavex 11mo agoAt the very beginning of the article, the author immediately states that they're not using raw net worth (and explains why they chose to do so). The actual metric is > the amount of money someone could bring to bear on a problem if they had to. If someone they loved fell deathly ill, but the treatment would cost some large amount of money, how much could they pull together in a month or two?