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There's a saying, it goes like this: "its expensive being poor", and its really the truth. If you don't have enough money to buy in bulk, you end up paying way

There's a saying, it goes like this: "its expensive being poor", and its really the truth. If you don't have enough money to buy in bulk, you end up paying way more for the smaller amount of product. If you can't afford to spend time on something because you have a limited number of calories before you become unproductive, and therefore have to work on aquiring more calories, then you're stuck in a feedback loop of no progress. And so it goes. This is why the truly rich (not necessarily wealthy) find pleasure in lifes' simple, cheap, offerings. It's almost impossible to find vegetables as good as the ones we grow in our home garden, but yet it takes on average 30 minutes of work every day to keep things in order .. finding that balance is what is key to moving from being poor to rich, in my opinion. The time not spent getting in the car to go grocery shopping is instead spent maintaining a well-ordered garden plot ..

judk 12y ago
Not really true. Buying in bulk is a minor savings that offsets the cost if a big car or big house or whatever. The core issue is that life has transaction costs on that the wealthier folks don't need to worry about, but a poor person faces catastrophic collapse by going over budget with no way to borrow against the future.
- JASchilz 12y ago
  Could you give a few examples of these transaction costs?
  - OrwellianChild 12y ago
    A simple example is the concept of living paycheck to paycheck... If you work on contract or hourly and payment is delayed (either because there weren't enough hours to work or your client is slow to pay), one of two things happens: 1) You are wealthy enough to have credit and perhaps a bit of cash savings, and you can pay your bills with that savings/credit card. When your paycheck comes, you pay down the short-term credit and you are as good as if it never happens. 2) You have no credit and no savings. You must directly choose between which bills you can and cannot pay. Some bills go into default or incur late fees. Other bills may cancel service because you cannot be relied upon to pay. In this scenario, when the paycheck comes, you pay your late bills, but you are left with the extra fees, lost services, and are at a net-loss going into the next period. Compound scenario 2 for a few periods, and you start to incur heavily negative consequences that are very difficult to overcome.
  - chc 12y ago
    I'm not judk, but a few obvious examples: - Medical bills - Rent hikes - Being between jobs - Repairing things that break (e.g. "My car needs $300 in maintenance" is a big deal when you were just barely going to break even on the month and have no savings) - Random expenses for kids' school None of these things are necessarily all that pricy, but when your minimal cost of living is equal to or only slightly less than you make, you have a problem. The worst part is that it accumulates. As these non-negotiable costs arise, you end up making compromises (e.g. taking out credit you're not sure you can repay soon), and those compromises make it harder to handle unexpected costs in the future (e.g. because you're still paying off interest on the last one). The thing about being rich or poor isn't about how much money you have, per se. It's about how much money you have that you don't really need right now. Quality of life is pretty crap up to a certain point, then it rises quickly once you get past the point of treading water, then it tapers off somewhat later because at that point it's all basically "I do not have to worry about basic needs."
    - AnimalMuppet 12y ago
      I watched a guy who had just gotten out of prison trying to make it back into society. A lot of things cost more for him. One example: Car insurance. He didn't have the money to pay 6 months of insurance in one chunk, so he had to buy it one month at a time. Well, the insurance companies charge extra for that. He couldn't afford a decent car, so he got a car that was cheap, and which (no surprise) broke down a lot. When it broke down, he had to pay to have it fixed, plus to take the bus to get to work. And so on.
aturek 12y ago
There's a great quote from a Terry Pratchett Discworld novel: "The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness."
- SilasX 12y ago
  That quote always bothers me, because most long-term savings like that aren't nearly so clear in numerical terms.
  - sliverstorm 12y ago
    You agree with the conclusion but are upset that an example which has been simplified to make a point isn't as nebulous as real life?
    - SilasX 12y ago
      You're right -- if that were the issue, it would be a bad objection; let me try again. The problem is that in real life, most such cases (of buying the more expensive item) don't result in a pure savings, but rather, leave you better off in some ways and worse off in others. The cheaper shoes, IOW, will not actually be so bad that you have to replace them entirely, and you will in fact end up with with more liquid savings. The temporary discomfort and greater savings are much harder to compare to the alternative than the example suggests, so wealthier people do not always have some obvious choice that leaves them better off in every way. So, on top of that, it's not an issue that is fixable simply by pointing this out to the poorer person and loaning them the money.
prawn 12y ago
I agree that shopping can be a trap. If you don't have money to do a big, occasional shop for food/etc, you'll likely make a series of smaller trips to a supermarket, buying few things but still losing time, fuel and maintenance on each drive of your car, for example. Lose time and you're under more pressure elsewhere in life.

judk 12y ago

Not really true. Buying in bulk is a minor savings that offsets the cost if a big car or big house or whatever. The core issue is that life has transaction costs on that the wealthier folks don't need to worry about, but a poor person faces catastrophic collapse by going over budget with no way to borrow against the future.

JASchilz 12y ago
Could you give a few examples of these transaction costs?
- OrwellianChild 12y ago
  A simple example is the concept of living paycheck to paycheck... If you work on contract or hourly and payment is delayed (either because there weren't enough hours to work or your client is slow to pay), one of two things happens: 1) You are wealthy enough to have credit and perhaps a bit of cash savings, and you can pay your bills with that savings/credit card. When your paycheck comes, you pay down the short-term credit and you are as good as if it never happens. 2) You have no credit and no savings. You must directly choose between which bills you can and cannot pay. Some bills go into default or incur late fees. Other bills may cancel service because you cannot be relied upon to pay. In this scenario, when the paycheck comes, you pay your late bills, but you are left with the extra fees, lost services, and are at a net-loss going into the next period. Compound scenario 2 for a few periods, and you start to incur heavily negative consequences that are very difficult to overcome.
- chc 12y ago
  I'm not judk, but a few obvious examples: - Medical bills - Rent hikes - Being between jobs - Repairing things that break (e.g. "My car needs $300 in maintenance" is a big deal when you were just barely going to break even on the month and have no savings) - Random expenses for kids' school None of these things are necessarily all that pricy, but when your minimal cost of living is equal to or only slightly less than you make, you have a problem. The worst part is that it accumulates. As these non-negotiable costs arise, you end up making compromises (e.g. taking out credit you're not sure you can repay soon), and those compromises make it harder to handle unexpected costs in the future (e.g. because you're still paying off interest on the last one). The thing about being rich or poor isn't about how much money you have, per se. It's about how much money you have that you don't really need right now. Quality of life is pretty crap up to a certain point, then it rises quickly once you get past the point of treading water, then it tapers off somewhat later because at that point it's all basically "I do not have to worry about basic needs."
  - AnimalMuppet 12y ago
    I watched a guy who had just gotten out of prison trying to make it back into society. A lot of things cost more for him. One example: Car insurance. He didn't have the money to pay 6 months of insurance in one chunk, so he had to buy it one month at a time. Well, the insurance companies charge extra for that. He couldn't afford a decent car, so he got a car that was cheap, and which (no surprise) broke down a lot. When it broke down, he had to pay to have it fixed, plus to take the bus to get to work. And so on.

aturek 12y ago

There's a great quote from a Terry Pratchett Discworld novel: "The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet. This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness."

SilasX 12y ago
That quote always bothers me, because most long-term savings like that aren't nearly so clear in numerical terms.
- sliverstorm 12y ago
  You agree with the conclusion but are upset that an example which has been simplified to make a point isn't as nebulous as real life?
  - SilasX 12y ago
    You're right -- if that were the issue, it would be a bad objection; let me try again. The problem is that in real life, most such cases (of buying the more expensive item) don't result in a pure savings, but rather, leave you better off in some ways and worse off in others. The cheaper shoes, IOW, will not actually be so bad that you have to replace them entirely, and you will in fact end up with with more liquid savings. The temporary discomfort and greater savings are much harder to compare to the alternative than the example suggests, so wealthier people do not always have some obvious choice that leaves them better off in every way. So, on top of that, it's not an issue that is fixable simply by pointing this out to the poorer person and loaning them the money.

prawn 12y ago

I agree that shopping can be a trap. If you don't have money to do a big, occasional shop for food/etc, you'll likely make a series of smaller trips to a supermarket, buying few things but still losing time, fuel and maintenance on each drive of your car, for example. Lose time and you're under more pressure elsewhere in life.