
Wealth is what you don't spend - tonyedgecombe
https://www.collaborativefund.com/blog/gains/
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jchw
This is really disingenuous because inflation is not telling the full story of
why people spend more. Living _costs_ more. Healthcare has outpaced inflation
blisteringly, and employers provide for it less. IIRC a typical child birth
can cost $10,000 in medical bills. How long does that take to save up on
$60k/year with a mortgage and a car payment?

Don’t get me wrong, I don’t feel like I’m having a hard time in life at all. I
feel like I am compensated fairly and I am able to save money while having
fun. But while I am living well now, I grew up in a family where nothing was
guaranteed. We’d been homeless at a time. That was with dual income.

A household income of $60k just does not budget well today. Period. Comparing
this to obesity is, again, imo pretty disingenuous because the _reality_ of
obesity is that the exercise helps very little _at all_. Exercise without diet
does almost absolutely nothing. Diet without exercise however can work just
fine.

At the end of the day every analogy has limits but I think this doesn’t pass
the smell test.

~~~
ben_w
> IIRC a typical child birth can cost $10,000 in medical bills.

Assertions like this — there’sa similar one about hip replacements being more
expensive in the USA than flying to Spain for the op and living there for two
years — always make me wonder why health tourism from the USA to basically
anywhere else isn’t more common.

~~~
scarejunba
There's a pricing/information problem. Say you hear that the hip replacement
is $10k in the US and $2k in India. But there's also a place that's $1.5k in
India and a place that's $2.5k in India. Which place is good? You haven't a
clue. Do you take the risk? Are you going to end up with a hip that lasts
shorter than you want it to? That'll be bad for you.

And then comes the fact that insurance pays for most people so the price is
hidden. You don't actually pay $10k. Instead everyone pays slightly more than
they should for insurance.

~~~
cpuguy83
Except you do actually pay that $10k, just in the form of money taken out of
your pay check to pay for insurance. Insurance which you are likely not
wanting to take advantage of because even with insurance you pay out of pocket
(albeit subsidized by insurance).

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coder1001
Love this summary point: "Money is often a negative art. It has a lot to do
with the actions you don’t take and things you avoid."

Applies to a lot of areas in life and business, not just money!

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jmknoll
Totally unrelated to the topic, but I really like this style of
writing/speaking, where you open with a story that serves as an extended
analogy on a familiar topic, and then dive into the (usually more complex)
actual topic.

Does anyone have any tips on how to do this effectively? Any time I try the
story portion ends up feeling overly drawn-out or irrelevant.

~~~
bonestamp2
1\. Start with a bullet list of the points you absolutely have to make (the
meat).

2\. Make a second level to the bullet list where you fill in the gaps between
the meat where you can add color and make the topic digestible (the
vegetables/fiber).

3\. Make a third level of the bullet list with all of the nice story points
you'd like to add but are not necessary (the dessert).

4\. Delete all those nice to have story points. If they're really needed, then
they would have been added in step 1 or 2.

Don't add any more words for dessert -- the real treat is how concise you can
be while still being interesting. If it's a long form article, skip step 4.

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tempsy
The collective level of risk aversion on HN is ironic given the focus on
startups, new age tech, and venture capital. Mention any investment vehicle
that isn't a high interest savings account accruing 2% and you get downvoted
into oblivion.

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danans
> Hand-me-downs were acceptable clothes. A 983 square foot house was an
> acceptable size. Kids sharing a room was an acceptable arrangement. A tire
> swing was acceptable entertainment. Few of those things are acceptable
> baselines for most households today.

Hand-me-downs, room sharing, tire swing (or sidewalk games in our case), these
are all features of my family's life now (as a fairly typical dual-
professional household). My house is 1500 square feet, more than the typical
for the 1950s, but the big difference is what that 1500 square feet cost to
purchase and costs to maintain today.

> The average new home now has more bathrooms than occupants.

Most of the population lives in existing homes, not new homes. Housing cost
these days is far more directly correlated to land value, which is itself
correlated to location and access to "public" amenities like safety, transit
corridors, "good" schools, job opportunities etc.

I'd wager that most people are actually getting by using many of the same
strategies employed in the 1950s, and that people chased status by spending
just as much back then as today, but that the game has changed dramatically
due to a number of secular changes in the economy. These include effects of
technology and automation, and globalization, which while they have increased
the size of the global pie, have also reduced labor's (AKA most people) share
of that pie.

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scarejunba
The truth is that post-war America was blessed by ridiculous growth for that
half-century across all industries. That's not going to happen again. We have
true global trade now and labour is fungible.

Reality is different now, guys. There's competition. And they're fucking good
at what they do.

~~~
tehjoker
Alternatively, we can look to our fellow workers overseas and realize we have
a common interest to not be exploited. We can work together towards a new
system where we do not allow the free movement of capital to mercilessly
exploit workers.

~~~
scarejunba
It's been 172 years since the workers of the world were asked to unite.
They've realized in the intervening period that not only does the roofer in
North Carolina share less in common with the road layer in the Philippines
than the roofer business owner in NC but also he doesn't want to share more.

I, for one, don't care to shore up the race to the bottom. It's a physical
law. I'm just going to aim to be wealthy enough that I'm not at the bottom.
That will do.

Systems that require "if we all do this, it'll work" will not work and life
being limited, I'm going to optimize elsewhere.

~~~
tehjoker
This is really sad and defeatist. It's not a physical law, but we will be
reduced to serfs if this continues. The people of the Philippines are bravely
fighting, including in armed conflict against the Duterte regime and have
forced some concessions.

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0xff00ffee
Quick question:

How much do you spend each year?

Follow up:

How much is discretionary and could be cut?

In my experience very few people can answer that, regardless of whether they
are rich or poor.

The fact that I have friends--grown adults!--who don't know how much money the
spend each month or year... is just astonishing!

No wonder the author came to their conclusions.

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JMTQp8lwXL
The comparison between food/exercise and income/expenses is analogous, but not
equally challenging. It's easy to make $250k a year and only spend $50k
because the diminishing return of spending money-- a single person can live a
reasonably decent life on $50k. Compare this to earning $60k, spending the
same amount, but spending less. Exercising completely wipes the diminishing
return of food, albeit temporarily. Food tastes better and you are hungrier
after a workout. It is easier to exercise financial constraint than dietary
constraint.

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acd
You could also say Wealth is the value you build for others. If you build a
lot of value for others you get very wealthy. That does not mean you saved
money, you invested money to build value for others.

~~~
jjoonathan
It's very important to note that in this context the notion of "value" is
weighted according to wealth. Feeding a starving kid creates zero "value"
because the kid has no money. Owning a house in an area where other people are
doing great things creates loads of "value," because those other people _do_
have money.

Wealth is the value you build for wealth-weighted-people, not the value you
build for people.

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RickJWagner
Once people do start saving and investing, a similar truism applies:

"You get what you don't pay for."

Jack Bogle popularized this statement. It means in investing, small
differences in expenses make a huge difference over time. You get what you
don't pay for.

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WalterBright
Income and wealth is like speed and distance. It's not hard to have high
income with no wealth, and no income with high wealth.

Unfortunately, a lot of people conflate income with wealth.

~~~
sombremesa
You'd have to be really trying, in order to have no income with high wealth.
You'd have to purposefully not lease your properties and try and keep all your
money somewhere you can't make interest and also refuse to invest in even the
most risk averse prospects.

~~~
jandrewrogers
It is trivial to profitably invest wealth while producing no income: invest in
companies that don't issue dividends, whether public or private. You can
achieve excellent investment returns solely on appreciation.

I know more than a few people with excellent investment returns and quite a
bit of wealth that realize almost zero income from that wealth in a typical
year. It is a common strategy, particularly if you do not _need_ the wealth to
produce income.

~~~
aidenn0
I think the person you are replying to considers investment gains to be income
(as do I). It's unrealized income, but income nevertheless.

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sabujp
exercise should increase metabolism, but yes the problem is you still have to
eat less or at least the same as you did when you didn't exercise, and when
you don't exercise you should eat even less then when you normally do

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Ma8ee
In 1955 the family income was usually only one salary. On the other hand you
had a person full time cooking from raw ingredients, taking care of children
and mending your clothes. So you didn’t pay for eating out, daycare, or buying
new clothes all the time.

~~~
harryh
Real Median Personal (not household!) income is also up significantly:

[https://fred.stlouisfed.org/series/MEPAINUSA672N](https://fred.stlouisfed.org/series/MEPAINUSA672N)

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sunstone
That would be the accountant's perspective.

