I don't think danhak compared 2 people.
Anyway, if I started with 100k dollars and you started with 1M dollars (a 900k difference) and we both grew 50%, now I have 150k and you have 1.5M - a 1.35M difference. Still 9x, but way more $.
> It scales linearly.
> If you have 3 (or 10) times as much as I have, and we both invest all our money in the same interest bearing account, then after N years you will still have 3 (or 10) times as much as I have.
Right, it's linear relative to other interest bearing accounts, but GP's point was that existing wealth of an individual grows exponentially.
Sure, it may not completely be a corollary of compound interest, but the fact that there are people that can live entirely off of the passive income generated by their assets and have some left over to invest further illustrates that the game is fundamentally different at higher levels of wealth.
Re:Is Inequality Inevitable?
by the_gastropod on Wednesday November 06, 2019 @03:33PM
(#21466897)
Why are we ignoring the consumption factor? That's a very natural part of the wealth accumulation game.
If you have 3 (or 10) times as much as I have, and we both invest all our money in the same interest bearing account, then after N years you will still have 3 (or 10) times as much as I have.
So, according to your model, the initial wealth distribution should not change. (Of course, you can argue that those with more wealth consume a smaller part of it, and that gives rise to inequality, but that's an issue beyond "compound interest").
EDIT to remove a typo