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A comment on Cratering motor fuel sales in Norway show the death spiral that can end oil. Parent comment

Re:Cratering motor fuel sales in Norway show the death spira... by ben_w on Saturday October 21, 2023 @12:09PM (#37968017)
"""The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money. Take boots, for example. ... 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 a 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.""" - https://en.wikipedia.org/wiki/Boots_theory
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Re:Cratering motor fuel sales in Norway show the death spira... by jncfhnb on Saturday October 21, 2023 @12:14PM (#37968054)
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.
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Re:Cratering motor fuel sales in Norway show the death spira... by candiddevmike on Saturday October 21, 2023 @12:21PM (#37968138)
I think the OP demonstrates the compounding effects of wealth, just not in a direct money-creates-money way.
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Re:Cratering motor fuel sales in Norway show the death spira... by jncfhnb on Saturday October 21, 2023 @12:24PM (#37968171)
Shrug. It’s a tiny drop in the bucket.
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Re:Cratering motor fuel sales in Norway show the death spira... by ben_w on Saturday October 21, 2023 @12:29PM (#37968221)
When you're rich, it is.

When you're poor, you can't afford the bucket.

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Re:Cratering motor fuel sales in Norway show the death spira... by jncfhnb on Saturday October 21, 2023 @02:46PM (#37969462)
Having the drop in the bucket is not, however, a path to being rich.
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Re:Cratering motor fuel sales in Norway show the death spira... by ben_w on Saturday October 21, 2023 @03:37PM (#37969887)
It is when your standard for "rich" is framed in terms of "can afford to buy good boots".
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Re:Cratering motor fuel sales in Norway show the death spira... by jncfhnb on Saturday October 21, 2023 @08:22PM (#37971745)
Which is not the definition implied by the original quote so great. We agree.
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Re:Cratering motor fuel sales in Norway show the death spira... by ben_w on Sunday October 22, 2023 @04:58AM (#37973885)
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.
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Re:Cratering motor fuel sales in Norway show the death spira... by jncfhnb on Sunday October 22, 2023 @10:27AM (#37975672)
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

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Re:Cratering motor fuel sales in Norway show the death spira... by throw0101c on Saturday October 21, 2023 @12:56PM (#37968488)
> 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-fin...

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Re:Cratering motor fuel sales in Norway show the death spira... by jncfhnb on Saturday October 21, 2023 @02:45PM (#37969455)
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.

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