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News & Politics News & Politics

"You cannot multiply wealth by dividing it."

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This is a spin-off from gsprofval's post: 5 Truths You CANNOT Disagaree With

in which 'truth' #4 is:

You cannot multiply wealth by dividing it.

If you have $100 then it makes no difference whether you keep it in a single account, or if instead you divide it, so you have $50 in one account and $50 in a second account.

If we now allow time to pass, and the interest rates on the accounts varies depending on how much is in the account, (for example, if you earn 5% on balances over $80, but only 2% on balances under $80), then it will make a difference.  However, as long as the interest rate is positive (and above the rate of inflation), your wealth will still be multiplying, even if you have divided it.

A better example than dividing it between different bank accounts in the same bank is moving half to a different bank, or putting half into the stock market.   If you do this correctly, you can get a higher return for the same level of risk (or a similar return, but for a lower level of risk).  Dividing wealth is often the sensible prudent thing to do.

On a different level, the same thing happens in families.   You could give all the wealth to the person you think it best at investing, but in the long run using that strategy it only takes one mistake and the entire dynasty's wealth is squandered.  A safer route is to divide the wealth among different family members, letting each increase the part of the pool they are responsible for, as best they can.  Some will fail, and some will do fantastically; and if you don't have a family full of fools, when it comes to divide things out among the next generation, the total wealth of the dynasty will have increased.

We can take this reasoning a step further.  It doesn't make sense, on a national level, to leave 80% of the country's wealth in the hands of only 20% of the population.  You'll get a better rate of return by spreading things out sufficiently for most people to stop living hand-to-mouth, buying things that are cheap rather than things that are efficient.

NOTE 1:

A $10 pair of shoes that lasts 1 year is cheaper than a $20 pair of shoes that last 5 years, but the latter is a more efficient use of money.

NOTE 2:

I made up the 20%:80% figure, because I can't remember the correct numbers off hand.

by on Feb. 8, 2013 at 3:33 PM
Replies (91-92):
stacymomof2
by Bronze Member on Feb. 10, 2013 at 11:12 PM

Oh I know.  You are the only one who ever worked for anything you have.  lol

Quoting Farmlady09:

And you just go on making up whatever little story about how my live has been so that you can justify your excuses for people who won't lift a finger to help themselves. 'What society has given me' my arse lol.

There is no difference between myself and others ~ except that I AM willing to work two and/or three jobs and get my fingers a little dirty if it means the difference between feeding my own children or expecting others to do so for me. Oh ... and I don't accept excuses for laziness.


Quoting stacymomof2:

Yeah ok.  If you are so adept at growing plants you should certainly know that isn't possible for everyone.  lol the last second floor no balcony apartment I lived it didn't have room for a bed much less  10 tomato plants.  There was no light there, either.  But hey, keep living in your utopian luddite fantasy, while taking the advantages of what society has given you.

The rest of what you say is just more negative generalizations.  It doesn't make you look better than everyone else.  It just makes you look myopic.

Quoting Farmlady09:

Gee, I don't know ~ but I managed, in a second floor apartment with no balcony, to grow enough tomatoes to do 95 quarts of spag and tomato sauce, 25 pints of salsa, lettuce, baby carrots, radishes, and spinach for salads, as well as strawberries and herbs.

What I find offensive is the sheer number of human beings alive on this planet today who if it weren't for public assistance and/or massive aid to their countries that would die from natural selection. What I find offensive are the number of self-proclaimed mothers who have three times as many excuses (and considering how many children some of them have that actually takes some thought and imagination on their part) as the number of children they gave birth to as to why they can't feed them or take care of them. You can be offended all you like, but I'd put good money down that I'm far more offended by the rest of my species than you are at me. I have animals that aren't so incompetent and pathetic at rearing their offsping (as 'single' parents, without childcare, a vehicle, etc.). I have several species that manage to rear several batches of babies to adulthood each year.

I don't want to know the actual amount of cash that has been poured into welfare since it's inception ... even a healthy heart can only take so much before it just explodes ... but it's patently obvious that NO nation can end poverty by trying to buy it. All the sob stories and hard luck tales are still there.

Taking money from people who earn it to give it to those who won't doesn't give them a bit of incentive to get off their butts and start earning their own. All it does is teach them to sit around and wait for the next installment ... much like they sit and wait for the next epidode of all their favorite tv shows.

The one thing that it will never do is to increase the wealth of anyone. Cripes, did half the people in this country take some twisted, reverse math class?



Farmlady09
by Silver Member on Feb. 10, 2013 at 11:26 PM

 Hardly ~ but I seem to be one of the few around this forum that actually considers working for what you want to be an asset ... or even worthwhile.


Quoting stacymomof2:

Oh I know.  You are the only one who ever worked for anything you have.  lol

Quoting Farmlady09:

And you just go on making up whatever little story about how my live has been so that you can justify your excuses for people who won't lift a finger to help themselves. 'What society has given me' my arse lol.

There is no difference between myself and others ~ except that I AM willing to work two and/or three jobs and get my fingers a little dirty if it means the difference between feeding my own children or expecting others to do so for me. Oh ... and I don't accept excuses for laziness.

 

Quoting stacymomof2:

Yeah ok.  If you are so adept at growing plants you should certainly know that isn't possible for everyone.  lol the last second floor no balcony apartment I lived it didn't have room for a bed much less  10 tomato plants.  There was no light there, either.  But hey, keep living in your utopian luddite fantasy, while taking the advantages of what society has given you.

The rest of what you say is just more negative generalizations.  It doesn't make you look better than everyone else.  It just makes you look myopic.

Quoting Farmlady09:

Gee, I don't know ~ but I managed, in a second floor apartment with no balcony, to grow enough tomatoes to do 95 quarts of spag and tomato sauce, 25 pints of salsa, lettuce, baby carrots, radishes, and spinach for salads, as well as strawberries and herbs.

What I find offensive is the sheer number of human beings alive on this planet today who if it weren't for public assistance and/or massive aid to their countries that would die from natural selection. What I find offensive are the number of self-proclaimed mothers who have three times as many excuses (and considering how many children some of them have that actually takes some thought and imagination on their part) as the number of children they gave birth to as to why they can't feed them or take care of them. You can be offended all you like, but I'd put good money down that I'm far more offended by the rest of my species than you are at me. I have animals that aren't so incompetent and pathetic at rearing their offsping (as 'single' parents, without childcare, a vehicle, etc.). I have several species that manage to rear several batches of babies to adulthood each year.

I don't want to know the actual amount of cash that has been poured into welfare since it's inception ... even a healthy heart can only take so much before it just explodes ... but it's patently obvious that NO nation can end poverty by trying to buy it. All the sob stories and hard luck tales are still there.

Taking money from people who earn it to give it to those who won't doesn't give them a bit of incentive to get off their butts and start earning their own. All it does is teach them to sit around and wait for the next installment ... much like they sit and wait for the next epidode of all their favorite tv shows.

The one thing that it will never do is to increase the wealth of anyone. Cripes, did half the people in this country take some twisted, reverse math class?

 



 

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