How can you spend $44K on a project and live off of it at the same time, in the latter case where someone handed you the money?
And if you are saving $44K per year, why can't you work for two years and then take one year off, having both $44K to live on and $44K to spend on a project?
And finally, didn't this start with a $44K loan, not a gift?
Equivalent? Perhaps, for accounting purposes. But that doesn't mean they're the same.
When you spend something, you're using money that you already have.
That's not the same as having lost out on potential income.
If I'm offered two jobs, one of which pays $10,000 more than the other, and I take the lower-paying job, I don't tell people, "Hey, I just spent $10,000," even if (in an accounting sense) it's equivalent to having spent $10,000.
Having more money gives the option to spend it or save it. When you make $40,000, you don’t really have the option to save much compared to people making $100,000.
Why can't you compare them? Money is money and I can't pay for groceries or rent with or without "get up and go to work every day", it's completely irrelevant.
That's not an accurate analogy if what you're saying the $1k/month is your entire pay.
More accurate would be saying I make a $100k/month of which $1k comes for a certain source, and then me saying that thousand is essential to my livelihood. I'd be lying if I said that; I make a whole lot less than $100k/month and I could easily forgo $1k/month today which just goes into my savings anyways.
I think you and redwood are violently in agreement. If you have more money, you can save your money and that money will make you more money. If you have less money, you can't.
Except that $17k is a large enough portion of most people’s income that there may be a significant difference in marginal utility between adding and subtracting it: $43k vs $60k looks very different from $60k vs $77k.
If you can DIY things that would cost someone else tens of thousands of £s/$s then imagine how much you'd need to earn to get that money after tax, and then add that total amount to your salary. That's the equivalent of what you're earning.
One reason why I don't like using salary as a comparison is it doesn't reflect people's life circumstances, except at the extremes. It's just easy to measure.
Did you really get paid much better? You're only as much as you save. Standardizing expenses to ensure a fair comparison usually surprises many.
Save to what? A bank account? Rather, let's say it's to buy some of the S&P 500 fund. Where's the savings leading? What's the growth rate? How much sooner does the extra dollars pull it into view?
For some it's not relevant, as they weren't saving (much) in the first place.
I didn't read it as "one simply has to earn more".
He's saying it's better to work on things that will lead to one earning more money, rather spending time monitoring how much one is spending. The first leads to an improved state, the second is just for ensuring one's state does not worsen. With one your increasing your 'cap', with the other you're just maximizing given a 'cap' (cap meaning the amount of money you can work with).
Imagine two people. One person makes 50k the other makes 100k. Both have expenses for food, tech, schools etc at 40k. This leaves 10k vs 60k to spend on housing. >500% difference.
The problem is, both person A and Person B have more money than the original $15-$20/h wage earner I spoke of in my original post.
The amount of money you are describing
>Person A rents at $1800/mo and is able to save $1000/mo
Is unimaginable for someone making $15-$20/h.
Sometimes the people on HN really don't seem to grasp the reality of being an average working person.
Everything you said in your post is nonsense that means nothing to a person literally living pay cheque to pay cheque with unchangeable expenses greater than income.
My $0.02 your pay should not be based on how much you spend. If your co-worker chooses to buy an expensive car or live in an expensive city, then they should not get paid more than the guy that lives with his parents because he wants to save money.
The comparison you made was inconsistent.
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