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 Originally Posted by Renton
My point is that the acceptable conversion rate for present money to future money is different for different people, and tends to be higher for people with low incomes. Only the ultra rich would be correct in putting a large amount of money on an investment with a tiny return, even if the risk is nearly zero and the return nearly guaranteed.
When we assume the equity investment has enough ROI for the investor, this doesn't matter, but it looks like you're not assuming that while I am assuming that. Poor people save all the time. They used to far more than they do today, probably mostly due to welfare incentives and probably also lack of education on finance and a cultural shift away from frugality towards current consumption as opposed to future consumption.
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