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Monday, August 20, 2018

Being Rich Isn’t What It Used to Be

Being rich used to mean you had access to goods and services that the poor simply didn't. These days, not so much.

In the past having a lot of money allowed you to do and have many things that most people didn’t have.

You could have a TV while your neighbors listened to the radio, air conditioning while they sweltered in the heat, go to the movies while they played board games, a vacation to tropical destinations while they drove to the lake.

But the incredible advance of technology has made almost all the luxuries of life accessible to wide swaths of the population.

Being rich now means that you get an iPhone X while your neighbor has the 7 or an Android. You have a big house with a big theater system, while your neighbor has a smaller house with a normal TV.

But you still both watch Netflix, you still both use the same apps, you still both take Uber, you shop at different grocery stores, but they mostly have the same products.

If you make $50,000 a year you can do and have almost everything that someone who makes $500,000 a year has. The only difference is quality and scale. You can’t fly first class on vacation or eat out every night or buy every new iPhone and MacBook or drive a Tesla, but you can take a vacation to Mexico, eat out on weekends, own an iPhone and a MacBook, and drive a nice Toyota.

Competition and cooperation on a global scale have rapidly driven down the prices of technology making it better for everyone, but especially for people who don’t have a lot of money. The shift to a world of abundance means that wealth will tend to only buy you high-status versions of the same goods, but not goods that no one else can afford.

Reprinted from the author’s blog.