Investment vs. consumption 2 | Finance & Capital Markets | Khan Academy

[@lisinka3]

It's hard to even imagine how HUGE of an investment it was for Sal to make these videos of wisdom. This video should have at least 10 times more views.

[@djvugts5510]

Best 11 year old comment I have ever liked!

[@riddhigautam3431]

I love you mr sal. Not even kidding. You are one of the few people that make understanding these concepts interesting. You keep curiousity alive. Thank you

[@Keyguya]

In my opinion Investment/savings means deferred consumption. Consumption is what we all evidently want, but we can consume more later, if we invest first. Some people want to spend everything now, some like to invest and spend more later

[@SeenaAbedi]

that makes sense

[@dabay200]

Got to save for the rest of my life to get some ego gratification

[@djvugts5510]

Wauw1 You have described boomers in one sentence!

[@ThePeterDislikeShow]

I have another good example. Eating junk food vs. eating healthy food. The junk food is almost pure consumption; it may taste good right now but it consumes resources, does not generally improve productivity, etc. A lot of people simply lump all food into their budget, which I feel is a mistake.

[@LECityLECLEC]

These ideas are really genius thanks Sal!

[@bigdereksch]

Couldn't someone argue though that the advertising companies that create ads for Louis Vuitton and the models used then spend the money at a restaurant or on laptops so they can watch the Khan Academy's KZbin channel. I mean, the models used in commercials make a lot of money then go to a bar and pay for the bartenders education via gratuity. It's a roundabout argument, but one worth noting.

[@UmTheMuse]

Basic economics hinges on the principle that people's demand is insatiable. There is a limit to the resources available at any one time, and they have to be parceled out somehow. Economics is about getting the most out of those resources in order to satisfy as much as possible that unlimited demand. In other words, increasing allocative efficiency.

[@AsterixtheGaul7]

First time I've disliked - subjective judgement on what motivates people , and what value is.

[@quinnhk]

Salman takes some pretty crazy vacations.

[@nomsdeguerre]

vacation or not....----depending on your family...hahahaaa so true.

[@benjaminramos7180]

Although this video is subjective, I could not agree more with Sal.

[@ilianko2]

The equilibrium between consumption and investment is the key point of having happy people and healthy economics, if you are not using any other tolls like religion or any kind of brainwashing techniques. During the cold war a huge gap between west and east was created, because all of the wealth in east countries was invested in science research (how to build new weapon), but the west was investing in advertising research (how to buy a new car)

[@ThePeterDislikeShow]

@ulysseinvest I'd argue it's not that simple. Eating the fish will probably give you energy or nutrition to later do work for something. I'd argue that eating most basic non-processed foods is closer to investment than consumption. On the other hand, eating junk food, fast food, etc, is probably pure consumption, if not outright wealth destruction.

[@pongman]

I think this to me means that "trickle down economics" doesn't work. A wealthy person doesn't really contribute to society in his manner of purchasing things. He buys a Rolls Royce for 400 thousand dollars and it goes to a factory in England. It doesn't really help the local economy. The same goes for Rolex watches and other things that the billionaire buys. I agree btw, Nano Solar technology and Gulf Stream technology.

[@java0317]

Best video to show to pretentious/egotistic men and women (and children). Although I guess you can claim that the dancers provide entertainment, allow you to relax and even make you more productive at work. What do you guys think?

[@SeenaAbedi]

the 200 people who danced, what if those 200 people used that money and invested it into solar as well, similar to the louis vuitton example.

[@MrMuskaaan1]

8:05 Sal: let's say this is you Me:I'm obviously ugly

[@WorthlessWinner]

@ChristoMafesto i'm laughing at the idea that becoming the new emperor Xerxes costs... 2 thousand dollars.

[@UmTheMuse]

I'm sorry, but your conclusion is ridiculous. Yes, having people entertain you is a form of consumption. Entertainers invested their time to get something that they valued more than that time, though. In general, one invests in order to consume. In other words, an investment is a means to an end, not an end in and of itself, unlike consumption. You're just using the terms to justify a value judgment (one that I personally agree with mostly, but that's irrelevant).

[@ThePeterDislikeShow]

@ulysseinvest Exactly. People always talk about producing jobs. What we REALLY need to produce is wealth. The economy can be good without any jobs changing hands if everyone produces a lot of wealth for themselves. On the other hand, the economy can be horrible with lots of jobs producing nothing even if millions of dollars change hands.

[@SGLear]

This video gets into a lot of "murky" territory when it comes to investment versus consumption, because really what the money is being spent on can go in any direction after you've spent it. Take the extravagant vaca: some of the money you spent goes towards the dancers' wage, which might be used to make a simple home payment or better Ed. for their children, which indirectly contributes to Society and is therefore an investment. If a pro. or serv. is purchased by you, it aids Society somewhat.

[@pongman]

Hey Sal! Consumption 1 isn't available?

[@MdotWelblech]

So art, especially ballet, opera, performance art, etc. is the worst form of consumption -- a destruction of wealth to rival credit-default-swap instruments of mass wealth destruction? I think you were on stronger ground with neutrality. Think utils, not dollars. It's a free market -- one guy saying an unpainted pencil is a true product worth more than a horrendously over-priced purse doesn't make it so, economically.

[@b8bpattson]

What if you hire 100 homeles, poor peoplwe to chant your name, etc.? Is that "pur" consumption?

[@ThePeterDislikeShow]

I'd say. The homeless people could be doing something more useful and your money would be better invested if you hired them for better things.

[@b8bpattson]

Well, I am trying the get to the real meaning of "useful" for economics. If you throw money down a well, it stops there.. If you hire the chanters, then they go out and spend, etc. And it is helicopter money. Which is not self sustaining. and therefore appears to be "pure consumption". Economists usually use the example of a loan to a person who builds a factory and is successful. He creates jobs and income for himself, his workers and the bank which furnished the loan. It is claimed that this is self sustaining, but I am beginning to doubt that.

[@kunsboy]

he sounds socialist !!! are you mr. Khan, a socialist?

[@SV42165]

Yeah