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"trickle down theory" seems obviously correct to me. Like, if a person has lots of money, it's stupid to sit on it - they invest it, found businesses, hire people, buy things - all of which are putting money back into lower tiers of the economy to me. Am I missing something big?

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You're missing that they are literally sitting on it about 80% of the time. Deep dive into the Panama Papers.

Aella

@Aella_Girl

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@CoryStoker

But that just seems retarded to me. Sitting on money is so dumb I have trouble believing rich people with access to the best financial advisors would do that. Unless the tax burden is discouraging them from reinvesting into the economy?

11:54 PM · Dec 27, 2019

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If anyone has ever given a good explanation of why I would definitely be intrested. All I know is that, yeah, most of it is hoarded. The "why" would be much more interesting to know than the "what" and the "how."

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I absolutely don't think most of it is hoarded. That sounds like an insane myth to me. I'm not even rich and I have my savings invested because if I didn't id be losing money to inflation. No way rich people are just letting their money get eaten by inflation

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and

"Sitting" on money doesn't mean getting no return. High Frequency Trading adds no real liquidity to the market, doesn't substantively invest in companies operations, and makes shit tons of money. It's almost a lucrative private tax orchestrated against real investors.

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Ok this seems like a real answer, or at least I don't know enough about this. Do you have a link you recommend to learn more?

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The cognitive cost for deciding what to do with money is directly proportional to the amount of money involved (?)

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risk and loss aversion are extremely powerful psychological effects

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I’m pretty sure it’s not even possible to “sit on it”. If you put your money in the bank it’s automatically getting invested for you. You would literally have to get all your money in cash and cram it under your mattress in order to “sit on it”.

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"sitting on" can be strategic, and useful also. You can outperform the stock market by waiting to invest until things become cheap. We ought to be grateful for people who sit on money when things are overpriced, as they are protecting the inheritance of the future

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No they aren't just sitting on money. Otherwise they'd be losing inflation year over year. Contrary to popular belief, people who make money look for ways to make their money make more money. And those who inherit wealth either learn to grow it or lose it over generations.

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They really don't have as much to worry about as you say. They are individuals, and they want to never worry about anything ever again. So they get as much wealth as possible to dodge these systems, and keep the unlimited wealth for the rest of their finite lives.