Invert your thesis, from “the rich are so rich because they spend less money” to “the poor are so poor because they spend more money”, and it becomes much more defensible. Boots theory captures the “being poor is expensive” element that’s true in Ankh-Morkpork and also true on Earth—look at the markups on any household item when it’s sold individually rather than in bulk, and then consider what happens to people who don’t have what it takes to plan ahead and make bulk purchases.
If we’re being particularly literal about things, Ankh-Morpork canonically lacked fiat currency until the events of Making Money, so we might want to consider the other ways in which their economics functions differently from our own. They also have magic, and the deities who implement their laws of nature sometimes pop round for a cup of tea. So I wouldn’t rule out that Vimes’s use of boots theory as a full explanation for economics could be less descriptive than prescriptive—he lives in a world where enough people believing anything hard enough makes it real.
It sounds so wise and worldly! And it’s also complete bullshit.
Because let’s say that I want a pair of sneakers (i.e., shoes that are comfortable and won’t hurt my feet) that won’t wear out in a couple of years, so that I can buy them once and wear them for ten years. Why, I’d have to pay five times the price of an ordinary pair of sneakers! But then I’d have my ten-year shoes. Right?
WRONG.
Oh, sure, I can buy a pair of sneakers that costs five times what normal sneakers cost. And they’ll last for just about as long—at best!
And it’s the same with cookware, it’s the same with computer hardware, it’s the same with a whole lot of things.
The reason why people mistakenly come to believe this “boots theory” is not that more expensive stuff lasts longer, out of proportion to the price difference—but rather, that stuff purchased in the past, whose inflation-adjusted price was substantially higher than the current price of the current cheap goods, lasts longer. But this is not because of the price difference.
There is still a real phenomenon where people spend a lot to buy things that are poor quality instead of longer lasting higher quality things. At the extreme, this is paying rent instead of buying and building equity, or buying consumable goods instead of investments, or working jobs instead of building passive income—and those are things that use money instead of building up generational wealth.
It’s interesting that you should mention this. I currently rent an apartment. At one point, some years ago, I realized that my financial situation was such that, if I wanted to, I could buy a condo or co-op. I recalled the received wisdom that owning is better than renting, and looked into my options. After doing the math, I concluded that, on a time horizon of 10, 20, 30, or 40 years[1], renting unambiguously came out ahead—and not just slightly ahead, but way ahead. Buying an apartment would have amounted to setting a big pile of money on fire for no reason whatsoever. The received wisdom was diametrically wrong.
(One can make all sorts of objections to this, along the lines of “but isn’t this just because of the crazy real estate market in NYC”, or “but isn’t this just because of historically-unusual economic situation X which currently obtains”, etc. But what is the use of that? The reality is what it is.)
buying consumable goods instead of investments
Investing is certainly useful, if you can do it. But what in the world does that have to do with “boots theory”, or with the “phenomenon where people spend a lot to buy things that are poor quality instead of longer lasting higher quality things”?
Your “instead of” in the “consumable goods instead of investments” clause is fallacious, I think. Poor people spend some amount of money on consumable goods, have no money left over, and thus do not invest. Rich people spend more money on consumable goods than poor people, still have money left over after spending more, and invest the remainder. This is unambiguously not consistent with “boots theory”.
working jobs instead of building passive income
This, too, seems like a non sequitur. You can only be “building passive income” if you already have a lot of money. You can’t get there by spending less money. What’s more, if you do have a lot of money (which you can invest, thus securing a source of passive income), nothing prevents you from also working a job, and earning additional money. Indeed, plenty of people do just that. Many don’t, of course—but this is not because it would somehow end up costing them more money than not working! Rather, it’s because they (quite reasonably) don’t want to work if they don’t have to.
There is still a real phenomenon where people spend a lot to buy things that are poor quality instead of longer lasting higher quality things.
Well, I should like to see some examples. So far, our tally of actual examples of this alleged phenomenon seems to still be zero. All the examples proffered thus far… aren’t.
Well, I should like to see some examples. So far, our tally of actual examples of this alleged phenomenon seems to still be zero. All the examples proffered thus far… aren’t.
“These boots,” I said gesturing at what I was trying on, on my feet, “cost $200. Given that I typically buy a pair for $20 every year, that means these boots have to last 10 years to recoup the initial investment.”
That was on January 17, 2005. They died earlier this month – that is in the first week of December, 2018. So: almost but not quite 14 years.
So, purely as an investment, they returned a bit under $80, which is a 40% ROI.
But… if we’re talking about this just as an investment, we need to compare to other investments. Let’s say the S&P 500 returns 7% consistently (I think that’s pessimistic—note, not adjusting for inflation because the $20 boots haven’t changed with inflation either).
In one world, Siderea buys $200 boots and invests $80. After 14 years, she has $80⋅1.0714=$206 and no boots.
In another world, Siderea buys $20 boots and invests $260. A year later she withdraws $20 and buys boots, and so on. After 14 years, she has… finite geometric series, 20(r1+...+r14), I think she has $483 and no boots.
So if we think of this as a purely financial investment, I guess it was a bad one?
(This is also often missing when people talk about buying versus renting. Yes, the mortgage is often lower than rent, and house value is likely higher at the end, but you gave up investing your deposit. How do those effects compare? Probably depends on time and place.)
In another world, Siderea buys $20 boots and invests $260. …
I think that your calculation is a bit off. After a year, she’ll have $258.20 (i.e., ($260 * 1.07) − $20). After two years, $256.27 (i.e., ($258.20 * 1.07) − $20). And so on. After 14 years, she’ll have $219.41.
Still better than buying the expensive boots—in purely financial terms.
(Inflation-adjustment is another important point, of course. That $200 in 2005 would be $265 in 2018 dollars.)
In short, yes, this is indeed a very poor example—ironic, as it’s a real-life version of the original example!
(This is also often missing when people talk about buying versus renting. Yes, the mortgage is often lower than rent, and house value is likely higher at the end, but you gave up investing your deposit. How do those effects compare? Probably depends on time and place.)
This is precisely what made renting come out far ahead, in my aforementioned calculation. (And this is without even considering the time value of money.)
Smaller correction—I think you’ve had her buy an extra pair of boots. At $260 she’s already bought one pair, so we apply x↦1.07x−20 thirteen times, then multiply by 1.07 again for the final year’s interest, and she ends with no boots, so that’s $239.41. (Or start with $280 and apply x↦1.07(x−20) fourteen times.)
Not sure why my own result is wrong. Part of it is that I forgot to subtract the money actually spent on boots—I did “the $20 she spends after the first year gets one year’s interest, so that’s $21.40; the $20 she spends after the second year gets two years’ interest, so that’s $22.90...” but actually it’s only $1.40, $2.90 and so on. But even accounting for that, I get $222.58. So let’s see...
Suppose she only needs to buy two pairs of boots. According to your method she goes $40 → $21.40 → $1.50. (Or, $40 and no boots → $20 and boots → $21.40 and no boots a year later → $1.40 and boots → $1.50 and no boots a year later.) According to mine, of her original $40, $20 of it earns no interest and $20 of it earns a years’ interest. But that assumes the interest she earns in that year is withdrawn, she gets to keep it but it doesn’t keep earning interest. So that’s why I got the wrong answer.
I think you’ve had her buy an extra pair of boots.
Ah, true. So, $239.41, at the end.
(Of course, this all assumes that the cheap boots don’t get more expensive over the course of 14 years. Siderea does say that she spends $20 each year on boots, but that’s hard to take seriously over a decade-plus period…)
You interpreted this as defending boots theory, which wasn’t my intent. I said that there was a real phenomena, not that boots theory is correct.
And sure, rent can come out ahead for some cases, that doesn’t imply it’s always better, or that upper middle class people generally actually come out ahead—because even where you could end up ahead renting, in fact, the money saved is often spent instead of invested.
Also, I think the claimed non-sequitur isn’t one—lots of passive income routes don’t require much financial investment, and many that do, like starting a company, can be financed with loans. The point is that people choose to invest their limited time and money in ways that do not build wealth. (Which isn’t a criticism—there are plenty of other, better, goals in life.)
I think there are still two different topics, although with some overlap: how to budget and how to get rich. Good budgeting is good, whether you are poor or rich. If you are poor, it can help avoid losing everything. If you are rich, it can help avoid wasting all your money and becoming non-rich.
But the (implied) idea that budgeting can make poor people rich, or that it is the main force that keeps poor and rich apart… that does not automatically follow, and actually many people doubt it. Hypothetically they may be wrong, but this needs to be checked separately.
Basically, budgeting can never save more money than “your income, minus the minimum necessary expenses”. If your income is e.g. $300 a month, there is no way you could save more than $300 a month. Realistically, you probably can’t even save $50 a month.
Even if you every month put $50 into passively managed index funds (which already seems like an unrealistic best case scenario for someone who makes $300 a month), this will not make you rich. It will help you save $600 a year, $6000 a decade, so maybe $300 000 during a lifetime, generating a passive income of $12000 a year, that is $1000 a month by the time you are old and retired, under the most optimistic scenario. And I am sure that most rich people spend more than $1000 a month.
So what you need is a combination of decent income + good budgeting + good investing, and then keep doing that for decades. Which means that even assuming that it can make you rich, it will only make you rich in a distant future, not now. In other words, if you started poor, even if you are doing everything right, you can still be poor, because the expected wealth is still a few decades in the future, not here and now.
EDIT: And meanwhile, a rich person has inherited a trust fund from their parents, spends as much money as the fund gives them every month, and doesn’t have to worry about anything. The only budgeting skill needed is something like “make sure your monthly expenses do not exceed $20000 this month”.
I mostly agree with you… but: 1. You created a false dichotomy where budgeting excludes investing, then said you can’t ever make money with budgeting, because by definition anything that is in your budget cannot make money—but spending on a house instead of rent, for example, clearly violates that assumption. 2. Budgeting can include time, in addition to money, and among other things, that matters because income isn’t a fixed quantity over time. Things that people can do to use time to drastically change income include starting businesses, or taking night classes to get a more lucrative job. 3. The last point is conflating questions, because yes, inheriting or a trust fund is already being rich (but inheritances and trust funds are not the same thing!) However, most second and third generation nouveau riche folks do, in fact, spend down and waste the inherited fortune, once they are old enough to actually inherit instead of living on a managed trust fund.
Where is it cheaper per item to buy the same food or household good singly rather than in bulk?
Where can you get a single roll of the same toilet paper for less per roll than getting it in a bigger pack? Ok, now what if you need TP and the cash at your disposal at that moment is less than the cost of the bulk pack but more than the cost of the single roll?
When is it cheaper (time + money) to cook one meal at a time versus meal prep for the whole week? OK, now what if you can’t afford the whole week’s worth of food at once?
We might be talking about poverty at different orders of magnitude, and you might be writing off a lot of failures to purchase efficiently as “skill issue”… but being poor in skills and the capacity to hone them is, itself, a form of poverty.
We might be talking about poverty at different orders of magnitude, and you might be writing off a lot of failures to purchase efficiently as “skill issue”… but being poor in skills and the capacity to hone them is, itself, a form of poverty.
Once we’ve redefined “poverty” to mean something other than poverty, we can obviously make all sorts of claims about it. Being “poor in skills and the capacity to hone them” can be the cause of poverty. Notice how this is a different cause from the one that “boots theory” posits.
As I’ve written, I have personally experienced my family being quite poor. Buying a roll of toilet paper instead of a whole package, or buying just one meal’s worth of food instead of a week’s worth, is definitely a “skill issue”.
Being poor is unpleasant in many ways. It being “expensive” is not one of them.
Other examples include buying poor quality food and then having to pay for medical care, buying a cheap car that costs more in repairs, payday loans, ect.
buying poor quality food and then having to pay for medical care
I have seen this sort of thing mentioned, but I don’t think that it works.
Let’s set aside for the moment the somewhat tenuous and indirect connection between the food you eat today, and the medical care you will require, some years down the line. (If you end up with heart disease in ten years because you’ve been eating poorly, surely this can’t be any part of the reason why you’re poor today—that would require some sort of anti-temporal causation!)
And let’s also set aside this business of “having to pay for medical care”. (Even in the United States—famously the land of medical bills—the poorest people are also the ones who are eligible for Medicaid. You’re more likely to have to pay for medical care if you’re sufficiently well-off to eat well than if you’re very poor!)
Let’s instead consider just this notion that there’s a causal connection between being poor and eating poor quality food—and specifically, the sort of food that contributes to poor health outcomes—because you can’t afford healthy food.
There was a time when my own family was very poor. (We’d just arrived in the United States as brand-new immigrants, with little more than the proverbial clothes on our backs; my mother had to work two, or sometimes three, jobs just to pay the rent; even my grandfather, then already of retirement age, got a job delivering newspapers.) As I would routinely help my grandmother with grocery shopping, I was very well acquainted with how much it cost to feed a family on a very tight budget, what sorts of purchasing decisions needed to be made, etc.
And what I can tell you is that the sort of food we ate was not cheap-but-unhealthy. Rather, it was cheap-but-healthy. What was missing was luxuries and variety—not nutrition! You can, in fact, have a healthy (and even tasty) diet on a tight budget. I have extensive personal experience with this.
The difference between my family and the poor people who buy junk food is much more cultural than anything else. Specifically, the missing ingredient is cultural transmission of knowledge of, and expertise in, preparation of nutritious, satisfying food under severe financial constraints. My family’s cultural background contains a tremendous amount of accumulated wisdom on this topic. Someone who, for whatever reason, lacks access to such cultural metis, will be severely disadvantaged in this regard. But this has nothing to do with poverty as such.
buying a cheap car that costs more in repairs
This, too, is a dubious example. The key word here is “more”. More than what?
Do you mean:
(1) “Car A (which costs less), over a period of N years, requires repairs of cost totaling X; car B (which costs more), over the same period of N years, requires repairs of cost totaling Y; X > Y”
If so, then notice that this does not support “boots theory”! But perhaps you instead mean:
(2) “Car A (which costs less), over a period of N years, requires repairs of cost totaling X; car B (which costs more), over the same period of N years, requires repairs of cost totaling Y; (cost[A] + X) > (cost[B] + Y)”
This might support “boots theory”. But is it plausible?
The car I currently drive was bought used, at a cost of ~$13,000, in 2016. Since then I have spent ~$2,000 on repairs (not counting inspections and oil changes, which will apply to everyone equally), for a total of ~$15,000.
In 2016, I could instead have purchased a much cheaper used car, for ~$3,000. Suppose that this had been all I could afford. For this to have turned out to be a “boots theory”-supporting example, I’d then have to spend ~$12,000, in the 9-year period since, on repairs.
Seems improbable. Indeed, at that point, I could just buy another car. I could buy a new car four times! (And notice that this scenario would then still not support “boots theory”.)
payday loans
This is a complicated topic, and I am not qualified to opine confidently on it. I will say only that it seems like a highly non-central example of the alleged phenomenon.
Invert your thesis, from “the rich are so rich because they spend less money” to “the poor are so poor because they spend more money”, and it becomes much more defensible. Boots theory captures the “being poor is expensive” element that’s true in Ankh-Morkpork and also true on Earth—look at the markups on any household item when it’s sold individually rather than in bulk, and then consider what happens to people who don’t have what it takes to plan ahead and make bulk purchases.
If we’re being particularly literal about things, Ankh-Morpork canonically lacked fiat currency until the events of Making Money, so we might want to consider the other ways in which their economics functions differently from our own. They also have magic, and the deities who implement their laws of nature sometimes pop round for a cup of tea. So I wouldn’t rule out that Vimes’s use of boots theory as a full explanation for economics could be less descriptive than prescriptive—he lives in a world where enough people believing anything hard enough makes it real.
It certainly is not true on Earth.
As I have written:
The reason why people mistakenly come to believe this “boots theory” is not that more expensive stuff lasts longer, out of proportion to the price difference—but rather, that stuff purchased in the past, whose inflation-adjusted price was substantially higher than the current price of the current cheap goods, lasts longer. But this is not because of the price difference.
It’s because they don’t make ’em like they used to.
There is still a real phenomenon where people spend a lot to buy things that are poor quality instead of longer lasting higher quality things. At the extreme, this is paying rent instead of buying and building equity, or buying consumable goods instead of investments, or working jobs instead of building passive income—and those are things that use money instead of building up generational wealth.
It’s interesting that you should mention this. I currently rent an apartment. At one point, some years ago, I realized that my financial situation was such that, if I wanted to, I could buy a condo or co-op. I recalled the received wisdom that owning is better than renting, and looked into my options. After doing the math, I concluded that, on a time horizon of 10, 20, 30, or 40 years[1], renting unambiguously came out ahead—and not just slightly ahead, but way ahead. Buying an apartment would have amounted to setting a big pile of money on fire for no reason whatsoever. The received wisdom was diametrically wrong.
(One can make all sorts of objections to this, along the lines of “but isn’t this just because of the crazy real estate market in NYC”, or “but isn’t this just because of historically-unusual economic situation X which currently obtains”, etc. But what is the use of that? The reality is what it is.)
Investing is certainly useful, if you can do it. But what in the world does that have to do with “boots theory”, or with the “phenomenon where people spend a lot to buy things that are poor quality instead of longer lasting higher quality things”?
Your “instead of” in the “consumable goods instead of investments” clause is fallacious, I think. Poor people spend some amount of money on consumable goods, have no money left over, and thus do not invest. Rich people spend more money on consumable goods than poor people, still have money left over after spending more, and invest the remainder. This is unambiguously not consistent with “boots theory”.
This, too, seems like a non sequitur. You can only be “building passive income” if you already have a lot of money. You can’t get there by spending less money. What’s more, if you do have a lot of money (which you can invest, thus securing a source of passive income), nothing prevents you from also working a job, and earning additional money. Indeed, plenty of people do just that. Many don’t, of course—but this is not because it would somehow end up costing them more money than not working! Rather, it’s because they (quite reasonably) don’t want to work if they don’t have to.
Well, I should like to see some examples. So far, our tally of actual examples of this alleged phenomenon seems to still be zero. All the examples proffered thus far… aren’t.
Or longer, really—but “longer” is likely to be a moot point, for various reasons.
From https://siderea.dreamwidth.org/1477942.html:
But… if we’re talking about this just as an investment, we need to compare to other investments. Let’s say the S&P 500 returns 7% consistently (I think that’s pessimistic—note, not adjusting for inflation because the $20 boots haven’t changed with inflation either).
In one world, Siderea buys $200 boots and invests $80. After 14 years, she has $80⋅1.0714=$206 and no boots.
In another world, Siderea buys $20 boots and invests $260. A year later she withdraws $20 and buys boots, and so on. After 14 years, she has… finite geometric series, 20(r1+...+r14), I think she has $483 and no boots.
So if we think of this as a purely financial investment, I guess it was a bad one?
(This is also often missing when people talk about buying versus renting. Yes, the mortgage is often lower than rent, and house value is likely higher at the end, but you gave up investing your deposit. How do those effects compare? Probably depends on time and place.)
I think that your calculation is a bit off. After a year, she’ll have $258.20 (i.e., ($260 * 1.07) − $20). After two years, $256.27 (i.e., ($258.20 * 1.07) − $20). And so on. After 14 years, she’ll have $219.41.
Still better than buying the expensive boots—in purely financial terms.
(Inflation-adjustment is another important point, of course. That $200 in 2005 would be $265 in 2018 dollars.)
In short, yes, this is indeed a very poor example—ironic, as it’s a real-life version of the original example!
This is precisely what made renting come out far ahead, in my aforementioned calculation. (And this is without even considering the time value of money.)
Huh, thanks for the correction.
Smaller correction—I think you’ve had her buy an extra pair of boots. At $260 she’s already bought one pair, so we apply x↦1.07x−20 thirteen times, then multiply by 1.07 again for the final year’s interest, and she ends with no boots, so that’s $239.41. (Or start with $280 and apply x↦1.07(x−20) fourteen times.)
Not sure why my own result is wrong. Part of it is that I forgot to subtract the money actually spent on boots—I did “the $20 she spends after the first year gets one year’s interest, so that’s $21.40; the $20 she spends after the second year gets two years’ interest, so that’s $22.90...” but actually it’s only $1.40, $2.90 and so on. But even accounting for that, I get $222.58. So let’s see...
Suppose she only needs to buy two pairs of boots. According to your method she goes $40 → $21.40 → $1.50. (Or, $40 and no boots → $20 and boots → $21.40 and no boots a year later → $1.40 and boots → $1.50 and no boots a year later.) According to mine, of her original $40, $20 of it earns no interest and $20 of it earns a years’ interest. But that assumes the interest she earns in that year is withdrawn, she gets to keep it but it doesn’t keep earning interest. So that’s why I got the wrong answer.
Ah, true. So, $239.41, at the end.
(Of course, this all assumes that the cheap boots don’t get more expensive over the course of 14 years. Siderea does say that she spends $20 each year on boots, but that’s hard to take seriously over a decade-plus period…)
You interpreted this as defending boots theory, which wasn’t my intent. I said that there was a real phenomena, not that boots theory is correct.
And sure, rent can come out ahead for some cases, that doesn’t imply it’s always better, or that upper middle class people generally actually come out ahead—because even where you could end up ahead renting, in fact, the money saved is often spent instead of invested.
Also, I think the claimed non-sequitur isn’t one—lots of passive income routes don’t require much financial investment, and many that do, like starting a company, can be financed with loans. The point is that people choose to invest their limited time and money in ways that do not build wealth. (Which isn’t a criticism—there are plenty of other, better, goals in life.)
Good point.
I think there are still two different topics, although with some overlap: how to budget and how to get rich. Good budgeting is good, whether you are poor or rich. If you are poor, it can help avoid losing everything. If you are rich, it can help avoid wasting all your money and becoming non-rich.
But the (implied) idea that budgeting can make poor people rich, or that it is the main force that keeps poor and rich apart… that does not automatically follow, and actually many people doubt it. Hypothetically they may be wrong, but this needs to be checked separately.
Basically, budgeting can never save more money than “your income, minus the minimum necessary expenses”. If your income is e.g. $300 a month, there is no way you could save more than $300 a month. Realistically, you probably can’t even save $50 a month.
Even if you every month put $50 into passively managed index funds (which already seems like an unrealistic best case scenario for someone who makes $300 a month), this will not make you rich. It will help you save $600 a year, $6000 a decade, so maybe $300 000 during a lifetime, generating a passive income of $12000 a year, that is $1000 a month by the time you are old and retired, under the most optimistic scenario. And I am sure that most rich people spend more than $1000 a month.
So what you need is a combination of decent income + good budgeting + good investing, and then keep doing that for decades. Which means that even assuming that it can make you rich, it will only make you rich in a distant future, not now. In other words, if you started poor, even if you are doing everything right, you can still be poor, because the expected wealth is still a few decades in the future, not here and now.
EDIT: And meanwhile, a rich person has inherited a trust fund from their parents, spends as much money as the fund gives them every month, and doesn’t have to worry about anything. The only budgeting skill needed is something like “make sure your monthly expenses do not exceed $20000 this month”.
I mostly agree with you… but:
1. You created a false dichotomy where budgeting excludes investing, then said you can’t ever make money with budgeting, because by definition anything that is in your budget cannot make money—but spending on a house instead of rent, for example, clearly violates that assumption.
2. Budgeting can include time, in addition to money, and among other things, that matters because income isn’t a fixed quantity over time. Things that people can do to use time to drastically change income include starting businesses, or taking night classes to get a more lucrative job.
3. The last point is conflating questions, because yes, inheriting or a trust fund is already being rich (but inheritances and trust funds are not the same thing!) However, most second and third generation nouveau riche folks do, in fact, spend down and waste the inherited fortune, once they are old enough to actually inherit instead of living on a managed trust fund.
Where is it cheaper per item to buy the same food or household good singly rather than in bulk?
Where can you get a single roll of the same toilet paper for less per roll than getting it in a bigger pack? Ok, now what if you need TP and the cash at your disposal at that moment is less than the cost of the bulk pack but more than the cost of the single roll?
When is it cheaper (time + money) to cook one meal at a time versus meal prep for the whole week? OK, now what if you can’t afford the whole week’s worth of food at once?
We might be talking about poverty at different orders of magnitude, and you might be writing off a lot of failures to purchase efficiently as “skill issue”… but being poor in skills and the capacity to hone them is, itself, a form of poverty.
Once we’ve redefined “poverty” to mean something other than poverty, we can obviously make all sorts of claims about it. Being “poor in skills and the capacity to hone them” can be the cause of poverty. Notice how this is a different cause from the one that “boots theory” posits.
As I’ve written, I have personally experienced my family being quite poor. Buying a roll of toilet paper instead of a whole package, or buying just one meal’s worth of food instead of a week’s worth, is definitely a “skill issue”.
Being poor is unpleasant in many ways. It being “expensive” is not one of them.
Other examples include buying poor quality food and then having to pay for medical care, buying a cheap car that costs more in repairs, payday loans, ect.
I have seen this sort of thing mentioned, but I don’t think that it works.
Let’s set aside for the moment the somewhat tenuous and indirect connection between the food you eat today, and the medical care you will require, some years down the line. (If you end up with heart disease in ten years because you’ve been eating poorly, surely this can’t be any part of the reason why you’re poor today—that would require some sort of anti-temporal causation!)
And let’s also set aside this business of “having to pay for medical care”. (Even in the United States—famously the land of medical bills—the poorest people are also the ones who are eligible for Medicaid. You’re more likely to have to pay for medical care if you’re sufficiently well-off to eat well than if you’re very poor!)
Let’s instead consider just this notion that there’s a causal connection between being poor and eating poor quality food—and specifically, the sort of food that contributes to poor health outcomes—because you can’t afford healthy food.
There was a time when my own family was very poor. (We’d just arrived in the United States as brand-new immigrants, with little more than the proverbial clothes on our backs; my mother had to work two, or sometimes three, jobs just to pay the rent; even my grandfather, then already of retirement age, got a job delivering newspapers.) As I would routinely help my grandmother with grocery shopping, I was very well acquainted with how much it cost to feed a family on a very tight budget, what sorts of purchasing decisions needed to be made, etc.
And what I can tell you is that the sort of food we ate was not cheap-but-unhealthy. Rather, it was cheap-but-healthy. What was missing was luxuries and variety—not nutrition! You can, in fact, have a healthy (and even tasty) diet on a tight budget. I have extensive personal experience with this.
The difference between my family and the poor people who buy junk food is much more cultural than anything else. Specifically, the missing ingredient is cultural transmission of knowledge of, and expertise in, preparation of nutritious, satisfying food under severe financial constraints. My family’s cultural background contains a tremendous amount of accumulated wisdom on this topic. Someone who, for whatever reason, lacks access to such cultural metis, will be severely disadvantaged in this regard. But this has nothing to do with poverty as such.
This, too, is a dubious example. The key word here is “more”. More than what?
Do you mean:
(1) “Car A (which costs less), over a period of N years, requires repairs of cost totaling X; car B (which costs more), over the same period of N years, requires repairs of cost totaling Y; X > Y”
If so, then notice that this does not support “boots theory”! But perhaps you instead mean:
(2) “Car A (which costs less), over a period of N years, requires repairs of cost totaling X; car B (which costs more), over the same period of N years, requires repairs of cost totaling Y; (cost[A] + X) > (cost[B] + Y)”
This might support “boots theory”. But is it plausible?
The car I currently drive was bought used, at a cost of ~$13,000, in 2016. Since then I have spent ~$2,000 on repairs (not counting inspections and oil changes, which will apply to everyone equally), for a total of ~$15,000.
In 2016, I could instead have purchased a much cheaper used car, for ~$3,000. Suppose that this had been all I could afford. For this to have turned out to be a “boots theory”-supporting example, I’d then have to spend ~$12,000, in the 9-year period since, on repairs.
Seems improbable. Indeed, at that point, I could just buy another car. I could buy a new car four times! (And notice that this scenario would then still not support “boots theory”.)
This is a complicated topic, and I am not qualified to opine confidently on it. I will say only that it seems like a highly non-central example of the alleged phenomenon.