Author Topic: Logarithmic Improvement To An Expense  (Read 5856 times)

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Logarithmic Improvement To An Expense
« on: May 31, 2015, 07:05:55 PM »
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« Last Edit: September 04, 2018, 08:40:23 PM by Mortgage Mutilator »

kpd905

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Re: Logarithmic Improvement To An Expense
« Reply #1 on: May 31, 2015, 07:43:00 PM »
Why can't all our expenses be 1000 times cheaper after 5 years?

I would love that.  My expenses now are around $3k a month, so $3 a month in 5 years would be nice.

I just switched to Ting today and will hopefully cut our monthly cell phone cost in half, so it's a start.

marty998

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Re: Logarithmic Improvement To An Expense
« Reply #2 on: June 01, 2015, 02:06:38 AM »
Many here will probably point to a car ($40,000 -> $4,000 etc) as their primary method of logarithmifying an expense.

I saw an interesting statistic last week regarding exponentials:

Kodak has 145,000 employees in 1988. Effectively killed off by technology replacements and by the time Facebook acquired it, Instagram were servicing 30 million customers with just 13 employees.

Extrapolate out exponentially another 25-30 years and imagine what the world will be like.

So recently I've been reading a book regarding the exponential change in technology that's been occurring over the last 100+ years. Moore's Law is a common known aspect of this trend but it's apparent in everything from CPU speeds to storage to human life expectancy and even brain scanning detail. They're all increasing at factors of 10 or even 100 every year or two. The result of this is something you've no doubt noticed in that it's now a LOT cheaper to buy say, 100GB of storage space than it was even 5 years ago. So it then dawned on me... why don't we try this for OTHER everyday expenses? Why are we content with "shaving $20 off" or whatever when we could be thinking bigger and making a leap to the next level instead of just chipping away. Why can't all our expenses be 1000 times cheaper after 5 years?

At the heart of this are numerous developments from scientists and researchers around the world all trying to push the limits and use new technologies/materials to make things even better/faster. Primarily they use the latest developed technology to push the front forward. So for example the ability to have a drone autonomously fly itself is a very new technology and now it will result in the development of faster, cheaper and more fuel efficient delivery of goods like Amazon is now developing. They use the latest tech to replace or greatly improve the current old way of doing something. The other big way this 10/100/1000x increase is usually possible is by transferring something into the "IT" domain. For example instead of physically sending paper with writing which we could only slightly improve on, we now send email. Because of this shift into the IT domain we can make improvements to it on the order of logarithmic steps. Sending 1,000,000 times as much mail is now trivial whereas if we had tried to do in the REAL world it'd be very complex. Finding an "IT" version isn't always possible or required but it does make it a lot easier if you can do it.


marty998

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Re: Logarithmic Improvement To An Expense
« Reply #3 on: June 01, 2015, 03:11:40 AM »
You don't have to imagine... just have a quick read over Ray Kurzweil's Predictions. This guy has been predicting future advancements and technologies for around 40 years and has a track record of getting around 80%+ of them bang on.

In 30 years time it'll be 2045 which according to Ray will mean this will be happening:
Quote
The technological singularity occurs as artificial intelligences surpass human beings as the smartest and most capable life forms on the Earth. Technological development is taken over by the machines, who can think, act and communicate so quickly that normal humans cannot even comprehend what is going on. The machines enter into a "runaway reaction" of self-improvement cycles, with each new generation of A.I.s appearing faster and faster. From this point onwards, technological advancement is explosive, under the control of the machines, and thus cannot be accurately predicted (hence the term "Singularity").

So what you're saying is that I'll probably be plugged into the Matrix?


arebelspy

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Re: Logarithmic Improvement To An Expense
« Reply #4 on: June 01, 2015, 02:42:17 PM »
Moore's Law is a common known aspect of this trend but it's apparent in everything from CPU speeds to storage to human life expectancy and even brain scanning detail. They're all increasing at factors of 10 or even 100 every year or two.

(Emphasis added.)

Huh?



That's not increasing by a factor of 10 or 100 every year or two.

And most of that is infant mortality, if you take that out, life expectancy has barely increased.

If it had increased by a factor of 10 (picking the lower number) every other year (again, picking the lower number) since 1950, my life expectancy would be 6.8 x 10^33 years (or 68, with 32 zeros after it).  And, I assure you, I don't expect to live that long.  ;)

The result of this is something you've no doubt noticed in that it's now a LOT cheaper to buy say, 100GB of storage space than it was even 5 years ago. So it then dawned on me... why don't we try this for OTHER everyday expenses?

Technology improvements lead to that exponential decrease.  We don't have nearly those same technological advances in, say, food production.

Why are we content with "shaving $20 off" or whatever when we could be thinking bigger and making a leap to the next level instead of just chipping away. Why can't all our expenses be 1000 times cheaper after 5 years?

I don't see it as realistic to say my $22,000 annual spending will be $22 (yes, twenty-two dollars) in five years.

Societally, based on what money is, it doesn't even make sense.  There will always be a certain cost of living that's related to inflation, until we (if we) hit a post scarcity society.  Until then, the type of decrease you're talking about isn't possible.
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arebelspy

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Re: Logarithmic Improvement To An Expense
« Reply #5 on: June 02, 2015, 10:47:52 AM »
Huh?
That's not increasing by a factor of 10 or 100 every year or two.

And most of that is infant mortality, if you take that out, life expectancy has barely increased.

If it had increased by a factor of 10 (picking the lower number) every other year (again, picking the lower number) since 1950, my life expectancy would be 6.8 x 10^33 years (or 68, with 32 zeros after it).  And, I assure you, I don't expect to live that long.  ;)

A logarithmic change can look linear if you zoom in enough. Zoom OUT a bit though and you get this...

...
Looks pretty exponential to me ;-)

1) I was zoomed out pretty far--back to 1820.  I think the lifespans of the last 200 years is much more relevant to today's than the ones from 20,000 BC.  If you look at causes of death, I'd bet none of the top 10 from back then would crack the top 100 now.

2) Regardless, you said:
Quote
They're all increasing at factors of 10 or even 100 every year or two.

It's not even close.  If you want to argue it's increased by a factor of about 4 (from 18 to 78) over the course of 20,000 years.. okay.  Your chart shows that.  So I will live to be over 300 in approximately the year 22,000.  Oh wait, I won't live that long.


Technology improvements lead to that exponential decrease.  We don't have nearly those same technological advances in, say, food production.

No we don't as food has not been brought over to the "IT" side of things. You don't currently turn on a computer and have it build you your food so we plod on and do what we've done for last 20,000+ years and make it ourselves (mostly). That being said you only have to look at the new 3D food printers to realise that it won't be long before nanoscale machines will be able to build you any food from the molecules up in seconds once a decade or two have past. It's hard to imagine just like it would be hard for a 1980's person to imagine someone taking 10,000 photo's on one trip and then sharing them all with the entire world with the click of a button but it will happen. Once an existing process is replicated in the realm of "IT" it is able to access it's exponential increase in development and things just go bonkers. You can see it all around such as photo's (physical to data), paper (physical to data), communication (in person/mail to data), shopping (going to a store to online shops), power generation (big coal plants or fire to solar + batteries) and on and on. The big thing next up is biology, with the introduction of big data and neural net processing together with nanoscale manufacturing we're soon going to be able to have machines fix things inside out body very efficiently.

Raw materials still cost money.  As I said, until we get to a post scarcity society (which we might, once we have some of these ideas you're dreaming, as long as we invent nearly limitless energy also), there is physical barriers and scarcity that necessitate the cost of things.

I don't see it as realistic to say my $22,000 annual spending will be $22 (yes, twenty-two dollars) in five years.

Societally, based on what money is, it doesn't even make sense.  There will always be a certain cost of living that's related to inflation, until we (if we) hit a post scarcity society.  Until then, the type of decrease you're talking about isn't possible.

I'm sure you've read MMM's or Jacob's musings on how much more productive we are now than 50 years ago. I can't remember the exact number but I think it was something like you could work 1 day a week or so and that would provide you with all living expenses of a 1950's person (I paraphrase of course). Point is, in the future there will still be things to be bought however our bare minimum "needs" such as food and shelter might be very, VERY cheaply taken care of if that's all the person wants. If they want more fancy stuff then off to work they go (and I'm sure most will).

Yeah, I'm pretty sure I do remember Pete's article on it, as I wrote it. http://www.mrmoneymustache.com/2012/07/08/early-retirement-cant-work-or-id-have-heard-of-it-before/  ;)

That article was based on hard data and statistics.  We do have way more leisure time also (about 4 more hours per week versus people in the 50s). 

It has nothing to do with wild fantasys of logarithmic growth in areas that don't currently support that.  Short of wild fantasies, it's not realistic to talk about removing all expenses in a matter of years.

Even your examples aren't realistic.  You posted:
My results so far:
- Mobile phone bill: Was $420/year, now is $0/year as I convinced work to pay for it (could also potentially use the newer MVNO's to get it to $45ish a year?)
- Car bill for driving to work: Was $2500/year for car, petrol and related expenses, now it's $0/year as I ride to work and have sold the car
- Used to pay upwards of over $1,000/year for electricity, now with solar panels (which have already paid for themselves) our bill is around $70/year

1) That wasn't the expense going away, that was you offloading it to someone else (your employer).  The cost still exists, and is getting paid.
2) You'll still have related expenses (chain oil, tire tubes, etc), but sure, by switching types of transportation you drastically reduced the cost.  But you didn't keep the same lifestyle.  It's not like driving a car got 100% cheaper, you changed.  You can argue that change is a good thing, or not, but it's not materially comparing apples to apples.  If you had a car that cost $2500/yr. and now have a car that cost $5/yr a few years later due to technological improvements, that would be a crazy exponential increase.  Switching to biking isn't an exponential increase at all.
3) Again, you shifted the cost. It went from from an ongoing expense to an upfront one, and you have got a return on your investment.  It has paid for itself (as all investments eventually should, even at 1% an investment pays for itself after 100 years). That doesn't make it exponential growth.  If I invest 1MM in stuff that gives me 100k/yr (10% return), after 10 years I can say it has paid for itself and now gives me 100k/yr, but that doesn't make it free money, it's return on investment.

None of those have to do with exponential increases.

Furthermore I'm not saying all your expenses will be cut by 100 in 5 years

That's exactly what you said, only you were a factor of 10 times more ridiculous:
Why can't all our expenses be 1000 times cheaper after 5 years?

Shifting my current $22,000 annual spending to $22 annual spending, keeping the lifestyle the exact same, is complete fantasy.  Sorry.

I'm all for outside-the-box thinking.

A thread on thinking about your expenses, and cutting what you don't need?  Awesome.  Trying to figure out how to eliminate, rather than just reduce an expense?  Terrific! 

But couching it in techno-mumbo-jumbo by invoking Moore's Law, talking about exponential increases, and just making up things that don't make sense, like lifespans increasing 10 or 100x every year or two?  Yeah, that's just silly.  :)
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brooklynguy

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Re: Logarithmic Improvement To An Expense
« Reply #6 on: June 02, 2015, 11:00:10 AM »
Yeah, I'm pretty sure I do remember Pete's article on it, as I wrote it.

Too bad you also wrote the this post; otherwise you could've responded to the quoted portion with your "dayum - Dayum - DAYUM!" animated gif, which seems called for :)

forummm

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Re: Logarithmic Improvement To An Expense
« Reply #7 on: June 02, 2015, 04:09:28 PM »
Yeah, I'm pretty sure I do remember Pete's article on it, as I wrote it.

Too bad you also wrote the this post; otherwise you could've responded to the quoted portion with your "dayum - Dayum - DAYUM!" animated gif, which seems called for :)

I got you, ARS


arebelspy

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Re: Logarithmic Improvement To An Expense
« Reply #8 on: June 02, 2015, 04:14:25 PM »
Too bad you also wrote the this post; otherwise you could've responded to the quoted portion with your "dayum - Dayum - DAYUM!" animated gif, which seems called for :)

I got you, ARS

Okay, that amusing fact aside though, am I crazy?  Or is the OP?   

No one is really weighing in but us, so:


Also that filetype is jpg (right-click and open image in new tab and look at URL), not gif, yet it's animated?

Once again:

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beltim

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Re: Logarithmic Improvement To An Expense
« Reply #9 on: June 02, 2015, 04:26:59 PM »
The OP is clearly at least the crazier one.  Most of the examples are not logarithmic improvement, as you pointed out.  And as for logarithmic improvement happening because of the "IT-ization" of a field, I give you the always brilliant xkcd:

« Last Edit: June 02, 2015, 04:28:42 PM by beltim »

forummm

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Re: Logarithmic Improvement To An Expense
« Reply #10 on: June 02, 2015, 04:42:17 PM »
Too bad you also wrote the this post; otherwise you could've responded to the quoted portion with your "dayum - Dayum - DAYUM!" animated gif, which seems called for :)

I got you, ARS

Okay, that amusing fact aside though, am I crazy?  Or is the OP?   

...

Also that filetype is jpg (right-click and open image in new tab and look at URL), not gif, yet it's animated?

I didn't chime in because you were clearly handling it. I think the OP has a good point that there are some things in the IT arena that can scale down costs dramatically, and it's a fun analogy to encourage people to do the same. But the analogy only goes so far. There's no way that my lunch is going to get 100 times less expensive in the next few years because there's no way to change those economics that dramatically at this point, and I only spend about 25 cents on lunch.

The file extension doesn't dictate what the actual file type is. Since the browser's image engine can display both gifs and jpgs, it doesn't get tripped up by those file extensions. You can actually change file extensions at will. It just makes it harder for you to open some things.

dandarc

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Re: Logarithmic Improvement To An Expense
« Reply #11 on: June 02, 2015, 04:42:33 PM »
Changing the extension doesn't mean it is a jpg.  Save to your computer, open it in Notepad - first 3 letters are GIF.

forummm

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Re: Logarithmic Improvement To An Expense
« Reply #12 on: June 02, 2015, 05:05:24 PM »
With the AI stuff, it's really hard to say anything substantive, accurate, and meaningful. I have actually done AI programming and have taken courses in grad school. But that was awhile ago and much more applied. I have a bunch of Kurzweil's books and other authors on the subject too. I am somewhat skeptical of many of the claims I've seen, including on the waitbutwhy article. It's all extremely fascinating and very cool to think about. But I think we're a lot farther away than some of the hype would dictate. Something like the singularity could still happen in our lifetimes, but I'm skeptical at this point. There's just too much complexity for us to be able to figure out all this stuff. And I don't think Moore's Law will continue to be exponential at the same periodicity that it has been. It's actually slowed down some already. I think it's very reasonable to think and be concerned about the problems that can come along with AI. But it's very hard to justify claims of accuracy about predictions at this point.

I also am skeptical of the claim that people only lived to 18 20,000 years ago. How good are our historical records to be able to accurately tell us that? And does that include infant mortality? If it does, I think that's a questionable metric to use. Yes, improvements in infant mortality are important. But it will really skew the numbers downwards.

arebelspy

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Re: Logarithmic Improvement To An Expense
« Reply #13 on: June 02, 2015, 08:55:25 PM »
The file extension doesn't dictate what the actual file type is. Since the browser's image engine can display both gifs and jpgs, it doesn't get tripped up by those file extensions. You can actually change file extensions at will. It just makes it harder for you to open some things.

Changing the extension doesn't mean it is a jpg.  Save to your computer, open it in Notepad - first 3 letters are GIF.

Learn something new every day.  Thanks!
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forummm

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Re: Logarithmic Improvement To An Expense
« Reply #14 on: June 02, 2015, 09:23:57 PM »
Changing the extension doesn't mean it is a jpg.  Save to your computer, open it in Notepad - first 3 letters are GIF.

You could even save the file to your computer, change the file extension to "txt", and then it will automatically open in Notepad for you when you double click it.

arebelspy

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Re: Logarithmic Improvement To An Expense
« Reply #15 on: June 03, 2015, 09:56:45 AM »
Changing the extension doesn't mean it is a jpg.  Save to your computer, open it in Notepad - first 3 letters are GIF.

You could even save the file to your computer, change the file extension to "txt", and then it will automatically open in Notepad for you when you double click it.

Actually I have all my text files open in adobe acrobat.
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forummm

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Re: Logarithmic Improvement To An Expense
« Reply #16 on: June 04, 2015, 02:04:08 PM »
Changing the extension doesn't mean it is a jpg.  Save to your computer, open it in Notepad - first 3 letters are GIF.

You could even save the file to your computer, change the file extension to "txt", and then it will automatically open in Notepad for you when you double click it.

Actually I have all my text files open in adobe acrobat.

Perhaps something new for you to learn today: you can change what program your txt files (or any files) open in.

Right click on a file of the type you want to change, select "open with" (or move to the "choose default program" if a submenu is available). Then you can browse to any program on your computer and check the "always use this program..." box to set it as the default.

Don't do this wantonly. There isn't much reason to change.

arebelspy

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Re: Logarithmic Improvement To An Expense
« Reply #17 on: June 04, 2015, 03:29:28 PM »
Changing the extension doesn't mean it is a jpg.  Save to your computer, open it in Notepad - first 3 letters are GIF.

You could even save the file to your computer, change the file extension to "txt", and then it will automatically open in Notepad for you when you double click it.

Actually I have all my text files open in adobe acrobat.

Perhaps something new for you to learn today: you can change what program your txt files (or any files) open in.

Right click on a file of the type you want to change, select "open with" (or move to the "choose default program" if a submenu is available). Then you can browse to any program on your computer and check the "always use this program..." box to set it as the default.

Don't do this wantonly. There isn't much reason to change.

Why would you want anything to open in any program except adobe acrobat?  All of my files open in acrobat.

I will admit that watching a movie in pdf format makes my scrolling finger hurt.
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