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@danluu I don't think the poverty trap comes from having to, for instance, buy new boots frequently. In absolute terms, clearly poor people spend less than rich. But as a percentage of your available income, people spend more (eg they can't save). For me the classic example is banking -- if you're using a check-cashing service instead of a bank 1) you're checks are a lot smaller than most people with banks and 2) you're getting charged fees on top of that people in banks aren't.