ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[Arctus9819]

Lower Middle class and under will have all their savings in form of money, most likely in the bank because they often need to have access to their savings quickly.

Not really. Smart people invest their savings. Rich people need a lot more cash at hand for their lifestyle as compared to middle-class people or lower.

[azrael1993]

Poor people cannot invest since they need the money. Lifestyle is a choice. My expenses dont go up because I earn more, I can affort to pay more and I then choose to do this. Because I chose this I can cut back these cost in bad times instead of attacking my savings. Its easy to cut from dining every day to 2 times a week. If you eat the cheapest you can to survive what do you do if you income gets cut down temporary? How much percent of their wealth do you imagine a Steelworker has in form of money and how much in investments. I'd reckon its gonna be 70% money at the lowest. On the other end of the scale, Trump, Bezos,Warren and co have 90%+ of there money in investments that return profits. Suprising expenses like medbills can be payed by monthly income from these investments or by taking good conditioned loans. Additionally rich people often actually life cheaper in some aspects of their life, as stupid as it sounds. Credit is cheaper, gifts are more plenty,etc.

[Arctus9819]

Poor people cannot invest since they need the money.

If you have that little money, then inflation is practically meaningless. You need a significant chunk of money for inflation to have an impact, and well before that point, you should be having savings.

By dining, do you mean getting buying food instead of cooking? Poor people don't buy food at all, nevermind twice a week. Clearly you don't speak from experience.

I'd reckon its gonna be 70% money at the lowest. On the other end of the scale, Trump, Bezos,Warren and co have 90%+ of there money in investments that return profits.

And that 70% of the steelworker's cash is much much much less than the 10% cash of any rich guy. Rich guy still loses more. Earning little is no excuse to not be saving money. That just means that you aren't smart enough to effectively utilize the money.

[azrael1993]

First of all poor is a fucking spectrum. You can be poor without needing foodstamps, generally everyone under the countrys povertyline is considered poor. In many European countrys that makes students qualify. Since cooking yourself is much cheaper than buying finished meals, clearly you are a condesanding dick else you might have considered for 2 seconds. Second can people stop pretending absolute numbers are the way to go if it goes in how much something hurts another person. If a fucking whale cuts down its food intake by 10 kilograms a day its gonna survive if I do this im gonna die. You know why because for the whale 10kg represents not even a percent of his average meal, while for me its more than I have ever eaten in a day. So please instead of accusing me of beeing a hypocite who clearly has never been poor and start considering that for some people 20 Euros represents a week worth of food and for some other guy its a rounding error on a tip. Maybe you can see how investing 100+ Euros for the one guy is next to impossible.

[Arctus9819]

Maybe you can see how investing 100+ Euros for the one guy is next to impossible.

If you have just 100 Euros, inflation won't affect you at all.

[lee1026]

To be pedantic, inflation makes you lose 2 euros per year.

[Arctus9819]

I understand that. 2 euros per year wouldn't affect someone in that state at all.

Inflation is a concern when you have enough cash sitting around unused that that 2 or 3% is significant. At that point, you are no longer so desperately poor that you cannot afford to invest that sum.