I'm sorry, but this was making me really angry for no reason whatsoever and I need to suck all the fun out of it
Scenario Breakdown:
Initial Contribution:
You put $20 in the box.
I put $20 in the box.
Total in the box: $40.
Transaction:
You sell me the box for $30.
I give you $30.
Analyzing the Transaction:
Before the Sale:
You:
You have $20 less because you put it in the box.
Your balance: -$20.
Me:
I have $20 less because I put it in the box.
My balance: -$20.
During the Sale:
You:
You receive $30 from me.
Your balance: $30 - $20 (initial contribution) = $10 profit (so far).
Me:
I give you $30.
My balance: -$20 (initial contribution) - $30 = -$50.
However, I now own the box which contains $40.
After the Sale:
You:
You have $30 (received from me) but you initially put in $20.
Your net profit: $30 (from sale) - $20 (initial contribution) = $10 profit.
Me:
I have the box with $40 in it, but I spent $30 to buy it.
Net balance: $40 (in the box) - $30 (paid to you) - $20 (initial contribution) = -$10.
Conclusion:
You indeed made a $10 profit.
However, I did not make a profit. I actually have a net loss of $10.
Misconception:
The statement "we both make a $10 profit" is incorrect. Here's why:
Your Perspective:
You received $30 for the box and initially invested $20.
Your net profit is $10.
My Perspective:
I now have the box with $40 in it.
I spent $30 to buy the box and initially invested $20.
My net balance is actually a $10 loss (not a profit).
I probably just made a 30 minute rant for nothing. Either way, if you read all of this, congratulations.
