(Disclaimer: I’m no economist. I simply find this story/concept interesting and want to share it)
If you initially have $2000 cash and you buy yourself a new smartphone (or any other good). Let’s say it costs you $1000.
So, after your buying:
– You have $1000 left
– Seller have $1000 revenue
– You have a good (i.e. the phone) worth $1000.
Thus your initial $2000 is split into 3 pieces which in total worth $3000.
In conclusion: your consumption increases the wealth of you and the seller in particular, and society in general!
Updated 11 Sept 2021: Of course, the extra $1000 came from somewhere. It’s the $ price-value of the good transfered from the seller. Its actual value in the seller’s book was likely lower since he/she would prefer to sell it at a profit. So, in retrospect, your consumption has turned the original $2000 and the seller’s phone (worth less than $1000) to a solid $3000 by realizing the seller’s profit. At least that how these figure will appear in accounting paper!