Do you think the personal value of money decreases as you get older?

Question

Like when your younger like seven, one hundred dollars could buy so many things, but as you get older you barely flutter an eyelid, because you have to provide for yourself, and the things you want are more expensive, you understand the concept of having a job, paying the bills and buying a house. Than suddenely winning a million dollars doesn't seem like such a big deal, because you know your going to be taxed alot, you have bills and mortages to pay for, and in the end there isn't that much left, not even enough to retire on.

Your thoughts?

Answer 1

As I understand your question, the "personal value of money," as you put it, depends less on the effect of inflation, and more on personal financial responsibility. In your example, the seven year-old child will think solely in terms of what she wants for her own pleasure, without considering how her role will change as life goes on; so, if she is normal in such respects, a hundred dollars will buy many CDs, videos, etc., with nothing having to be set aside for her future as an adult, a wife, mother, breadwinner. But when she reaches that point in life, the demands and responsibilities exist (remember, I'm speaking of normal circumstances), so that whatever the amount, it is not all for her, for the fun things that occupied her thought when she was a child. I would also like to point out that if and when such a person has enough to meet her wants and needs, the excess amount she may possess will not help her finally reach a point of financial stability, but have less personal value because it is in excess of what she actually needs. (For someone who, as an adult, is still deprived of what we think of as necessities, the situation is obviously different, and will remain so until the time - if it ever comes - when she has enough to meet her needs.)

Answer 2

Hi, I'm Sean Toh from Singapore. What you said is very true. This is what I called the silent killer of your money - Inflation. The same amount of money worth less and can't really buy the same things when it is used to be. Most people do not know that this silent killer and most would put their money in the saving account giving them a very low interest. Although their money do compound and give them return, but not forgetting that the inflation is two or three times higher than the interest rate from the bank. Hence, they are not earning enough money by putting it in the bank. Instead, the banks are smarter than them. They asked them to deposit their money with the banks and they use their money to generate return of 20-30% of the principle sum of money their clients put in and they pay their clients the 2-3 % interest. Most people do not see this picture because nobody talk about money at home or in school. Very seldom. Hence, we are at a losing end. Start educating yourself on your financial matters and don't let others take advantage of you just because they think that this is an area you might not be aware of. Start treating your bank account as just a temporary warehouse where the money will be transported out of the warehouse to do some work for you and bring back more bags of money. When they are back into the warehouse, they are ready to go out again to bring back even more money. I hope this answer is of help to you. Click the links below to find out more.

Yours Sincerely
Sean Toh
Author of Four Steps To Financial Freedom

Answer 3

Yes you have to figure in inflation when planning for your retirement. Most of us work till we are 65 and we can see how much we will need to live for the next 10 years or so till we reach our life expectancy. We need to save and have retirement plans through our employment supplemented with social security . Avoid the get rich quick schemes and just make a steady committed effort to live on less than you earn and you will be well set up for your retirement even taking inflation into account.

Answer 4

You are supposed to buy a house BEFORE you win a million.

You could erase your energy bill if you buy a few solar panels (They cost just a few hundreds of dollars)

You could reduce your water bill if you use your used water from the shower to fill your water cooler. (They cost just a few hundreds of dollars)

You could use peerflix.com instead of going to your local Blockbuster.

Answer 5

yes value of money decrease as we get older this is due to economical phenomena known as "Inflation" which is depends on the gross product index.this is differ country to country that's why value of the currency of all countries are not equal.