Day 152: On the Future Value of Money
If an item was listed at fifty dollars, consider the potential value of that same fifty dollars after it has been invested for twenty years. Ask, “Is this item worth $250?” If it’s worth $250 to you today, then it’s worth buying.
Money has present and future value. At the very moment, 50 bucks is 50 bucks. However, when invested over a long period of time (with a rate or return that exceeds inflation) , it can grow several times or more.
If you’re struggling to maintain self-discipline with your finances, use Darren Hardy’s mind trick to reduce the number of unnecessary purchases and assume that each purchase costs you five times more over the long term.
Alternatively, think of any purchase as hours of your work. 50 bucks is just a number that has little, if any, emotional charge. How about two or three hours of your life? Would you buy this new trinket with two or three hours of your time, instead of paying with a $50 bill? What if it’s actually the same thing as losing fifteen hours of your life over the long run? Is it still worth it?