Posted by tecwrg on 6/16/2014 11:56:00 AM (view original):
I've never been in a position where the money I earn today has less value than the money I earned last week, last month, or last year.
And I'm not going to be so presumptuous as to assume that others are indeed in that position, or to determine "Yeah, you have enough money. Let's take some of it away".
So no, I don't agree.
Maybe it's on me for not explaining it well enough, but you not understanding doesn't make it less real.
The shift is easiest to see at astronomical incomes. If you made $100 million a year, making another $5,000 probably doesn't do anything for you. It doesn't change your standard of living at all. That $5,000 has an extremely low marginal utility for you.
Obviously, at incomes most of us make, the shift is much more subtle. Instead of thinking of "first dollar" as money earned in January and "last dollar" as money earned in December, think of it as how you prioritize your budget. "First dollar" is what you use to buy what you absolutely have to have. "Last dollar" is what you use to buy* your least important thing.
*For the sake of this discussion, consider savings as "buying" something that falls somewhere on the list of priorities depending on the person.