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We have invented money, but what is 1000$ really and how can I tell if I can afford something that costs 1000$? Because I get a loan for 1000$? Because I have 1
by UweSchmidt 8y ago
We have invented money, but what is 1000$ really and how can I tell if I can afford something that costs 1000$? Because I get a loan for 1000$? Because I have 1001$ in my account? What is a fair price for a phone anyway, and how am I influenced by marketing and by the people around me, by emotions?
Equating time to money is just a small start for 'feeling' the true cost of an expense, and is just a small part of understanding and managing one's finances.
- dsr_ 8y agoWhat is $1000? It's an entire month of work at minimum wage in the USA after taxes. It's about two weeks of minimum wage work in Australia. It's a year of minimum wage work for the government in Afghanistan. It's less than a week of after-tax wages for an average US welder or a Massachusetts high school teacher. It's two weeks of after-tax wages for a high school teacher in Oklahoma. It's the monthly rent of a two bedroom apartment in Phoenix. It's less than two weeks' rent of a one bedroom in New York City, and less than one week of a one bedroom in Manhattan. And that's why we use money to account for these things.
- YayamiOmate 8y agoThat only tells you whether minimum wage people can afford things. What does it matter to me if some folk have to work for a week for a premium steak? Why would a football player care that he earns in a day yearly wage? People buy things based on whether they themselves can afford it, not others. It's nice to appreciate your wealth compared to others but i doubt if anyone makes purchase decisions based on other people salary.