That's not what I meant. I was just repeating a statement in a fascinating new book called Numbers Rule.
The statement meant that money is not equally valuable to people. For example:
- If you have 3 dollars, one more dollar increases your wealth dramatically (is it 25% increased? or 33%?)
- If you have 300,000 dollars, one additional dollar makes very little difference to your wealth or purchasing options.
- if you have only one dollar, the next dollar is worth 0.3, which I think means it increases your purchasing options about a third more than just having $1.00
- if you have a million dollars, the next dollar is worth 0.0000004, meaning it does virtually nothing for your purchasing options
OK. Enough history. Taking this subject, and looking back at yesterday's blog on Billionaires donating their fortunes to charity, does this dollar is not always worth a dollar principle mean that they don't feel the pain of giving up their dough?
I'm not sure that it does. Perhaps if you learn to give when you have a little (the working poor), you find it easy to keep on giving when you have a lot. And alternatively, perhaps if you begrudge giving when you have a little, you will rarely want to give a large amount, even if you have a large bank balance. My grandfather was a wealthy man but he definitely didn't like sharing ... or donating.
I'm sure the mathematics of generousity have been well studied and we won't add to this today with our elementary math blog.
And we don't have to get into a lot of math to know that the dollar goes up and down against other currencies. Here's the graph of the dollar against the euro for the past 6 months.
Q1. During what month on the chart would the accountant's dollars had the most value compared to the euro?