The Future of Money

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One of the ways I go about my financial pursuits is of course through saving and investing. The key here is how I think about my money in terms of its real value. Is $1 worth a dollar? That seems like an odd question to ask, right? I mean, sure it is if you only see money one way. As something to spend. When I think of a dollar, I think of it in terms of its potential future value, as opposed to its face value. And that helps me to better determine what to do with it. For example, I know that I can easily earn at least 6% on any dollar saved and invested. The real number is much higher, but 6% is just a good go-to number I know at minimum, my money will generate. Essentially, $1 spent, in my mind, has no real value. It's worth $0 after I spend it. But if I save it, it is worth at least $1.06. I might ask myself a simple question. "If I spend $100 a week on groceries, how much money do I need to save so that eventually, my groceries are forever paid for, and I never have to earn more money from a paycheck to buy them?" The answer, of course, is about $87,000 because at 6% that will generate $5,220 a year in dividends and interest. The point is not really to actually have my investments pay for my groceries. And getting to that saved amount can be tough. The point is to understand how I can make the value of my money greater than its face value, and how I can better use it to my advantage? The term I like to use is income replacement. The ultimate goal is to eventually replace my paycheck. You ask a simple question. "How much do I need to meet my needs in a year?" If that answer is $40,000, then my savings goal should be about $670,000 since that will generate $40,200 a year at 6%. Thinking about the future value of money as opposed to its face value helps us put the real value of money into better perspective. "I want to spend $50 on this thing I want or need, how much can I save so that the $50 I want to spend covers itself?" The answer is $835 because at 6%, that amount will generate $50.10. When it comes to having or wanting more money, sure, I can think about selling things like arts or crafts, or getting a second job, or doing surveys and gaming or whatever other thing. And I can still do all those things, and actually should do them. But I'd rather those second and third and fourth and whatever additional incomes be gravy. Not necessity just to meet my needs. When I can save my money in a way that it now works for me, I no longer have to work for it.