I get that the value of money depreciates over time hence why they tell you that the best time to invest is now. But i don’t get how exactly investing now helps you in the future if the cost of living increases with time too anyway. So like let’s say you invested $1000 today and then in the future that’s equivalent to $4250, but then the price of things have also increased so how much richer are you really if you have to spend a lot more in the future anyway?
In: 64
I’ll try to make it a real ELI5:
Say I offer to buy you ice cream, but I give you two options:
1-You can have $10’s worth of ice cream today.
2-You can have $10’s worth of ice cream tomorrow.
You’ll always choose the first option because waiting sucks and ice cream is tasty. Time you spend waiting for the ice cream is time you’re not enjoy it.
So the only way for me to make you choose the ice cream tomorrow is to offer you less today or more tomorrow.
That in a nutshell, is the time value of ice cream, I mean money.
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