Summary: Is there demand for writing posts about this aspect of decision-making?
And of course, is there offer? Because I didn't see any post about it.
Topics I intended to cover include:
- How much is worth 100$ in few years? Why? Why is it useful?
- Risk-return relationship.
- How is it useful in life outside finance?
And topic I would like, but I am not sure if i should cover:
- How can we apply it to death? (in sense, should I live a happy life or struggle to live endlessly?)
I found that missing in decision analysis, and I think it is very important thing to know, since we don't always choose between "I take A" or "I take B", but also between "I take A" or "I take B in two years", or "should i give A to gain B every year next 100 years?"
Why not simply redirect to some other source?
Well, that can be done either way, but I thought clear basics would not harm and would be useful to people who want to invest less time in it.
The topic is interesting, but I hope you will write something non-trivial. Sorry for unspecific advice, but this is how it is. I guess I could be more specific about what I consider trivial. Something like this:
"There is uncertainty, therefore $100 one year later is only worth r × $100 now, where r is the discount rate, a number between 0 and 1. Two years later, it's r^2 × $100, etc. Similarly, a cake one year later is worth r cakes now. If we make an infinite sum 1 + r + r^2 + ..., the result is finite, therefore immortality doesn't have infinite value." -- This alone probably wouldn't provide any value to most readers.
If you can say more than this, I'd like to hear it. Also, please don't split it to multiple articles; and if you really have to, then please put something interesting in the first article already, don't make it merely a teaser.
Well, I do have to start there, but, actually, i wanted to go different way. I will argue that immortality has different value given the different information and preferences we have.
(Because, it's not 1 + r + r^2... it's v(0) + v(1) r + v(2) r^2 +.... where vx is value we obtain in x-th year of our life. This can converge or diverge, it is dependent on our evaluation of v's and ofc. r.)
Thank you for advice, I will give my best to make it short and interesting. Though not at cost of making it unclear and therefore useless.
We do not have constant utility functions, so infinite limits with respect to time are not actually that interesting.
Ok, this thing is harder then it looked. Writing demands time and concentration, and I am not sure if i can explain things as good as they were explained to me.
I am absolutely sure it would be highly beneficial for people to understand basics of economics and finance, but I think I am not the right person to do this. So, I give up, and I will just recommend some literature/video lessons. I think i saw some book list on this forum, so, if you want to hear more about this stuff, head there.
I would be interested. been going through thoughts of values of 100$ over time myself.
I am very interested. There is the extremely early retirement community and I am trying to figure out what of their advice I can incorporate in my life. I don't have to necessarily retire at 35 but having the option would be nice. Or supplement my income with interest on capital. Fundamentals like these can help to make these kind of decisions.