Introduction
Suppose you were given one million dollars. Would you choose to receive it at the age of 20 or at the age of 80?
Many people might choose to receive it at 20. This is because having money at a young age allows you to invest in experiences and skills, and engage in long-term asset management—thereby expanding the range of possibilities available to you.
On the other hand, considering that expenses such as healthcare tend to increase with age in order to maintain quality of life, some might argue that receiving money at an older age is more necessary.
In other words, the value of money depends on when you have it and your individual circumstances.
So, should we be saving money, or should we spend it now?
And which should take priority: time or money?
1. The Longer You Have to Use Money, the More Valuable It Is
The value of money is determined by what you can do with it. For example, if you were to receive $10,000 in your 20s, you would have various possibilities, such as:
Traveling the world while you're healthy
Experiencing long-term travel at a young age can enhance cultural understanding and personal growth, potentially having a profound impact on the rest of your life.Learning new skills, gaining experience, and expanding your career
Learning new things and gaining experience for career growth can become more difficult as you get older. That’s why it’s important to take on challenges while you’re still young, energetic, and full of potential.Building connections and increasing future opportunities
Your younger years are the perfect time to meet diverse people and build networks that could become valuable assets for your future business and life.
On the other hand, if you were to receive one million dollars at the age of 80, declining physical strength and a reduced desire for new challenges may make it difficult to fully utilize that money.
In other words, money holds greater value when you have more time to use it—which is why it is most valuable when you're young.
2. Over Time, the Value of Time Increases While the Value of Money Decreases
💡 The Value of Time Increases with Age
The value of time is not simply about the ticking of the clock—it is determined by how meaningfully that time can be used. As we age, the relative value of each passing year increases.
This happens because we become more aware of the finite nature of time.
🔹 Janet's Law: The Perception of Time Shortens Over Life
French philosopher Paul Janet proposed that our perception of time is determined by the proportion of time we have already lived:
- For a 10-year-old child, one year is 1/10 of their life → Feels very long
- For a 50-year-old adult, one year is 1/50 of their life → Feels relatively short
Because of this, time seems to accelerate as we age, making each day feel more valuable.
💰 The Value of Money Decreases with Age
On the other hand, the value of money tends to decline over time. Here, value does not refer to its numerical worth but rather its potential and the range of possibilities it provides.
As we grow older, we have fewer opportunities and less time to use money, which reduces its relative value.
🔹 Life-Cycle Hypothesis of Consumption Preferences
In the 1950s, economists Franco Modigliani and Richard Brumberg introduced the "Life-Cycle Hypothesis," which suggests that people balance income and consumption throughout their lifetime.
According to this theory:
- In youth, people spend time earning money while limiting consumption to increase savings.
- In middle age, income peaks, and consumption also rises.
- In old age, income declines, and people start spending their savings.
This means that young people tend to focus on saving for the future, while older people enter a phase of spending their savings.
Describing this as a "decline in value" may be an oversimplification. However, money spent in youth often expands possibilities and encourages new challenges, while money spent in old age is more focused on maintaining health and stability rather than creating new opportunities.
Of course, these are general trends and can vary based on individual lifestyles and values.
Still, the idea that "when you use money" affects its value and impact is an important perspective to consider.
3. How Should You Spend Money When You're Young?
If spending money at a young age can create greater value, what is the ideal way to use it?
Rather than simply wasting it, it’s important to think about how to use money to expand future possibilities.
Here are three key ways to spend money wisely when you're young.
1. Invest in Experiences
Spending money on travel, studying abroad, and new experiences can broaden your perspective and increase your life choices.
When you're young, you have the flexibility to recover from failures, so you should actively take on new challenges.
For example:
- Traveling abroad or participating in international volunteer programs to experience different cultures
- Pursuing specialized knowledge through education or study abroad programs
- Attending events and seminars to expand your network
These experiences can provide value beyond just money.
2. Acquire Skills and Knowledge
Money can be lost and regained, but the knowledge and skills you acquire become lifelong assets.
When you are young, you can learn more efficiently and adapt easily to new fields, making self-investment a wise use of money.
Specific examples include:
- Developing specialized skills (e.g., programming, design, marketing)
- Learning foreign languages
- Obtaining certifications or professional training
These investments can lead to higher income in the future, ultimately providing greater financial freedom.
3. Build Meaningful Connections
Good relationships hold value that money cannot buy.
Connections made at a young age often lead to career and business opportunities later in life.
For example:
- Attending industry networking events and study groups
- Seeking opportunities to meet and learn from respected mentors
- Actively participating in communities and clubs
While the benefits may not be immediately visible, these connections can become valuable assets in the future.
Rather than just saving money, it's important to spend it in ways that expand your future choices.
Of course, it's also essential to maintain a balance between spending, saving, and investing wisely.
However, spending money on "things you can only do now" can significantly broaden your future possibilities.
Conclusion
The idea of "earning money first and then living freely" may overlook the importance of the time you have to use it.
No matter how much wealth you accumulate, you cannot buy more time.
However, what you should do when you're young and how you should use your money—these answers will vary depending on your personal background and circumstances.
I don’t believe there is a single correct answer.
What I do believe is that thinking about this question early in life is crucial.
How will you choose to spend your money now?
How will you make the most of your time?
Don’t just focus on the future—be mindful of the value of this very moment and take action.