What is the value of wealth?
In my estimation, money can buy your 4 different things:
- Stuff
- Services
- Time
- Options
Stuff is the most obvious of these. Money can buy you that new Sony Xperia Phone, that new MacBook Pro, that fancy new car, or high brand clothes. Material things in general tend to lose value quickly, and we usually grow bored of them more quickly than we think we will.
Services could be anything from insurance on that fancy car, a flight to Paris, lodging and a lift ticket for your ski trip, or something like a hair cut or medical care.
What about time? Well, this usually comes about from buying things or services that save you time. For example, you can buy a washing machine, a dishwasher, or a robot vacuum cleaner. All will do some labor for you that would have taken you time and effort. Something like a trip to the barber might be along the same lines. People with higher incomes tend to spend more on this type of thing because their time may be a lot more valuable. For example, if you are an independent attorney you might well rather spend an extra hour on a case where you can bill 10,000 yen for that hour as opposed to spending it hand washing clothes in the bath tub - which you probably aren't particularly good at anyway.
Options, or flexibility, is probably the most overlooked category. If you decide to forgo spending money on that fancy car now, it opens up the possibility that you could buy an even fancier car later - or a fancy car and a new coffee machine, or pay for a down payment on a new house, or be more generous with your friends and family. Knowing that they have options also tends to give people peace of mind.
If you spend all of your income as soon as you make it, you can buy all the material stuff and services you want, but you will forever be lacking options.