The value of money is subjective, depending on age. At the age of one, one multiplies the actual sum by 145, 000, making one pound seem like 145, 000 pounds to a one-year-old. At seven — Bertie’s age — the multiplier is 24, so that five pounds seems like 120 pounds. At the age of twenty four, five pounds is five pounds; at forty five it is divided by 5, so that it seems like one pound and one pound seems like twenty pence. (All figures courtesy of Scottish Government Advice Leaflet: Handling your Money.) . Alexander McCall Smith
About This Quote

This quote is about how value of money changes as you get older. This idea that value of money changes as you get older is a common theme in economic theory. The best example is the experience, or utility, function. This function shows how money impacts different areas of your life as you get older.

In this example, it shows that as you get older, your utility from each pound decreases as age increases. The first year of life, one pound is equal to 145,000 pounds. The first year of life seems like 145,000 pounds because a one-year-old has a very limited amount of things to spend their money on.

However, at age one a one-year-old will have a lot more interests and can buy a lot more things with their money. At age seven, buying five pounds seems like 120 pounds because the child has outgrown the one-year-old stage and has become more capable and mature. However, at age forty five buying five pounds seems like five pounds because at this point in time the child has spent all their money on other things and has nothing left to buy things with.

Source: Berties Guide To Life And Mothers

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