Hyperbolic discounting – Given two similar rewards, humans show a preference for one that arrives sooner rather than later.
Would you rather have $50 today or $52 in a week? Most people would rather have the $50 even though the $52 would be the equivalent of earning 200 percent interest annually. Wow. Would you not want that interest rate?
This explains a lot of things like drug addiction to retirement. If I change the question around, ‘would you rather have $52 in a week or $50 now?’ now if feels like we are losing $2
Instant gratification seems to be the norm these days. Maybe that is the reason some many do not have enough money for retirement. If you are like me, I have to do more planning and less instant gratification.