[nostrademons]

It's possible to avoid this by having separate buckets for consumption and savings. Hold your consumption bucket constant (some people call this "budgeting", but it could be done more informally), and all the excess cash you're making, by definition, will go into investments. Then you just have to learn how to invest prudently. :-)

GP is talking about the investment side of this, where "investing prudently" usually means looking at the relative prices of different investments and putting your money only into the ones that are undervalued. If enough people do this, a.) relative prices approach a pretty good approximation of their true value, and b.) those prices are going to be much higher when a lot of cash went into savings than if there's not much cash going into savings.

[pontifier]

Oh I invested most of it, and now I don't have all that cash anymore. I have assets instead. I'm back where I can worry about spending a few bucks on something minor.