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When someone asks me if I've changed my mind yet and now want one of Apple's new iPads, I tell them: "Well, even if I did, I probably wouldn't want to spend $2,000 on one."

They generally looked at me, baffled. "What do you mean, $2,000? I thought they started at $500."

But I figure $2,000 is the minimum that Steve Jobs's new toy is going to cost me.

How come?

Simple. If I don't spend that $500, I'll invest it.

{{:info:finance:ob-nh028_roi_03_d_20110329124638.jpg|[ROI_0329A] EMMANUEL DUNAND/AFP/Getty Images}}

For our columnist, the real cost of this $500 iPad 2 is $2,000.

Historically, the stock market has produced average long-term returns of maybe 5% a year above inflation. (More on this below.)

At that rate, in 10 years' time my $500 will have grown to about $800. That's in today's dollars—after inflation. In 15 years it'll be about $1,000, and in 30 years, $2,000.

I figure I'll be retiring in about 30 years, which is when I'm going to need lots of capital. I can have the iPad now, or about $2,000 then.

Thanks, but I'll take the $2,000.

(If I were younger the iPad would cost me even more. If you're 30 or younger and you just bought one, congratulations: It probably cost you about $3,000.)

Yes, I typically do these mental calculations, at least in the back of my mind, for most things. A "$50" lunch at Morton's really costs $200. A "$5,000" trip to Bali: $20,000. And so on. It tends to cut down on the spending. I typically come back from the mall with no bags, gleefully clutching my future millions. (Warren Buffett, as Jason Zweig reminded us over the weekend, takes a similar view.)
[ROI_0329C] SONNY TUMBELAKA/AFP/Getty Images

The real cost of a $5,000 vacation in Bali could be $20,000.

As you can imagine, I get some funny looks when I tell people how I think. But, oddly, a lot of people go further. They get defensive, or angry, or downright hostile. "Oh, that's just absolutely ridiculous," they say, glaring.

But is it?

I'd argue it's the conventional, "here and how" thinking about money that's ridiculous. And that the sticker price on each item—the "$500" iPad and so on—is grossly misleading.

It doesn't reflect the fundamental truth about our lives: We're short of capital.

Maybe not today, or this year or even this decade. But if you're like most people, you're going to have less money over the course of your life than you would like. The average 65-year-old is going to live another 20 years so after retiring, and many people will live for 30 or more.

So, one way or another, you are already rationing your capital across your lifespan, whether you realize it or not.

[0329mortons] Joshua Roberts/Bloomberg News

The real cost of a $50 lunch at Morton's could be $200.

If you choose to spend a dollar today, you are actively choosing not to have four dollars, or six, or even eight later.

For someone age 40, each dollar you spend is actually costing you about $4. Even if you're in your mid-50s, each dollar you spend is actually taking about $2 out of your retirement fund.

And for somebody age 20, for whom the money can grow for at least 45 years, each dollar is actually costing you nine.

This is real.

I've had a lot of reader response after writing last week about the scary math of retirement.

Tens of millions of Americans have saved too little to retire in comfort. Just to provide an income of $1,000 a year in retirement, you'll probably need to save about $20,000. Someone who wants their savings to provide them with just $25,000 a year in retirement is going to need about half a million dollars, and you can do the math from there.

The reality? Fewer than half of all workers have set aside even $25,000. Forty-six percent have less than $10,000. And just 59% are currently saving for their retirement at all.

Even when you factor in the value of home equity, most people are falling a long way short of where they want to be. The consequences are going to be grim.

In the circumstances, I like to think in a way that balances present wants and future needs. Sure, I can go out for lunch. But I should be aware of what I won't have as a result.

It's a balance. I don't want to die poor, and I don't want to live miserably and die rich either.

When I point out how much people are raiding from their retirement accounts in order to spend today, some people question the numbers.

I'll concede you might not get a real return of 5%, the historic average, from equities at today's prices. The stock market seems pretty expensive by some measures.

But even at, say, 4%, money doubles in less than 20 years and triples in less than 30. A 30-year-old is still spending at least $2,000 of his retirement stash on his $499 iPad 2.

And even if the market is expensive now, it will presumably offer better value at some point in the future. That would generate better opportunities for even higher returns. Those who invested during the crash two years ago have made big bucks.

And in some ways, my numbers actually understate the true cost of the money we spend today.

First, a lot of people aren't even maxing out their 401(k) and individual retirement account contributions each year. So they're missing out on tax breaks, and maybe a company match, as well. For someone in that position, their new iPad didn't just cost them $2,000 or $3,000. It may have cost them thousands more.

Second, I'm just looking at the compound returns up until the age of 65 or 70. In truth the capital you have then should continue to grow, even if at a lower rate. So the true cost of things may be even higher.

And there's a third issue.

So far, I've only talked about the calculations for one-off expenses.

Many of our bills are recurring, monthly expenses. Like a cellphone. Or cable. Or car-lease payments.

And when you run the same calculations on recurring costs, the figures go parabolic.

That $100 cable bill? Over 20 years, when you factor in the lost investment returns, that's going to cost you about $40,000. Over 30 years, about $80,000.

And over 35 years, $100,000.

Think of it as a factor of 1,000.

That $400 monthly car lease: $400,000. A $50 cellphone bill: $50,000.

Yikes. No surprise that I don't have a personal cellphone. Or premium cable.

As for the iPad? I don't need one anyway. I've been pleasantly surprised by my "UnPad," my hacked NookColor. I turned it into an Android Tablet only as an experiment, but it's turned out to be much better than I expected.

Runs loads of Android apps, fits in my coat pocket. And, unlike Mr. Jobs's marvel, it only cost me $800.

That's $200 on the sticker, and $600 in lost interest. What a deal!