THE THEORY OF INTEREST

securities, machinery, or real estate, or what we put intothe savings bank. The domestic threshold is, in general,a pretty good line of division. The cost of almost everyobject which crosses it measures a portion of our realincome, and few other expenditures do.

Thus, at the end of production economics, or businesseconomics, we find home economics It is the housekeeper,the woman who spends, who takes the final steps throughthe cost of living toward getting the real income of thefamily, so that the family’s enjoyment income may fol-low.

§6. Money Income

We have just been dealing with money payments forconsumption goods, or money outgo. We may now goback one further step to money received by the individ-ual spender, or money income. Money income includes allmoney received which is not obviously, and in the natureof the case, to be devoted to reinvestment—or, as theexpression is, “earmarked” for reinvestment. In otherwords, all money received and readily available and in-tended to be used for spending is money income. Itsometimes differs from real income considerably. Forinstance, if you more than “earn your living” of $6,000with a salary of $10,000, you voluntarily put by the $4,-000 remaining as savings. This part of your money incomeis saved from being turned immediately into real income.That is, instead of spending all your salary for this year’sliving you invest $4,000 of it to help toward the cost ofliving of future years. And so, the $4,000 is not onlycredited as income but debited as outgo. With it you buydurable objects such as land or buildings, or part rightsin these, such as stocks or bonds. Your money income is

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