Here it is. What something costs doesn’t matter – whether you’re rich or poor. What matters is value. To illustrate, I’ll use examples dragged from real life. Your experience may vary.
Which do you think would produce better value: a motel for $22 a night or a five-star hotel at 15 times the price? I can tell you, from experience: the latter. The Mandarin Oriental in Hong Kong was the most expensive hotel I’ve ever stayed in, but by far the best value I ever received. On the flip side, we’ve all bought a bargain that proved to be worthless.
Just to be clear, I’m not saying more expensive is better. In the kitchen, I have a brush for dishes that cost £3 and is worth its weight in gold, whereas someone suggested I buy a $1,000 coffee machine, which I wouldn’t want at any price, being a Nescafé man.
Value is often harder to spot than price. Dinner at my hotel in Cuba was wildly expensive and inedible. The portions at a £200 ($300) dinner at a swank restaurant in London’s West End were so small (nouveau cuisine) that I had to have a sandwich when I got home. Last week, I had breakfast at a café round the corner and it was, for £12 ($18) one of the best meals I’ve ever eaten.
In part, value is learned from experience. That $4,000 Dell laptop I bought never actually worked. The $300 Toshibas I’ve used ever since are just fine (the CD player always breaks first, usually after about six plays. Buy an external CD player, you’re still $3,600 ahead).
Value is variable. You’re at a bookshop, say, and a volume presents itself. You’ve been looking for it for some time. Its value is greater than the next copy of the same book that presents itself will ever be.
Sometimes, value makes itself known instinctively. How often have you estimated the price of something, only to find that you’re close, or right?
We’re talking financial value here. That is a function, to a larger extent than it should be, of emotion. You might spend a lot more on others than you do on yourself. And lots more on a person who, um, needs your attention, and roses, and billing and cooing and what have you.
Emotion, of course, is the kryptonite of value. Go to an auction and see what happens. Quite often, people will bid way over what they meant to limit themselves to; emotion seizes the day. Bidding to beat the other bidder is emotion at work. Gambling well past a pre-set limit; overpaying for shoddy work because the builder is bigger than you; buying clothes you’ll never wear — emotion compromises your true sense of value.
I’m not saying you do all these things. You’re my readers and I love you all, each and every one. You’re probably perfect in every way. That’s why I’m alerting you about emotion and value and all like that: because I care.