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BEHAVIORAL ECONOMISTS tell us that we’ll get more satisfaction if we spend our dollars on experiences rather than on purchasing possessions. But what if the purchase allows us to have an experience? Buying a bike, for instance, allows me to take a ride with my sons.
That raises the question: How much do we need to spend on equipment to get the maximum benefit from an experience? I got a glimpse of the answer to that question several years ago as I was walking out of the office on a Friday.
The company’s lab director was leaving a little early, as was I. We talked a bit about our weekend plans. He and his wife were heading to Minnesota’s Boundary Waters for a weekend of canoeing. I was taking my sons and a group of Boy Scouts canoeing in a similar area.
It struck me that the lab director was transporting his Kevlar canoe using his new Lexus, while I was taking a factory seconds rotomolded canoe on top of my 10-year-old Chevy. But we would both be sleeping under the exact same summer sky. We would each hear the laugh of loons on the lake in the morning. We would each enjoy the company of our companions.
To have an experience, there’s some sum of money that needs to be spent on things. But once the basics are covered, there’s sharply diminishing returns on the additional dollars spent.
>> BEHAVIORAL ECONOMISTS tell us that we’ll get more satisfaction if we spend our dollars on experiences rather than on purchasing possessions. But what if the purchase allows us to have an experience?
Great point. I see this absolute and unqualified declaration made by financial advisors (on blogs at least) all the time. But the truth is it’s a slogan that would lead to disappointment and disillusionment every bit as much as chasing things or anything else without balance. Moderation is the key, of course judged only from the spender’s perspective not others.
Not sure why the piece has confused so many. The point seems clear enough from the opening statement. And as with things, it also points out that thinking about getting the experience you want for less is a good idea all things begin equal.
Sorry, but I don’t understand the “down votes” here. If someone receives enjoyment from whatever it may be versus some hair shirt, virtue-signaling sacrifice on the altar of moral superiority, then more power to them. The oligarch’s $300 million yacht required hundreds of craftsmen to make and a large crew to sail, and huge amounts of fuel requiring even more jobs, so how can you denigrate that purchase?
Sorry for the confusion. I was not implying that I disagreed with my co-workers purchases. It is his money, and he can spend it as he sees fit. While I have no desire for a luxury vehicle, I am sure that some of the things I spend my money on are not in ways that my co-work would choose to spend his money.
(This from the author Kenyon Sayler, who’s g-mail account uses my first name, David)
My comment was supposed to be a “Reply” to R. Quinn’s comment which at the time I saw it had 5 down votes which is what prompted my response. I do believe you are entitled to your opinion, one here that I found interesting enough to read the comments it generated. I have no idea why my reply comment came out as a primary comment and I apologize that it happened in such a way that unfortunately targeted you. And, btw, I “get” your excellent point about the importance of the experience.
Regarding “To have an experience, there’s some sum of money that needs to be spent on things. But once the basics are covered, there’s sharply diminishing returns on the additional dollars spent”:
This is true for many folks. But not true for aspiring and high level enthusiasts. Such people require higher level equipment (bikes, golf clubs, surfboards … ) to challenge themselves to reach their potential or desired fitness level.
And then there is the person who builds their own kayak.
It’s smart to consider what’s essential to an enjoyable experience. I’m happy to stay in inexpensive state park cabins for most vacations, enjoying quiet walks on nature trials and exploring local historic sites. But every 3-4 years, a friend and I splurge on a city weekend. We book first class airfare, luxury hotels, first row seats for theatre and symphony, excellent restaurants. It’s a pleasant contrast to my usual modest life style.
I can’t argue with you, but I think there can be more to it. That guy in the Lexus is me in a Mercedes. There is no logical reason that car is needed, but buying it or having the ability to do may be a persons measure of success or meeting a goal for reasons others may not understand. That is assuming the person can truly afford the purchase and is not just feeding their ego and doesn’t take from other necessary spending.
I didn’t mean to imply that I object to my coworker having a Lexus. He is entitled to spend his money as he chooses. I personally don’t value a luxury vehicle. That is fine. I am sure that I spend some of my money in ways that my coworker would not choose.
Richard, to clarify, David Sayler is the author Kenyon Sayler. I usually go by my middle name, Kenyon. But my g-mail account that I log on through is in my first name, David.