How much thought and consideration do you put into buying a 50p chocolate bar? Probably not very much I would imagine. 50p is nothing these days. If there's some chocolate in front of you, and you feel like eating a bar, you just buy it without thinking too much about it. 50p is impulse buy price.
What about something that is £1?
I guess you might stop and think for a second, but then just go ahead and buy whatever it was without too much concern. Let's say you'd make twice as much consideration spending a pound than you would spending 50p.
What about £5?
Now we're talking proper money. £5 is a note. You'd probably stop and think, do I really need/want this? It makes sense that you spend 5 times as much effort considering a £5 purchase as you would a £1 purchase.
What about £50?
That's a considerable purchase. Would you say it's worth 10 times more consideration that the £5 purchase?
What about buying a car though? Let's say £10,000.
Would you make 10,000 times more effort considering this than the £1 purchase?
For most people, the answer is no. They go to the garage, any garage. They probably take one out for a drive that is in their budget, and unless there is something they really don't like, they "think about it", then buy it. They take the dealer's appalling finance too. If they're really sensible, they may spend a couple of days "thinking about it".
But in reality, the linear correlation between cost and consideration has completely broken down. It always amazes me how many people buy absolutely dire cars. Cars with no style or charisma, cars that look downright embarassing, cars that have the visibility of a 1970s supercar, and the safety features to match, cars that are slated by every car magazine and car reviewing TV program in the country. And these cars still manage to sell in their thousands. There is no justifiable reason why anybody would buy these cars. And yet they do, because they didn't make 10,000 times more consideration than a £1 choice.
When was the last time you spent several thousand pounds less than your budget because you discovered that a cheaper car was actually better for your needs?
Don't kid yourself, nobody does it. If it's cheaper, it must be worse....
Absolutely ridiculous, but people really do believe that. It's why the first thing that the dealer asks you how much you're looking to spend. I hate that question. "looking to spend" is for morons. I "look to spend" whatever is the most appropriate amount for a car (or whatever) that satisfies my needs. If that's twice my first estimate, I'd better look for some more money. If it's less than my estimate, brill! I'm not "looking to spend" anything.
And what's more expensive than cars?
Houses.
People seem to spend an unbelievably small amount of effort considering their house purchase. This is a life changing decision.
Yeah, so people look at a few houses before making their decision, but how many houses do you get professionally surveyed?
For most people, only one. And that's just because the mortgage lender insists on a survey. Oh, and by the way, that's not a survey. That's some bloke coming around to see if there's anything glaringly obvious that might mean the entire house will fall down. If the house is going to cost you £50K in the next 5 years to stop it leaking and make all kinds of other repairs, the bank doesn't care, that's your responsibility. That's why you have a professional buildings survey.
Don't you?
That's part of your 100,000 to 200,000 times more consideration.
Money is important. It's what makes the world go around. If you can't understand the value of £200,000, you shouldn't be spending that on a house. You must understand the value, not just the numbers. And take action accordingly.
