Yesterday I wrote “it’s not about big wins vs. small wins” and in that cited an article from Ramit Sethi about someone buying a $2,000 hand bag. Specifically:
“A friend of mine is brutally honest about being materialistic. She loves bags and shoes — expensive ones. She does online sales, and she made a rule for herself that each time she does a monthly webinar, she takes 5% of sales and spends them, guilt-free, on anything she wants.
I love this!
A $2,000 bag? Get it.”
I made the point that she’d need to make $40,000 a month or $480,000 a year in those webinars to buy that bag guilt-free (without saving up for it).
I thought after making that point, I could simply just brush it off and move on, but something about it nagged me for a few more hours.
I can’t figure out why anyone would buy a $2,000 bag.
I’m not against paying for luxury. Just a few months ago, I wrote about how we bought an Acura MDX, a luxury SUV.
So am I’m the world’s biggest hypocrite for pitting my luxury purchase and this person’s? Maybe, but I’ll let you decide.
When I look to make a purchase, especially a large one, I evaluate the functionality of the item. I then try to figure out if I’m getting a good value for that functionality.
We own a budget SUV, the Subaru Forester, which is great for the beach and the dog park. We own a luxury SUV, the Acura MDX, which is better for long road trips or when we have to bring the whole family. While both vehicles will get us from point A to point B, the difference in functionality is amazing. I could go with all features, but it similar to comparing a first generation iPhone and current one. They will both make calls, surf the web, and play music but there are a lot of improvements in the last 6-7 years.
This is where I don’t understand the premium on the handbag. I’ve seen $2,000 bags and they don’t seem to have exceptional stitching, super-amazing comfort, or the capacity to hold a lot more than less expensive bags. I don’t see any functionality that would justify it having a 20x mark-up. What they seem to have is a label that tells other people, “I am mega-rich and can afford this bag.” Maybe there’s something else to it, but I’ve been racking my brain and that’s all I come up with. It is paying for a brand that conveys status.
That philosophy runs in direct opposition to everything personal finance, that it doesn’t make sense to find it on a personal finance blog. And yet there it is.
I know that I’m wired differently than most people. (Aren’t we all wired a little differently?) However, I can’t wrap my head around how someone would value that feeling more than the feeling of feeding the hungry, helping disaster victims, helping our soldiers, or saving some animals.
I’m probably preaching to the choir here, but I get the feeling that some of my readers might have a different view. I’d love to read it in the comments.