When you see a $250 burger on the menu, first reaction most likely would be: “WTF?” , ”RIDICULOUS!” "Only a ____ person would buy that." (What word did you use? Arrogant? Elitist? Jackass? Dumbass?)
Sure, you could take that approach and insult people who spend a lot on something. That’s what most people do. Or you can say, “Hmm… Who actually buys this and why?"
As a general rule, people who spend 100x more than other people are not stupid. There’s something else going on here. Something that almost nobody talks about.
…Lets take a look into the world of LUXURY.
Luxury is one of those things that makes us feel happy, sad, angry, and jealous - all at the same time. Yes, think about it… For example, who the hell walks into a Tom Ford store and buys a $6,000 dress or suit…on a Wednesday? $6,000 for just ONE suit! Just thinking about spending that much money on clothing makes some people cringe. But notice that if you were given this suit for free - the same suit James Bond wears that fits like a glove - every single one of us would put it on with a huge grin and brag about it.
Most people think spending this kind of money is completely stupid and irrational. Some even laugh at the people flying first-class. "Lol, stupid. They paid 3x the airfare, but we’re all going to the same place. Ha ha.” But why don't you stop and ask, "Hey, I wonder why those people are spending that kind of money?"
You’ll notice that most frugalistas and experts completely dismiss the value of luxury. They see the world as a spreadsheet of dollars and cents that can be counted and should always be maximized to save as much money as possible. But you and I know that’s not how life works. Sure, saving is important, but if you can afford it and you want it, shouldn’t you be able to splurge to buy it - every once in a while? I say, spend extravagantly on the things you love…and cut costs mercilessly on the things you don’t.
Interesting? Now, do you see why we feel so conflicted about luxury?
We want it, but at the same time we don't. We see it everywhere, but nobody wants to talk about it publicly. We say certain things are "wasteful," but the $25 lunch we bought yesterday seems wasteful to someone who’s living on $25 a month and feeding a family of four. And we’re all for luxury until we see how much it actually costs...at which point we instantly label it “ridiculous.”
Am I saying you should immediately go out and buy a $6,000 suit? No.
But what I am saying is that it’s better to understand what’s going on in this luxury world than to immediately write it off as "too expensive" or “stupid.”
In fact, I’ve seen my view of luxury change through the years because I've seen it from both sides of the table. In my first year in the States, I earned only $11,000 and I didn’t spend a lot on luxury then, nor I had much understanding. But as my income grew, I saw another side. As I started seeing things from both perspectives, I learned to move past the sticker shock of saying "That cost HOW much? That’s insane!" and appreciate it instead.
Maybe your luxury is insane. Who cares?
Let’s get one thing clear: Luxury doesn’t have to mean a $50,000 dog house or a fur coat for every night of the week. YOU choose what luxury means to you.
I might think it’s insane, your college friend might think it’s insane, but if you’re getting superlative value from it, that’s luxury.
Instead of being dismissive of all luxuries (like I used to be), I decided to learn about the reasons behind why people pursue more, even when others might find it ridiculous or frivolous.
Check out what I learned:
LUXURY REASON #1: Functionality. I used to not understand people who got first-class airplane tickets by saying, “Ugh, we both get to the same place, and I just saved $2,000.” I was a stupid know-it-all when I said that. Now I know when you travel first class I can actually sleep well on cross-Atlantic flight, wake up fresh, have a decent breakfast before landing (therefore save time), and go straight to a meeting. Luxury can be functional.
LUXURY REASON #2: Economical. Luxury is, by definition, not cheap. But some people change from a “disposable” mentality of buying cheap umbrellas, cheap clothes, cheap EVERYTHING…to selectively buying the best and keeping it forever. I have few dresses and coats that costs what many would consider an obscene amount. Timeless and flawless after 10-20 years, and if you divide the price by amount of time — the price becomes much more palatable. And that says nothing about how much I love wearing it. There are very few things that give me more pleasure than turning heads when I walk in to a function or a ball in my custom Dolce & Gabanna dress.
LUXURY REASON #3: Jay-Z vs. Dorothy. So many people cannot fathom the idea that what costs a lot to you may not cost that much to someone else. Go look at literally any forum online about how much people paid for wedding rings. 90% of the respondents will say something like, “My husband paid $287 and we’ve been married for 30 years. Anyone who pays more is a fool!” That is great, Dorothy. But there are also people for whom $287 is like an eighth of a cent to you. They earned more, or they just have more (Jay-Z’s ring to Beyonce was wooping 5M, and Beyonce dropped 40M on a present to Jay-Z). As you see it is all relative.
What’s important to understand is that YOUR FINANCIAL SITUATION IS NOT EVERYONE ELSE’S. And that is something to keep in mind when you open your mouth to say: “That’s crazy money!”