Archive for November, 2008
What’s Wrong with Used Goods?
Thursday, November 13th, 2008 | Uncategorized | 3 Comments
If you saw a set of used dishes that were in good condition at a garage sale, would you buy them?
Regardless of how you answered, you probably thought, even for a second, about how many people had eaten from the dishes. How “dirty” were these dishes, since they were used? What if the people who owned them previously had AIDS? What if the dishes had been sitting in the basement for years, or been used as a dog food bowl? I’ll bet you’d think twice about buying them if you knew their history. Even if you could buy them for a discount, it’s not worth the risk of inheriting the cooties that comes from buying somebody else’s goods, even if you run them through the dishwasher 3 times.
Fast forward. You are at a restaurant with your significant other. You are enjoying a nice wine with a steak dinner. All of this is being served on used dishes. Dishes that have been in the mouths and hands of thousands of people, probably some with AIDS. Who knows where the dishes have been. Maybe they got dropped on the floor in the kitchen. Maybe a rat or a cockroach crawled in them. But for some reason, you don’t think twice about eating from them. In fact, you pay a premium to be in this restaurant, eating from used dishes. You can only hope they’ve been through the dishwasher.
Why do we have this disconnect in two separate situations, even though the underlying facts are the same? Whatever the reason, it affects our ability to use money rationally. In the first situation, we stand to benefit from buying a set of dishes at a discount if we can get over the fact that they’re used. In the second situation, the used dishes don’t detract us from spending money. The underlying value of the dishes hasn’t changed - only our perception of the situation. Buying something from a neighbor’s garage sale makes us feel poor. Having dinner at a restaurant makes us feel wealthy. But if you look at what is happening to your money, it is reversed. Buying used dishes is cheaper than buying new dishes. Eating out at a restaurant is more expensive than staying at home. If you can master the skill of acting on the underlying value of these situations rather than how they make you feel, you are well on your way to saving more money.