5th November 2024 / Written by Alex
Category: Mindset
Imagine you're an enthusiast gamer. You love gaming, and it brings you a lot of joy. And as the enthusiast you are you spend a lot of money on your hobby and you decide to buy yourself the best there is. In 2024 that'd be an RTX4090 for about $2000. But instead of using this card as it was intended to be used you decide to take it with you to work. Let's say you work in an office and when you arrive you take the card out and strap it to yourself so that everybody can see that you have bought yourself an RTX4090. Does that sound absurd? It does but bear with me. A couple of days ago someone told me about a friend of hers and guess what her friend does at the office.
Of course her friend didn't strap a graphics card to herself but this is pretty similar. This friend works in the legal department at a large company and she likes to spend money on expensive shoes. Alright, everybody is allowed to spend money on whatever is important to him or her, no matter whether it's graphics cards, home theater equipment or even shoes. But what I was told next really made me think about spending habits and the psychology behind our habits. Here it is: She spent round about $700 on shoes that she carries with her to the office, in a bag. Having arrived she puts them on. These shoes are not for walking around outside which I'd say would be their intended purpose but no. These shoes are only meant for others to see int the office. But what drives me to this conclusion? I thought a lot about some questions regarding her behavior but first let's clarify the 3 major reasons we humans buy expensive things.
This gets us back to the enthusiast gamer who loves gaming and spends a lot of money on his hobby. I guess this applies to anybody who is spending a lot of cash on his hobbies and passions. Before I had kids, I had plenty of time to go to the movies after work. And most of the time I was there alone because I was there for the movie itself and the cineastic experience. I spent a lot of money on movies back then and I've built a huge collection of Blu-rays as well. Others spend a lot of money on graphics cards because they want the best gaming experience that money can buy regarding graphics and frame rates. Our hobbies bring us joy and happiness. Whatever your hobby is that you spend a lot of money on I'm sure it gives you a special feeling that does not depend on anybody else being there or watching you. Whether you buy expensive speakers because you're an audiophile and you enjoy listening to music or watching movies the best way possible or you spend a lot of money on sports gear because you love the feeling it gives you while preparing for the next triathlon. Whatever it is for you, we all like to spend money on things that bring us joy and happiness.
Have you ever bought something cheap that didn't last long? I'm sure you have. Most of us have. Good marketing can convince us of high quality. That's when we think we're making a good deal although we're not. When this happens often enough our spending becomes more careful and we are willing to spend more money on high quality products hoping they will perform better and last longer than their cheap counterparts. At least that's what premium product marketing promises. Effectively you are spending more money now to save money in the long run. To use our enthusiast gamer example: Someone who buys an RTX4090 for economic reasons may want to use this card as long as possible and for many years instead of buying a mid-range card each year or two. So, it's not necessarily the desire to play with highest graphics settings and the highest framerates but to max out this cards lifetime and we know that you could still play many modern games with a high-end graphics card from 5-7 years ago. Another economical reason would be to buy something because you hope it will appreciate in value. There are a lot of people who buy rare limited sneakers which can appreciate significantly in value once they are no longer available. These items are generally kept safe and not used so they won't lose any value.
Could you also adapt our enthusiast gamer example to buying an RTX4090 for social reasons? Of course, you can. Just check out the user signatures in gamer forums. Most users post their PC configuration there. And you'll also find a lot of comments where people just can't help but mention their expensive graphics card. This means that we also spend a lot of money for social reasons like showing off, getting compliments, being noticed, being envied, belonging to a certain group etc. All these things involve others. Spending a lot of money for social reasons always involves others and it's also meant to signal status. Imagine someone who has bought a sportscar and on the weekends he takes his car out for a spin on the racetrack where he is alone. This person has bought a car for emotional reasons. But when you take your car for a spin through the city where you have a lot of eyes on you then you're an attention wh*re. And this reveals a lot about your personality which we'll explore further down. First let's get back to my hypothesis about our friend who works in the legal department and her expensive shoes.
Let's find out what her reasons might be. If she bought her shoes for economic reasons because they last long and she'll save money in the long run then why not wear them outside where they can get dirty and wear out? After all, they should be high quality and long lasting, right? Or did she buy them hoping that they will appreciate in value? Then why wear them at all? So, economic reasons don't make sense to me. What about emotional reasons. Let's assume she bought these shoes because they bring her joy. Then again, why not wear them outside where she could enjoy them even more? This leaves us with social reasons. These shoes have to look good, new and expensive each day. This only works if you bring them to work in a bag and put them on before anybody sees your regular shoes. Plus, you need to know that your colleagues, I'd say mostly women, will notice what shoes you are wearing and that they also know their price point. To be fair there is a solution that I came up with where I am totally wrong. Maybe she bought those shoes because she just thought they're great and the price didn't matter. And maybe you could only wear these shoes inside because it's not really comfortable to walk outside in high-heels. Yeah, that's probably it. She bought $700 shoes that are just really pretty and that one could only wear inside in the office because they are too uncomfortable to wear outside. That's like buying a Ferrari and parking it in front of your house so that everyone can see it. You never take it for a spin because it could get dirty and wear. That's what all Ferrari owners do, right?
Now let's examine what all this reveals about personality. When you buy something for social reasons then try to reflect and ask yourself: Am I buying this for me or for others to notice because I need attention? If that is the case you need to work on your personal development. Don't depend on others to feel happy. And don't assume others will only like or admire you because you have the latest $1500 phone. You're making yourself dependent on others and that will have a negative impact on your happiness because you will always be chasing the next gadget just to be noticed. And there is a way out if you want to work on your behavior.
But as I said earlier, you could also buy something because you want to show that you belong to a certain group. Imagine an investment banker with a dress code of expensive suits at the office. Even if he is not the type who'd usually spend thousands of dollars on a suit but he'd feel super uncomfortable coming to work in a cheap, untailored suit. Out of social pressure and a need to belong he spends a lot of money on a tailored and expensive looking suit. And maybe there is a young woman who felt just the same pressure of belonging to her group of colleagues who wear expensive shoes so that she went out and spent a lot of money on a pair of shoes that she normally wouldn't have bought. And that's why she also needs to keep them safe and sound for as long she can.
Stay Awesome
Alex