Money For Nothing … Oops, Wrong Words

“It is extraordinary to what an expense of time and money people will go in order to get something for nothing.”

Robert Wilson Lynd

I believe Mr. Lynd has hit on something here …

It really is all in our minds.

Visit any gambling establishment and watch the action for a while.  Watch people put endless streams of money into a machine and celebrate when they win a little bit of it back.

Go to the local grocery store or gas station that sells any types of lottery tickets.  Then go check the statistical odds of winning any of those lotteries versus, say getting assaulted by a one-armed person of Albanian extraction with a limp or having lightning strike your house.

Watch the action at local garage sales or the mall, especially during any holiday seasons.   Notice the amount of gas (not to mention sustaining supplies like food and drink) consumed in the quest for some really cheap thing you don’t already have at home.

We often do spend an extraordinary amount of energy, time, and even money … just to save money … or at least perceive we are saving some money.

This is why we get coupons for 25% off, rather than notices that the store is lowering its prices permanently.

However, we do have our limits:)

In “Predictably Irrational“, Dan Ariely reports on research by Daniel Kahneman and Amos Tversky which shows we are much more likely to drive across town to save $5.00 on something when that represents a large share of the asking price than when it represents a small share.  So we happily drive across town to save $5.00 on a $25.00 purchase, but refuse to do so on a $100.00 purchase.  The mount of money saved in each case is exactly $5.00.

The amount of money saved is the same.  The perception of saving is RELATIVE to the total amount.

Apparently, our relative view will overshadow equivalency much of the time.

Where are your perceptions skewed by relative values?

What can you do about that?

Trying to view myself more accurately in the Heartland ….