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  1. #1
    Banned. timmyquest's Avatar
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    A question about wealth

    I realize everyone is different but...

    An acquaintance of mine is a partner at a financial consulting firm. I'm told he has a base salary of $250,000 a year plus bonuses and commission. He does pretty well.

    His girlfriend and him are going on vacation and there was a place they were interested in going to that he said was too expensive. At $700 a night, i can't disagree. But, curious, i did the math. Lets safely assume that he does pull in $250,000 a year (even after taxes, given his bonuses/commissions I'm sure his bank account sees about that much).

    If you divide that by 52 weeks in a year and 5 days in a week, it comes out to about $900 a day he's making. That is more than a night in the hotel he was interested in. And i got to thinking about what i make, and after taxes it's a little more than $100 a day and i asked myself if i would spend about that on a hotel room for a night (that's about as cheap as they get in many places). I'm sure, given a special occasion, that i would.

    So, I'm curious of the mindset of those who make more money. At the end of the day is $700 still $700 or do you begin to view the $700 as being different as you make more?

  2. #2
    That darn Yankee TexasGuy's Avatar
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    It's different.
    Making 25k after making 12k is different from making 50k after making 25k or 75-100k after making 50k
    I tend to look at bigger long term goals and how i'm getting there.
    Life is about hanging onto what you think is important and finding out what really is important.
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  3. #3
    Senior Member MrCrassic's Avatar
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    I agree with the above. It really depends on where you started and where you're moving up to. Going from $50K to $150K will carry a different mindset than someone going from $150K to $300 or $400K+. (I would like to believe that a general five-person family would be completely covered if they net more than $400K/year.)

    I think that everyone is different, though. Some people make choices that are more holistic with everything else, while others just spend their money without a thought.
    Last edited by MrCrassic; 03-01-09 at 10:28 AM.
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     $i+3 > catch { break >>)).replace('&','') ; $ofs=" " # Replace right angles with right curly braces

  4. #4
    Super Moderator Allen's Avatar
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    Value vs. worth
    Just because the room is valued at $700 doesn't mean it is worth seven times the $100 dollar a night room.

  5. #5
    That darn Yankee TexasGuy's Avatar
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    Quote Originally Posted by AllenG View Post
    Value vs. worth
    Just because the room is valued at $700 doesn't mean it is worth seven times the $100 dollar a night room.
    ditto.
    Life is about hanging onto what you think is important and finding out what really is important.
    "Stop Ruining my joke!", "No, a joke implies humor attached at no additional cost"
    So many sayings, so little sig space.

  6. #6
    Pwnerer Wordbiker's Avatar
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    Quote Originally Posted by timmyquest View Post
    So, I'm curious of the mindset of those who make more money. At the end of the day is $700 still $700 or do you begin to view the $700 as being different as you make more?
    I've often seen the exact opposite view.

    Several customers have come into the shop, obviously wealthy by the vehicle parked out front, yet they feel more entitled to a discount than the working stiffs and are huge cheapskates. One customer demanded a 20% discount on new bikes for him and his wife (often all the margin we'd make). Later I found out...he's a doctor.
    Quote Originally Posted by ahsposo View Post
    Ski, bike and wish I was gay.

  7. #7
    hors category TandemGeek's Avatar
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    Quote Originally Posted by timmyquest View Post
    At the end of the day is $700 still $700 or do you begin to view the $700 as being different as you make more?
    As others have already stated, it's about value.

    Wealth comes from spending less than you earn, so if someone simply increases their spending to match their earnings they can still find themselves living from paycheck to paycheck.

    $700/night rooms are not targeted towards the $250k wage earners, anymore than $100,000 cars are. It's all relative.

    However, all of that said, some of the wealthiest people in the world got that way by being frugal and remain that way. Read the Millionaire Next Door... Here's a sampling

    http://www.nytimes.com/books/first/s...llionaire.html

  8. #8
    Super Moderator no1mad's Avatar
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    $700 a night?? For a hotel room? My mortgage is that much per month.

    When I'm traveling, I'm not going to spend a bunch of money to rent a room for a few hours. Of course, traveling for me means road trips a couple of times a year from Tulsa OK to Lebanon TN (E of Nashville) for child visitation of my step kids who live just outside of Jacksonville NC.

  9. #9
    hors category TandemGeek's Avatar
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    Quote Originally Posted by Wordbiker View Post
    I've often seen the exact opposite view.

    Several customers have come into the shop, obviously wealthy by the vehicle parked out front, yet they feel more entitled to a discount than the working stiffs and are huge cheapskates. One customer demanded a 20% discount on new bikes for him and his wife (often all the margin we'd make). Later I found out...he's a doctor.
    Again, people who have worked hard to acquire wealth have a different appreciation for the value of money and will always look for opportunities to maximize value in each and every transaction.

    They ask for discounts because they've learned that discounts are available, but often times for only those who ask. So, asking for a discount and negotiating becomes a normal part of every transaction. Just because someone has acquired more wealth than someone else doesn't make any commodity, product or service worth more.

    Of course, since this is a cycling forum, want to bet how many professional cyclists have probably over-payed for their exotic sports cars and other luxury items, but who still expect to get a 'pro-deal' discount or free cycling equipment when they buy bicycle stuff?

    Bottom Line: It's all about value, not the net worth of the customer.

  10. #10
    Super Moderator no1mad's Avatar
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    Quote Originally Posted by TandemGeek View Post
    As others have already stated, it's about value.

    Wealth comes from spending less than you earn, so if someone simply increases their spending to match their earnings they can still find themselves living from paycheck to paycheck.

    $700/night rooms are not targeted towards the $250k wage earners, anymore than $100,000 cars are. It's all relative.

    However, all of that said, some of the wealthiest people in the world got that way by being frugal and remain that way. Read the Millionaire Next Door... Here's a sampling

    http://www.nytimes.com/books/first/s...llionaire.html
    *raises hand*

    I had to learn the hard way. But now finding that being frugal isn't too hard, especially since the family no longer watches TV, and I leave the kids at home when I go shopping for groceries.

  11. #11
    Senior Member MrCrassic's Avatar
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    Quote Originally Posted by Wordbiker View Post
    I've often seen the exact opposite view.

    Several customers have come into the shop, obviously wealthy by the vehicle parked out front, yet they feel more entitled to a discount than the working stiffs and are huge cheapskates. One customer demanded a 20% discount on new bikes for him and his wife (often all the margin we'd make). Later I found out...he's a doctor.
    A vehicle is NOT an accurate demonstrator of wealth.

    I could have saved up forever and got that SLK320 that I've always wanted. Doesn't mean that I'm still a "poor" college student.
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     $i+3 > catch { break >>)).replace('&','') ; $ofs=" " # Replace right angles with right curly braces

  12. #12
    Super Moderator no1mad's Avatar
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    Quote Originally Posted by MrCrassic View Post
    A vehicle is NOT an accurate demonstrator of wealth.

    I could have saved up forever and got that SLK320 that I've always wanted. Doesn't mean that I'm still a "poor" college student.
    True that. I've known people who spent way more on their cars than their housing. Some of those dwellings should have been condemned...

  13. #13
    Senior Member Nachoman's Avatar
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    When I'm on vacation, unless the weather is totally screwed up, I spend practically no time at all, except for sleeping, in a hotel room. Therefore I prefer less expensive lodging.
    .
    .

    Two wheels good. Four wheels bad.

  14. #14
    Pwnerer Wordbiker's Avatar
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    Quote Originally Posted by MrCrassic View Post
    A vehicle is NOT an accurate demonstrator of wealth.

    I could have saved up forever and got that SLK320 that I've always wanted. Doesn't mean that I'm still a "poor" college student.
    If you can afford college...you're not poor in any sense of the word. I've also never heard of a poor doctor.

    My point is that even if you are wealthy, supporting local businesses rather than trying to gouge them may actually create goodwill that will aid you far more than the one time transactional savings.
    Quote Originally Posted by ahsposo View Post
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  15. #15
    Senior Member skiahh's Avatar
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    Quote Originally Posted by Wordbiker View Post
    I've often seen the exact opposite view.

    Several customers have come into the shop, [/b]obviously wealthy by the vehicle parked out front[/b], yet they feel more entitled to a discount than the working stiffs and are huge cheapskates. One customer demanded a 20% discount on new bikes for him and his wife (often all the margin we'd make). Later I found out...he's a doctor.
    Sorry, word but that may be one of the dumbest, narrowminded and short sighted things anyone has said on BF (and that's saying a lot!). You can't tell someone's wealth by the car they drive. Hell, that's why we're in the mess we're in! Want a car? Want an expensive car? Only make 25K a year? No problem, we'll finance it out to 84 months, get you a payment you can handle (even if you can't AFFORD it) and you can drive the car that makes people think you're wealthy/cool/whatever image you want to project.

    And are you sure they feel more ENTITLED to a discount or are just bargaining hard so they can, once again, buy more than they can afford? Or maybe they do feel entitled since everyone else has given them the discounts necessary to get into the higher end stuff.

    Doctors demanding discounts? Hmm... well, have you ever seen an insurance benefits claim for a medical visit? I think my $10,000 emergency appendix rupture was reduced to something like $2500 or $3000 all said and done. How's that for a discount??

    Sure, doctors make more than most of us, even when you talk net (after malpractice insurance), but that doesn't mean they don't do research and negotiate hard, too.

    As for the OP, the family making $250K may have higher overall day to day expenses (normal ones like mortgage, car payments) leaving their "play" budget limited just like yours and mine. $700 for a night in a hotel is pretty steep if it's just a place to sleep by anyone's standard!
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  16. #16
    The quieter you become... Falkon's Avatar
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    Quote Originally Posted by no1mad View Post
    *raises hand*

    I had to learn the hard way. But now finding that being frugal isn't too hard, especially since the family no longer watches TV, and I leave the kids at home when I go shopping for groceries.
    Oh yeah. In the past I've been good with saving money. This last year, I just let it all go and now I'm paying the price.
    Quote Originally Posted by TechKnowGN
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  17. #17
    Super Moderator Allen's Avatar
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    Quote Originally Posted by Wordbiker View Post
    My point is that even if you are wealthy, supporting local businesses rather than trying to gouge them may actually create goodwill that will aid you far more than the one time transactional savings.
    It's a game.
    What's better than having a higher zoot bike than the neighbor?
    Paying less than he did for one just like his.

  18. #18
    Pwnerer Wordbiker's Avatar
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    Quote Originally Posted by AllenG View Post
    It's a game.
    What's better than having a higher zoot bike than the neighbor?
    Paying less than he did for one just like his.
    At whose expense?

    As much as the bicycle industry has fought against it, bicycles are not a necessity unless used as a primary source of transportation. The fact that someone can drive a car, any car, to the store indicates enough means to purchase a bicycle, given the broad range of pricepoints. The fact that they are considering a non-essential recreational expense also indicates means.

    Regarding the entitlement...yeah, I get less argument over prices from the folks that can barely afford the most basic bike. Whether this means that someone just getting by appreciates more that we are in a business to feed our families that sets wages at the bare minimum needed to survive versus someone with obvious means (only illustrated by an expensive car, not defined by it. Geez people) that one might think would appreciate needing to make a certain margin more...who's to say?

    I will ask this question though: Do you think the doctor would offer a 20% discount on his services in exchange for the same discount on the bikes?
    Quote Originally Posted by ahsposo View Post
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  19. #19
    phony collective progress x136's Avatar
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    Quote Originally Posted by Wordbiker View Post
    At whose expense?
    People are incredibly short-sighted and small-picture, as is evidenced by the state of the economy.

    They aren't thinking as far as, "Would it be detrimental to this business for them to comply with my wishes for a discounted price," or even, "They can afford to give me a discount, they'll make up the difference with all the people who pay full price." The extent is "This is expensive, I want to pay less."

    It's a good example of Hanlon's Razor, unfortunately.

    I bet if you did ask the doctor to reciprocate the 20% discount, he would be taken aback at your suggestion, but it would get your point across nicely.

  20. #20
    Senior Member
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    Each region is different also. Los Alamos is a science town, supported almost entirely by DOE and other government branches. Just based off reports last year, the town has the highest (per capita) number of not only PHD degrees, but millionaires. Yet every day I drive around here, I see WAY more 10 year old Subarus floating around than luxury cars. By contrast, when I go home for the holidays in west texas, I see way more top dollar SUVs than subarus. There seems to be two polarities: live beyond your means or be a tightwad. Not sure what that's about, but it's interesting to observe.

    And there's no way I'd pay $700 bucks a night for some fancy hotel.

  21. #21
    Pwnerer Wordbiker's Avatar
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    Quote Originally Posted by x136 View Post
    People are incredibly short-sighted and small-picture, as is evidenced by the state of the economy.

    They aren't thinking as far as, "Would it be detrimental to this business for them to comply with my wishes for a discounted price," or even, "They can afford to give me a discount, they'll make up the difference with all the people who pay full price." The extent is "This is expensive, I want to pay less."

    It's a good example of Hanlon's Razor, unfortunately.

    I bet if you did ask the doctor to reciprocate the 20% discount, he would be taken aback at your suggestion, but it would get your point across nicely.
    Thanks for the confirmation that you understand. I'm not asking anyone to agree, just making a point.


    One more story that might illustrate my point: When my Mom was still in CA, she worked for the county building department. While at lunch one day she overheard a conversation between two women that were both building lavish homes. The first woman was having trouble deciding between several subcontractor bids, trying to balance between price, quality of worksmanship and integrity of the contractor.

    The second woman said, "Oh, you need to hire unlicensed contractors." When asked why, she responded, "Because unlicensed contractors can't sue when you don't pay them." (Which is true under CA law for any work performed over $500 value) She then brags in detail about how she strung her subcontractors along, never paying them, and how much money she saved. By law this woman was right, but I wouldn't be surprised at all if her cold heart was warmed one evening in a house fire.
    Quote Originally Posted by ahsposo View Post
    Ski, bike and wish I was gay.

  22. #22
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    Well, I currently make more than most of my friends (most still study, I work as a visiting scientist...i.e. **** pay by most standards). Yet I still live off of less.
    The reason seems to be that I always had to live of study loans and the odd job I could squeeze in between (I worked freelance, so I got paid very well, but irregularly). Not only that, at points I had to support my parents. In contrast, the majority of my friends had their way through college paid by their parents (I agree that saving money while your parents are paying your tuition and livelihood is a bit crude). Most of them even into their MSc's which is where they are now.

    To me it seems this is a result of feeling the value of money. Not just knowing it, but feeling it in the sense of monthly payments to study loans, of having had to scrape by for some months becasue of some expensive repair to your laptop (or whatnot).

    People tend to look down on you when you barter for something (like a bike) while you make (in their eyes) plenty of money. Well, what I oay for something is based on what I feel it is worth, not on what I can pay. If you feel that that discount is too much or that it is to the detriment of your shop, than you shouldn't give it.

  23. #23
    phony collective progress x136's Avatar
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    Quote Originally Posted by Wordbiker View Post
    The second woman said, "Oh, you need to hire unlicensed contractors." When asked why, she responded, "Because unlicensed contractors can't sue when you don't pay them." (Which is true under CA law for any work performed over $500 value) She then brags in detail about how she strung her subcontractors along, never paying them, and how much money she saved. By law this woman was right, but I wouldn't be surprised at all if her cold heart was warmed one evening in a house fire.
    Of course, I'm not discounting the fact that there are a lot of people out there who are just colossal assbags.

  24. #24
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    Quote Originally Posted by Wordbiker View Post
    The second woman said, "Oh, you need to hire unlicensed contractors." When asked why, she responded, "Because unlicensed contractors can't sue when you don't pay them." (Which is true under CA law for any work performed over $500 value) She then brags in detail about how she strung her subcontractors along, never paying them, and how much money she saved. By law this woman was right, but I wouldn't be surprised at all if her cold heart was warmed one evening in a house fire.
    That is very, very different from asking for a discount. This is, from a moral point of view, stealing. Even if it is legalized by some law loophole (probably to discourage unlicensed workers).

  25. #25
    Pwnerer Wordbiker's Avatar
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    Quote Originally Posted by Tinuz View Post
    If you feel that that discount is too much or that it is to the detriment of your shop, than you shouldn't give it.
    I usually don't.

    While I admire the sacrifices required by being a student, it does not behoove me to compensate for it out of my income.
    Quote Originally Posted by ahsposo View Post
    Ski, bike and wish I was gay.

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