The relativity of values causes us to use money irrationally. I go to the supermarket to buy a $15 pen, and the clerk smiles and says, “You can buy this pen for $7 if you walk 5 minutes from here.” Then, most people walk five minutes and buy a $15 pen for $7. But if you want to buy a $1,000 jacket and the clerk smiles and says, “You can get a $992 jacket in five minutes from here,” most people simply buy the $1,000 jacket. Reasonably, walking for 5 minutes equals the effort, and the profit of $8 is the same. However, people might go to a store that sells pens cheaper, but not for the jacket, because the discount rate is too low. In other words, the relativity of comparing values makes us act irrationally. The pen’s discount rate is 55%, and the jacket’s is only 0.8%. Yet, the total amount is the same for all $8, and the effort to gain that profit is identical. Attitudes and misconceptions about consumption influence how we build wealth. - Joseph’s “just my thoughts”
Tom Sawyer was punished by Aunt Polly. As part of his punishment, Tom is painting the fence of his house when his local friends come by to ask if it’s fun. When Tom tells them that it is, they ask for a chance to try it. Tom refuses, saying it’s not free, but his friends offer him toys and food, begging for permission. Tom ends up profiting while fulfilling Aunt Polly’s punishment without doing the work himself. There is a dynamic relationship in everything, and management provides a little strength wherever things can go well. If you work hard without question, you need to bring toys and food to others, but if you work wisely, you’ll achieve your goals with the help of others, gaining both toys and food along with praise. All Tom did was hold a paintbrush in front of the fence and smile. - Joseph’s “just my thoughts”