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”
One characteristic of the wealthy individuals I have met so far is that they complete their work on time, rather than merely finishing tasks by the deadline. Being on time for a task involves calculating the necessary amount of time in advance based on the task’s size and nature, then striving to complete it within that timeframe. In contrast, finishing work at the last minute means postponing tasks until the deadline looms. The habit of delaying work is referred to as ‘ procrastination ’ in psychology; it’s associated with perfectionism or the tendency to derive greater satisfaction from concentrating energy on tasks as the deadline approaches. Anxiety underlies this behavior, and it proves to be entirely counterproductive in any case. - Joseph’s “just my thoughts”