My guess: Very little. It's basically an idiotic millionaire writing out a check to an intelligent millionaire, with a little token for remembrance.
Fun fact: The results in Amazon's "Sort by Price: High to Low" are algorithmically identical to its "Sort by appearance: Shitty to Attractive":
Real luxury goods are an entirely separate economy where normal economic considerations are upended in favor of status. Via business, I get copies of a magazine for rich people featuring reviews of such baubles as Versace-styled helicopters.
Like anything else, prices of luxury goods are determined by the market- as long as someone is buying, they are by definition not overpriced. Comments here regarding "idiotic millionaires" and the like reek of class envy.
One of the hidden truths about high end watches is they don't keep vary good time. And they don't have high resale value most of the time.
Obviously other people won't know you bought it used, but it seems like the notions of luxury and resale are inherently opposed.
I was surprised to learn from Mrs Browl that there are rental clubs for luxury handbags - women who want to make a fashion statement can check out a different designer accessory for different events. This made no sense to me until I considered it from a social engineering standpoint.
A few years ago, one of my mentors took me on a ski trip with him and friends - I was the only person there under 30 and who wasn't a millionaire. The guys are wearing Rolexes, Cartier, Patek Philippe, nice clothing, etc. One owns a helicopter, many own boats, most own multiple cars and properties. Money made in different fields - construction, commodities, finance. There was a risk assessor/professional handicapper, my mentor was running one of the most profitable architectural firms in Dubai. Stupid money at the table I was dining at.
Another: One of my closest friends was a self made millionaire at 24. He's 29 or 30 this year. Lives in a 3 million dollar beautiful modern house with all the nicest conveniences.
When his earned income dipped from $800k/year to $200k/year a few years ago, he had to scramble to replace it. He got into a couple not-glamorous businesses, undercosted competitors, paid suppliers huge signing bonuses ahead of time to get great rates and some exclusive locations, and so on. His gym membership is over $200/month for a luxury place that's not much nicer than my $40/month gym. He spends over $1000 a year on orange juice.
But I had a realization one day - first, these fellas are spending a smaller percentage of their money on luxury goods, consumption, etc, that then average person does. Someone who makes $4k/month and eats out a $20 meal now and then is spending a heck of a lot more than someone who makes $200k/month (as my mentor was) and eats out at $200 meals every other night. The extra consumption for many of these gents fuels extra production.
When my work started to fall apart during the banking crash, I had a year of savings in the bank, and I'm quite frugal. I didn't hurry to get into anything - but if I'd had super high expenses, I would've, and I'm capable. My lower consumption meant I wasn't forced to produce right away.
Beyond that - nicer things actually are much higher quality. I try to buy clothes that are meant to retail for a lot. I look to go to Saks Fifth Avenue during Summer Sale or Winter Sale for the 80% off, or go to fashion sample sales. I tell you, $300 jeans look better, fit better, and hold up better than any $40 jeans. (And I buy my $300 jeans for $60-$120 on sale anyways). Well made watches last forever. Good scuba gear and skis last forever.
You get diminishing returns after a while, big time, but a 2010 Skyline or a Cayenne does drive a lot nicer than my 1995 J30. I'm Captain Frugal over here. I only spend a lot on quality tools, experiences, and gifts for other people. But I understand why wealthy people do. You get better quality, it pushes you to produce more. It's also a signaling thing. I have an Andrew Marc leather jacket I got for $300 that normally retails at like $1200. I remember going in to talk to a VP of Citizen's Bank, the head of that particular branch. I wanted to get a loan, and he said, "Hey, that's an Andrew Marc jacket." I said, "That's right, yeah." I look more successful. I always wear that jacket when I go to a bank.
Finally, some expensive things mean you know everyone in the room will be of fairly high caliber. I don't like haughty places so much, but actually, the really exclusive nightclubs have much friendlier people in them to strangers than run of the mill less restricted places. People know that by virtue of being in, you're probably alright.
Eh, I'm rambling. Long story short, I used to think the way you did. But there's some legit reasons to spend lavishly on certain things, and you might actually wind up closer to your goals if you do. Certainly if you produce at a high level, intelligently increasing your consumption can at times make you wealthier than being ultra-frugal and hoarding. I'm only recently learning this lesson.
Why? Conditioning. Anywhere you look, you see lavish lifestyles being advertised. And after you hit a few mil, you start thinking "hey I'm rich, I should spend that money, like those rich guys spend".
Just because you hit a jackpot, doesn't mean you need to spend 10% of your newly found wealth, buying a Ferrari
Bill Gates: "I didn't get rich by writing a lot of checks."
An ostentatious good: is a good where an increase in price leads to an increase in demand because people believe it is now better.
I own a 1967 Breitling Navitimer that cost less than a tenth of that amount, but was still a lot (for me). It's appreciated in value and is beautifully engineered so to me it was worth every cent.
personally mine would be the time I bought speakers from a very charismatic fellow from a van in a parking lot when I was 18.
That is, people have stopped buying 3 series, so lets make up the difference by selling more Bugattis. Great idea guys.
(Joel wrote that five years ago, so I assume the numbers have shifted around a little, and he doesn't really talk about SAAS pricing models. But the general idea is sound.)
Fifty bucks? No, no, no. This is a Rouchefoucauld. The thinnest water-resistant watch in the world. Singularly unique, sculptured in design, hand-crafted in Switzerland, and water resistant to three atmospheres. This is the sports watch of the '80s. Six thousand, nine hundred and fifty five dollars retail! You got a receipt? Look, it tells time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad. In Philadelphia, it's worth 50 bucks.
"You’re selling pure emotion," he said."
The rest is tips and tricks - interesting and useful perhaps, but by focusing on them the article comes across as scummy sales instead of the ongoing relationship that is essential (and very profitable!) in the $35,000 Watch market.
Mr. Brücker looked the part of a luxury customer, wearing Car Shoe moccasins and an IWC Big Pilot watch, which has shock absorbers to help it keep time under rough flying conditions. He used PowerPoint to impart what he calls the “macaroon technique,” referring to the sandwich-like French macaron pastry. This can be applied to most any product (including, presumably, a Xerox machine) and goes something like this:
“Madam, this timepiece (or diamond or handbag) comes from our finest workshop and it has a value of $10,000. If you buy it, your children are sure to enjoy it for generations to come.”
That pesky number is sandwiched between the product’s more romantic benefits. “We sell luxury—it’s an emotion,” Mr. Brücker instructed.
Now if I could just figure out a way to do that for software which costs a thousandth as much.
This sort of makes me want to put on my best business suit, walk to the luxury jewelry store I pass on the way home from work, and take some notes on their tactics.
Carrying that over to software, these techniques would be most useful for the $100k per seat packages rather than the $5.99 packages. Although software is rarely sold on the notion of romance, so I don't know how sustainable these methods would be.
I have a cheap Casio $10 which is functional. I don't even use that half the time (I have a clock on my phone).
I want the time, nothing else.
Simple answer: It's nicer.
a) Not require the work to gain the remaining $1600 meaning more time with my family.
b) Alternatively if it is from money surplus, it allows me to do more activities with my family.
Plus does it help you get from problem A to solution B any better or is that down to your abilities?
The MacBook is an Acer in a pretty box. If you're interested in the box, you lack any real meaning in your life. Real beauty is in the mind.
If you're interested in the box, you lack any real meaning in your life. Real beauty is in the mind.
Let me rephrase what you just said: to have any real meaning in your life, you have to be completely uninterested in physical appearance. So if I have a passing interest in design, architecture, or art, my life lacks meaning?
I think you just summed up my thoughts entirely.