Wednesday, January 31, 2024

Knowing the Difference(s) in Price & Worth/Value, Price & Cost, Expense & Experience, and Spending & Investing

Kind words do not cost much. Yet they accomplish much. 
~ Blaise Pascal

Has anyone ever asked you "A penny for your thoughts?" I don't know about you, but while that expression is a kind way of getting someone to open up, the value proposition is simply non-existent!

We have these oddities, especially with time and money...

So often people say/ask "How much does that cost?" when the real question, the internal question is 'What is it worth to you?' or 'What is the value of having this?' since the cost is particularly relevant to what you believe the worth is and/or the value of the item/experience. 

Say someone has 6 pairs of shoes with them on a trip and an attractive, right-sized pair of shoes at a lovely local store is $200, that cost becomes more about giving up space in their luggage, in other words, the opportunity cost plays a factor. What could they do with the money if they don't buy these shoes? And then, what will it cost them to rationalize another pair of shoes to themselves (or friends who managed to go 3 weeks with 2 pairs of shoes)? The worth of the shoes that potentially make an outfit during that trip is higher than the worth of the same shoes if they will sit in a bag getting toted around from hotel to hotel, city to city without getting worn. That leads us to price. The price of not getting the shoes aligns somewhat with the opportunity cost. Sure there is a price of $200, and then there is the price of if this purchase goes on a credit card. If the price of getting the shoes is paid in terms of being cheap when everyone is at dinner. Price is more than a currency exchange, it can be about energy and attitude, too.

The cost/worth/price idea gets us thinking about our wallets, our choices, and even our rationale for making or skipping purchases...and it need not stop there!

Time is our most valuable resource, so when engaging with someone, or many someones, do think about cost, worth, and price, meaning how many minutes or hours present as the direct cost, the worth is what you will gain from the engagement, and the price, or opportunity cost is what else you could be doing with that time. When someone says "Gotta minute?", they scarcely, if ever, only take a minute, and if someone, unfortunately, asks to "Pick your brain", they are taking time and energy from you, so you have a choice to give it or not.

Still, both the shoe example and a meeting with someone can also be an investment or a simple spend. How so? The investment idea is that the shoes will last a long time, and/or they will go up in value. A simple spend though is that the money or time was ours, we spent it on the meeting or the shoes and didn't see anything other than less than a fair trade or value, so we spent our time or money, for it yielded no return or less than what we deemed acceptable.

Now, moving on to whether the choice to buy the shoes or spend time with someone is an expense or an experience keeps most of us intrigued in a slightly new way. It's rarely both an expense and an experience because the idea of an expense means you got little out of it, and you have written it off, meaning it bears little worth to even revisit, whereas an experience means there was something in it that was/is non-tangible. Say the shoes were those to benefit charity and you like the charity so the experience of contributing outweighs that the shoes were an expense to move forward and away from quickly. Also, the shoes could be a wonderful reminder for years to come about the trip itself and that alone makes the purchase of the shoes an experience. Similarly, a meeting with someone can spark another connection, doing business together, avoiding an issue or problem, or none of those mentioned. If any of the connect, business and avoidance play out, then the meeting was an experience that moved you or a project ahead, and if it is not one of those, it was likely an expense.

What to do with these point-counterpoint positions and considerations? Here are the takeaways for implementation:

1) When you are asking for someone's time, present an agenda and goal that is of value to them focused on them, and then deliver to it.

2) When considering a purchase of any size, go beyond price to cost, other options, and the value for you having it versus not having it, as well as the timing and situation.

3) Keep in mind your sense of risk and adventure may be far different than other people's, so judge not what people buy or do with their time, as it is their process, or systems of process that lead them to satisfaction or dissatisfaction with their choices.

By simply and wonderfully allowing your mind and your decision to consider these options,  before putting money or time toward an item or an interaction, you will likely live your life with intent and experience the outcomes fully and openly! 

#Leadership #Choices #Value #Expereince #PersonalDevelopment #ProfessionalDevelopment

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