Comments on: Understanding Price, Intrinsic Value, and Emotional Value

By: Tricia

Tricia — Thu, 12 Jul 2007 04:02:52 +0000

I’d have to agree with his emotional attachment to the toys. He likes his Tonka trucks, but decided to sell the truck and put a high price on it. Now, his train he has clearly outgrown and he wants a more “grown-up” train set. In his mind, if he sells the train set he’ll have money to get a new one. But he still put a low price on it, probably because he wanted it to sell.

It really is fascinating to witness his mind in action.

Oh…while I haven’t added it up, the train set probably cost between $250-300.

By: FreeFromDebt

FreeFromDebt — Thu, 12 Jul 2007 01:41:48 +0000

It’s not just children that let emotional attachment influence choices over what they will take or even pay for something.

I have very intelligent clients who are paying 2,3 or even 5 times the price for things they ‘had to have’ by carring high credit card balances and only making minimum payments. I know that they are smart enough to realize the outrageous costs involved; but they still do it anyway. That’s emotion, not logic.

In the past ten years the overall debt load on American families has tripled; and consumer debt has doubled. The only reason for the difference in the two figures is that they refi or use equity lines to consolidate so they can afford more. Once the consumer debt is rolled into a mortgage instrument it is no longer classified as consumer debt. But it is still debt and still must be repaid!

This is obviously a very dangerous trend, but as long as they can afford the monthly payments it will all be OK… Right?

Thanks for your work to get these issues out. Sadly, the ones who need to ‘read up’ on financial liability matters usually won’t.

By: Angie Hartford

Angie Hartford — Thu, 12 Jul 2007 00:08:30 +0000

Sounds like the five-year-old is in the process of learning a valuable lesson: a thing is worth only what someone is willing to pay for it.

Now, if some of those grownups who overprice their old stuff at yard sales could only figure it out….

By: plonkee

plonkee — Wed, 11 Jul 2007 16:29:32 +0000

Well some money has a higher emotional value than others – I reckon it diminishes the more there is around.

I like the idea of maximising then emotional value whilst minimising the intrinsic value of gifts – although I may not tell my recipients thats what I’ve been trying to do.

By: dong

dong — Wed, 11 Jul 2007 14:07:12 +0000

It begs the question for some people what the emotional value of money for some people is…. It might be more than the intrinsic value if that’s possible.