Experiences vs. Things
Tuesday, March 8, 2016
My mom likes to give me something I want for Christmas so she asks me to send her ideas. Sometimes I do and she’s happy, but sometimes I don’t have any ideas. This year I didn’t have any ideas so she wasn’t very happy with me and she gave me a check. She said, “You didn’t tell me anything you want so this is what you get.” My grandmother used to send a check, too, for my birthday and Christmas.
Because I am a crazy data tracker, it’s not hard for me to keep track of what I’ve spent my gift money on and how much I have left.
With the money my grandmother would send, I would use it to go out to lunch when I wanted a treat. I would think about it like it was my grandmother taking me out to lunch, and I’d write her a note and tell her that I’d spent it that way. She liked that.
With the money I got from my parents this year I took my friend Ann out for an end-of-year lunch at Pizzeria Toro. I’ve eaten there with my parents a few times and we’ve had very good meals. I thought my dad especially might like that I spent some of my gift money on that.
Shortly after the Pizzeria Toro meal, a few days or a few weeks — who’s to say, it’s all blurring together these days — I was thinking about how I could have bought something with that money, but instead I spent it on lunch. Call it buyer’s remorse on pizza. (Though the meal was excellent, and I don’t actually regret it — just a passing thought.)
This made me think about Experiences vs. Things and their relative values.
There is a great bias today toward Experiences — there is a moderately pervasive idea that Experiences are valuable and life affirming, while Things are just a bunch of crap that you’re going to have to get rid of someday and that weigh you down. Marie Kondo and all that.
I think that previous generations would be baffled by this idea — that going out to lunch would be considered better than buying something special that you could have and keep and use for a long period of time.
Back in the day, going out to lunch with gift money might more likely be thought of as “squandering.” Like playing the ponies — at the end of the day, you’ve got nothing to show for it. But today, going to lunch (or playing the ponies) is an Experience, and all to the good.
One blog I read and like wrote a post a few years ago about marginal utility and the idea that people value Experiences over Things today because most people have an abundance of material goods but limited free time. This increases the relative value of experiences and decreases the relative value of things.
And I think this is true, but I think other factors are at work as well.
For instance people in any given social circle don’t necessarily live near each other or visit each other’s houses regularly, and many interactions are conducted online. Having a nice car or a Persian rug might go unnoticed unless you posted pictures, which might look like you were trying to show off, and, depending on your social circle, might look crass.
But of course it’s perfectly natural for you to post pictures of your vacation, or Instagram your Pizzeria Toro crispy pigs’ ears.
[Side note: I read a book a year or two ago by a foodie economist about how to find the best cheap food, and one of his pieces of advice is that if something on the menu sounds bad, you should order it. Because if it sounds bad, the only reason it would be on the menu is because it tastes good. Case in point, if you are at Toro, order the crispy pig’s ears. They are good.]
This also made me think of one of the studies that Juliet Schor describes in her book The Overspent American. She talks a lot in the book about conspicuous consumption and status symbols. And this seems obvious now that I’m writing it out, but she makes the case that status symbols are things that other people see. She describes an interesting study about cosmetics that women use in public (lipstick) vs. cosmetics that women use privately (cleanser), and notes that only lipstick fit the pattern of status object purchasing.
So I really feel that a lot of the Experiences vs. Things dichotomy is driven by status objects and what can be advertised to your social group to show how successful you are.
Experiences say, “I am an interesting person who is expanding my horizons. I have the time and the money to explore the world. Don’t you wish you were me.”
Things say, “I am a shallow materialist.”
My experiences at the moment involve trying to answer many multiple choice questions like:
For the next two years, a lease is estimated to have an operating net cash inflow of $7,500 per annum, before adjusting for $5,000 per annum tax basis lease amortization and a 40% tax rate. The present value of an ordinary annuity of $1 per year at 10% for two years is 1.74. What is the leases’s after-tax present value using a 10% discount factor?
No one is jealous of me. So I will turn to Things.
With the money I didn’t spend at Toro, I’m buying a new wall clock. Because the one I had broke like four years ago and I still — STILL — look on that wall to see what time it is. But alas I have no clock there.
But someday soon I will. And I will be able to look at it every day. And when I look at it I will think about I got it as a Christmas present from my parents. And that will make my mom happy too.
Experiences are good. Things are good. You just have to buy the right Things.