In man’s constant pursuit for wealth and high social status, he or she seeks to spend like the wealthy and royal. A recent report says that after the Royal wedding, sales of an expensive luxury handmade hand bag that Queen Elizabeth carried on the big day has had a 60% spike in sales.
This is because ladies who aspire for a high social status perceive carrying the same handbag as the queen as a social statement.
The same happened to Kate’s replica wedding dress. Clearly these spending decisions are those of the affluent but are made not on the basis of proper financial planning or real needs.
But one should not criticize expensive purchases just for the sake of it.
Frugality should be accompanies by quality purchases. Imagine a person who buys the cheapest shirts which go for two thousand francs every three months and one who purchases ten thousand francs every one year.
At year end person one would have spends twelve thousand francs while person two would have spend two thousands francs less.
Person two may think they are living cheap but they don’t look at the bigger picture.
In addition, the inconveniences of wearing shirts that always look worn out half of the year are an additional cost in terms of reputation as well as the hassle of going downtown every two months to search for a cheap shirt.
In fact, one should consider that a good purchase is not just one that looks at quality of the product to be purchased but the peace of mind that one earns as a result of that purchase.
For example a cheap shoe that does not fit well will be painful and will make you feel tired and frustrated. The cost of that shoe is the inconvenience of losing concentration from your work.
Same applies to buying an old car for business. The real cost of the car is money lost due to time wasted in garages and then loss of concentration form chasing deals while worrying about the state of the car, let alone the monetary value of many garage trips.
Rich people who want to grow richer buy long term. Instead of renting a house for ten years at Rwf 500, 000 every month which totals to Rwf 60 Million, they would rather buy the same house at Rwf 50 Million in strategic location such that ten years later when they want to upgrade, they spend Rwf 10 M to refurbish it and resale it for not less than Rwf 100 Million. Such people understand the price of quality.
But we should not confuse quality and expensive items. The two do not necessarily go together.
Some items are expensive because they are over hyped. These prices sometimes rise due to bandwagon effect.
For example the price of the queen’s wedding hand bag might rise not because the quality of the item has risen but because demand has risen.