The fallacy of spending money on "experiences" vs hard assets

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TheNightsToCome
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by TheNightsToCome » Sun Nov 26, 2017 11:16 am

WildBill wrote:
Sun Nov 26, 2017 8:11 am
eye.surgeon wrote:
Sat Nov 25, 2017 11:50 am
The trendy thing these days is to talk about spending money on "experiences", basically a new-age description of a vacation, and how it's better than spending money on "things", basically a new-age description of hard assets. The news is full of pop-science articles touting the benefits of this, most of which I think are junk science.

I bring this up as a thought exercise for bogleheads. If you look objectively at spending on vacations, it's the worst money you will ever spend. It depreciates immediately. You have literally nothing left to show for it within a couple weeks. Objectively it's a much poorer purchase than even the most frivolous luxury sports car, which will never be worth zero.

I'm not discounting the psychological and emotional benefits of taking time off work, going on vacations, spending time with family. These have real merit. I'm just rejecting the pop-science notion that spending $10k going to Thailand for 3 weeks is somehow psychologically more beneficial than buying a more expensive car or installing a home theater. For me, either of those would provide more lasting enjoyment than a vacation. Not only do I enjoy them much longer, but they have a tangible value when I'm done with them.

Mind you, my wife has accused me of being the worst vacationer in the world as I get bored after about 3 days.
Howdy

Here is a thought.

From your post I assume you are a physician.

Carrying that thought forward, the time and money you devoted to the training for your profession cannot be classified as anything other than an intangible asset, as it is all between your ears. No “hard” assets whatsoever.

Is that qualitatively different from the myriad other forms of “experience” in building human capital that you seem to scorn? Would you have been better off spending your money on your education or on that luxury sports car that will of course “always be worth something”?

W B
I see the point you want to make, but the analogy is not a good one because the medical education is very valuable and the value continues indefinitely. The OP doesn't appear to value the memories from his/her vacations, and they don't have monetary value either.

TheNightsToCome
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by TheNightsToCome » Sun Nov 26, 2017 11:23 am

snackdog wrote:
Sun Nov 26, 2017 10:33 am
The fallacy is that things can bring you happiness by their inate being. This happiness tends to be quite temporary and replaced by a lust for other things: the newer car, the bigger house, the faster jet, the more brilliant sapphire, the taller pyramid. What one does with "stuff" in the way of experiences, however, can make a difference.

The 911 can be used for a grinding daily commute (made possible now that they are water cooled and less prone to overheating when idling) or wrung out on an a weekend rally cross full of competition, grit, sweat and emotion. The trophy home can be a lonely fortress of solitude and despair over upkeep, or the scene of monthly society benefit bacchanalia with pianos rolled into the swimming pool and local authorities pounding on the door. The private plane can rack up ruinous storage fees while waiting for a quarterly trip to Chicago to visit insipid in-laws, or fly constantly on sight seeing tours and ferrying sick kids to urban hospitals.

Similarly, vacations can be vacuous affairs involving tour buses loaded, cattle-style, with the blue-hair and Sansabelt crowd from flyover states, trudging through European museums and lined up at tired buffets, or they can be solo back-packing trots along the Inca Trail with no map, no reservations, no Spanish and no plan. We once did a bottom of the barrel cruise through the Canary Islands and Africa on a rusty recycled wreck of a ship full of English tradesman no doubt on their 30th anniversary trip, roasting their stomachs by the pool all day while we explored islands for hours. It cost way less than flights, food and hotels for the same itinerary ($50/pp/d) and included hilarious nightly entertainment in the lounge.

It's worth noting that the most memorable experiences tend to be of the shared disaster type. The lost passport, the mangled rental car, the incinerated RV, the all day road trip with food poisoning, the night in a tube tent with swarming mosquitos, the slog through Amazon mud. The bigger the mess, the greater the difficulty of finding a way out, and the number of comrades involved to rehash the whole thing for years after, the better.

I guess the point is to think carefully about how your dollars can bring you the most happiness and don't fall into the trap that things in and of themselves are the best answer.
"with the blue-hair and Sansabelt crowd from flyover states,"

Is this a socially acceptable bigotry in the non-flyover states?

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by TomatoTomahto » Sun Nov 26, 2017 11:38 am

TheNightsToCome wrote:"with the blue-hair and Sansabelt crowd from flyover states,"

Is this a socially acceptable bigotry in the non-flyover states?
That was a well-written and engaging post by snackdog. I’m usually first in line to out bigotry, but snackdog gets a bye, partly for being so amusing, and partly because I’m pretty sure no bigotry was intended.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by LarryAllen » Sun Nov 26, 2017 11:39 am

Obviously we are all different but for me it's experiences all the way. I am glad the media has hyped this up as I don't feel as bad for how much we spend on travel now. I have had very expensive sports cars but rarely got that "wow, I feel so excited every time I get behind the wheel" feeling. For me the vacations are a way of getting through the tough work days. The proverbial working for the weekend. Also, I have found that I have come to enjoy our vacations even more when I stopped being cheap about things on vacation. We stay at nice hotels, get the bigger room with a view, eat some nice meals, do lots of paid activities, and in all it has really upped my pleasure. I am looking forward to the next trip to Hawaii as I type this.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by lostdog » Sun Nov 26, 2017 11:42 am

eye.surgeon wrote:
Sat Nov 25, 2017 11:50 am
The trendy thing these days is to talk about spending money on "experiences", basically a new-age description of a vacation, and how it's better than spending money on "things", basically a new-age description of hard assets. The news is full of pop-science articles touting the benefits of this, most of which I think are junk science.

I bring this up as a thought exercise for bogleheads. If you look objectively at spending on vacations, it's the worst money you will ever spend. It depreciates immediately. You have literally nothing left to show for it within a couple weeks. Objectively it's a much poorer purchase than even the most frivolous luxury sports car, which will never be worth zero.

I'm not discounting the psychological and emotional benefits of taking time off work, going on vacations, spending time with family. These have real merit. I'm just rejecting the pop-science notion that spending $10k going to Thailand for 3 weeks is somehow psychologically more beneficial than buying a more expensive car or installing a home theater. For me, either of those would provide more lasting enjoyment than a vacation. Not only do I enjoy them much longer, but they have a tangible value when I'm done with them.

Mind you, my wife has accused me of being the worst vacationer in the world as I get bored after about 3 days.
We'll take freedom from debt, employers and stuff that doesn't bring any value into our lives vs buying "stuff" and working to pay that said stuff. Financial independence and simplicity. Time is our most precious commodity.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by baconavocado » Sun Nov 26, 2017 11:54 am

yangtui wrote:
Sat Nov 25, 2017 12:19 pm
Generally speaking, I tend to get a lot more out of experiences than I do things. I consider eating/drinking, traveling, and learning to be experiences. They also tend to influence my thinking and open me up to new things that last way beyond the initial experience. Traveling abroad and interacting with local people can be life-changing.
+1

I'm like this. I have no use for a home theater. I watch as little TV as possible and if I want to see a movie, I'd rather go to a real theater. Likewise with luxury cars - a regular car will get me there just as well and I'm uncomfortable with the message that is telegraphed by driving a luxury car.

Maybe you just haven't discovered the type of travel that appeals to you. My wife taught me to travel. We don't do cruises or amusement parks or package vacations, we go to learn about other cultures and other landscapes, and to challenge ourselves physically. Our trips bind us together and are among the most important experiences of our lives.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by ResearchMed » Sun Nov 26, 2017 12:22 pm

Valuethinker wrote:
Sun Nov 26, 2017 10:32 am
eye.surgeon wrote:
Sat Nov 25, 2017 11:50 am
The trendy thing these days is to talk about spending money on "experiences", basically a new-age description of a vacation, and how it's better than spending money on "things", basically a new-age description of hard assets. The news is full of pop-science articles touting the benefits of this, most of which I think are junk science.

I bring this up as a thought exercise for bogleheads. If you look objectively at spending on vacations, it's the worst money you will ever spend. It depreciates immediately. You have literally nothing left to show for it within a couple weeks. Objectively it's a much poorer purchase than even the most frivolous luxury sports car, which will never be worth zero.

I'm not discounting the psychological and emotional benefits of taking time off work, going on vacations, spending time with family. These have real merit. I'm just rejecting the pop-science notion that spending $10k going to Thailand for 3 weeks is somehow psychologically more beneficial than buying a more expensive car or installing a home theater. For me, either of those would provide more lasting enjoyment than a vacation. Not only do I enjoy them much longer, but they have a tangible value when I'm done with them.

Mind you, my wife has accused me of being the worst vacationer in the world as I get bored after about 3 days.
Driving a car is an experience.

So is watching a home movie theatre.

However when you drive a new car, the new car smell will quickly disappear, then you will see an even newer and better sports car. So you have to be wary of that. BTW the new car smell is the smell of *solvents* which you would not, normally, encourage your patients to smell?

Libya and Syria? Much as I mourn for those countries, I am so glad that I went to see them, whilst I still could. Much of what I saw there, no longer exists.

You have but one life, and it may end sooner than we think.
Our biggest regrets about "experiences/things/etc." (and as mentioned, some things can also be experiences, etc., as Valuethinker just mentioned, and we also did, above) involve travel, which may be why we do emphasize it.

Unfortunately, there are locales that we will now never be able to visit, places we would dearly have loved to see/experience.

Some are now "unavailable" due to political strife, and chances seem slim that things will settle down enough, soon enough, for us to go, given our ages and health.

And for the same reason, there are some more active locales that we simply cannot do now, either because we worry about "activity level", or in one case, because a physician strongly recommended that we *not* go (and we can only partially argue... and the stakes are too high...).

Even as it is, there are some places we go, where DH heads off with a guide, but I remain behind, be it for a full outing or just "a quick look over there", so at least *he* can do what he can indeed still do.

We are also prepared to travel with someone to help us, if that's what it takes at some point in the future.

There are very few "material things" we want now. Quite the opposite, as we face the prospect of downsizing.
But in the past, there were some "things" we "wanted", and we still enjoy using or looking at them.
Some of them also have "memories" involved. Others, we still enjoy the beauty/workmanship.

Also, a really special dinner out, with something that I couldn't cook or couldn't cook as well... that can be a very special evening "experience", one that for us is "worth it".
Ditto a very special bottle of wine, even if just with some nice cheese... :happy

There are many types of "special".

RM
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by KlingKlang » Sun Nov 26, 2017 12:24 pm

baconavocado wrote:
Sun Nov 26, 2017 11:54 am
Maybe you just haven't discovered the type of travel that appeals to you. My wife taught me to travel. We don't do cruises or amusement parks or package vacations, we go to learn about other cultures and other landscapes, and to challenge ourselves physically. Our trips bind us together and are among the most important experiences of our lives.
This. If your idea of a vacation is to take a first class flight and a limo to a 5 star hotel and never leave the premises until your return trip then your experiences anywhere in the world will seem boringly similar. My most memorable travel experiences occurred while I was working in foreign countries (and with my cheap employer definitely not traveling first class).

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by avalpert » Sun Nov 26, 2017 12:29 pm

eye.surgeon wrote:
Sat Nov 25, 2017 11:50 am
The trendy thing these days is to talk about spending money on "experiences", basically a new-age description of a vacation, and how it's better than spending money on "things", basically a new-age description of hard assets. The news is full of pop-science articles touting the benefits of this, most of which I think are junk science.
Frankly, if you got your science directly from the journals you might realize that it is very much not junk science and the literature is quite consistent here. People really do value 'experience' more than 'things' over time. So I find your premise is false based on the evidence. That said, experiences does not equal vacations and not all vacations money is well spent (a lot of it is spent on things rather than enhancing the experience).
I bring this up as a thought exercise for bogleheads. If you look objectively at spending on vacations, it's the worst money you will ever spend.
Nope, this, for me, is total nonsense. The money I have spent on travelling is the best I spend - it doesn't depreciate at all (maybe once dimentia sets in) and I have plenty left to show for it between my fondest memories, personal growth, amazing stories that serve me well in all sort of social and business situations. Objectively, it is a far better purchase than a sports car by orders of magnitude.
I'm just rejecting the pop-science notion that spending $10k going to Thailand for 3 weeks is somehow psychologically more beneficial than buying a more expensive car or installing a home theater.
So you are rejecting a total strawman - that's pretty sad. The measure of the experience is the cost and $10k for 3 weeks in Thailand is likely no more valuable than $4k (or less, I'm throwing out a random number). That said, $10k more on a car or a TV probably is worth it either - not by any stretch.
For me, either of those would provide more lasting enjoyment than a vacation.
I bet if I put you in a few thousand dollar home theater set-up and then one that cost $10k more (without you knowing which is which) you wouldn't be able to differentiate the level of enjoyment.
Mind you, my wife has accused me of being the worst vacationer in the world as I get bored after about 3 days.
If you are getting bored after 3 days you are doing something very wrong - I mean that seriously there are a vast array of experiences for anyone's preferences that should keep you engaged for a lot longer than that (particularly if money to spend isn't a constraint). It sounds like you can't possibly judge the value of experiences over things because you have never really had any.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by avalpert » Sun Nov 26, 2017 12:41 pm

LuigiLikesPizza wrote:
Sun Nov 26, 2017 4:59 am
At the end of the day, it's all still consumption.

Claiming that money spent on experiences is somehow superior to money spent on hard assets gives those folks in the first group the psychological comfort of staking out the intellectual high ground.

It's snooty and meaningless.

To use that well-worn phrase: to each their own first world problems.
This is a ridiculous statement. Of course not all consumption is equal - it will have different utility value to the consumer which will make it (from a purely economic rationality perspective) more or less rational consumption. The knowledge that psychologically we get more lasting utility value from experiences or things is a valuable insight to help us (irrational, impulsive creatures) make more rational consumption choices.

Intellectual high ground isn't pointless and just because those with it may be snooty it doesn't make it meaningless - just sour grapes for those in the low ground.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by Pacman » Sun Nov 26, 2017 12:44 pm

OP - My take is that the 'experiences over things' movement is just slick marketing to get people to rationalize overspending on vacations and the like. In posts within this forum and others, I frequently see people rationalizing their massive budgets dedicated towards vacations, bar outings, high-end restuarant eating, and other consumer type activities all in the name of 'experiences.'

In some circles, this is also the socially acceptable way to brag about your success and wealth. If you are a millennial and successful, it might be considered ostentatious to buy a new Mercedes. But if you post pictures all over social media showing yourself hiking through "machu picchu" (Millennials seem to love this place) or New Zealand, it's an indirect way to show how 'successful' you are, since you can afford the 'best' experiences.

My view is that the experiences that most people talk about (i.e. vacations, Hamilton performances, high end restaurant eating) are on the same level as things. These experiences are basically commodities that are packaged as things.

Nisiprius had a great post above on the actual types of experiences that bring about happiness - "they feel like work and involve skill-building." I would include in this bucket experiences like learning an instrument, learning a language, getting in shape, writing a book, teaching your kid to read, etc.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by hightower » Sun Nov 26, 2017 12:46 pm

eye.surgeon wrote:
Sat Nov 25, 2017 11:50 am
The trendy thing these days is to talk about spending money on "experiences", basically a new-age description of a vacation, and how it's better than spending money on "things", basically a new-age description of hard assets. The news is full of pop-science articles touting the benefits of this, most of which I think are junk science.

I bring this up as a thought exercise for bogleheads. If you look objectively at spending on vacations, it's the worst money you will ever spend. It depreciates immediately. You have literally nothing left to show for it within a couple weeks. Objectively it's a much poorer purchase than even the most frivolous luxury sports car, which will never be worth zero.

I'm not discounting the psychological and emotional benefits of taking time off work, going on vacations, spending time with family. These have real merit. I'm just rejecting the pop-science notion that spending $10k going to Thailand for 3 weeks is somehow psychologically more beneficial than buying a more expensive car or installing a home theater. For me, either of those would provide more lasting enjoyment than a vacation. Not only do I enjoy them much longer, but they have a tangible value when I'm done with them.

Mind you, my wife has accused me of being the worst vacationer in the world as I get bored after about 3 days.
There's noting wrong with taking some pleasure in acquiring new material possessions. That's fine to do from time to time if it actually adds some joy to your life. But, when I talk about experiences being better than material things I am referring to making new memories. If you think about it, memories are really all that matter in life. When you get together with friends and family, most of what you share together is memories of your past, fun times, experiences, etc. How often do you sit around and look at your collection of TV's or watches and think "boy isn't life grand"? Instead you sit and tell stories, laugh together, etc. A fun vacation or other experience with friends or family will result in years of happy things to talk about remembering the times you had on that trip or doing whatever. A bunch of "things" you buy yourself won't provide that same sort of long lasting enjoyment. And experiences don't have to be vacations...it could be taking dancing lessons with your spouse, learning how to cook, building a shed with your son, etc, etc.
When you're laying on your death bed and thinking about your life, you won't really care much about all the stuff you have still sitting at home, but you will absolutely cherish all the good times you had with loved ones.
It sounds to me like you have more of an issue with junk/pop "science" articles and find them obnoxious? I agree with you on that. Just stop reading them:)

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by eye.surgeon » Sun Nov 26, 2017 12:47 pm

Pacman wrote:
Sun Nov 26, 2017 12:44 pm
OP - My take is that the 'experiences over things' movement is just slick marketing to get people to rationalize overspending on vacations and the like. In posts within this forum and others, I frequently see people rationalizing their massive budgets dedicated towards vacations, bar outings, high-end restuarant eating, and other consumer type activities all in the name of 'experiences.'

In some circles, this is also the socially acceptable way to brag about your success and wealth. If you are a millennial and successful, it might be considered ostentatious to buy a new Mercedes. But if you post pictures all over social media showing yourself hiking through "machu picchu" (Millennials seem to love this place) or New Zealand, it's an indirect way to show how 'successful' you are, since you can afford the 'best' experiences.

My view is that the experiences that most people talk about (i.e. vacations, Hamilton performances, high end restaurant eating) are on the same level as things. These experiences are basically commodities that are packaged as things.
This is exactly the point I was trying to make although you did a better job.
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by avalpert » Sun Nov 26, 2017 12:49 pm

nisiprius wrote:
Sat Nov 25, 2017 12:07 pm
One of the reasons why "vacations" don't feel satisfying is that you are offered prepackaged pseudo-experiences that require no skill development.
No, you are offered an (almost literally) infinite number of possibilities - if you choose prepackaged pseudo-experiences for your vacations that is on you.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by praxis » Sun Nov 26, 2017 12:56 pm

It's interesting to read these responses. The preference clearly depends on the person. Those who dislike vacations or trips won't be convinced to prefer them to buying something "hard" with the money instead. But I can't agree that preferring experiences to hard assets is a "fallacy".

I believe I am financially secure. I can't KNOW the future, but I FEEL confident that I am secure because of my savings vs. my age and financial responsibilities. And I have plenty of disposable income to spend as I wish.

I spent my life earning and saving and learning to invest carefully. Now, it's a challenge to spend money for me. Buying a better item than the one I currently own, just because I can or because there is a new model available feels wasteful.

Coming up with an adventure works better for me. Often, an adventure hardly costs anything, but for me, I get a higher, longer-lasting lift from them.

And, like others in this thread, lots of those "experiences" involve sharing my time with others. But that's me. If someone gets high from their purchase of an item, I think they've found a good deal. Enjoy it!

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by avalpert » Sun Nov 26, 2017 1:02 pm

Pacman wrote:
Sun Nov 26, 2017 12:44 pm
But if you post pictures all over social media showing yourself hiking through "machu picchu" (Millennials seem to love this place) or New Zealand, it's an indirect way to show how 'successful' you are, since you can afford the 'best' experiences.
This may be true for some people (of course in a way no different than those buying cars or home theaters) but I don't think it is true for most of the people I meet while travelling. When I hiked Machu Picchu (as an aside, why did you put that in quotation marks and not capitalize it - it is a proper noun and a real place as much as New Zealand) and traveled through New Zealand I was young, relatively poor and had no major successes in life yet to point to - they were just highly valuable experiences and great uses of my limited money and time.

Most of the people I meet on the road, whether the base camp for a high-end safari outfit in Zambia, backpacker haven's in Panama or family/group vacationers diving in Bonaire aren't their to take selfies and brag to their friends - they are genuinely engaged in the experience for its own sake.
My view is that the experiences that most people talk about (i.e. vacations, Hamilton performances, high end restaurant eating) are on the same level as things. These experiences are basically commodities that are packaged as things.
I think this is also a ridiculous statement. 'Vacations' is a broad word that covers very personal experiences, you can't possibly capture it all to package as a commodity (commoditized vacations on the other hand may be a poor choice for your travel spend). Broadway musicals, while not my cup of tea, are art - I guess one could view all art as just a commoditized thing but the history of humanities drive for and value place on art would seem to contradict that. And high-end restaurants, well that depends on the restaurant - I personally prefer low-end ethnic restaurants as better value for my dollar but if the comparison was between one of those mid-priced chains (which are commoditized things) and a high-end restaurant with a chef trying interesting things I wouldn't hesitate to spend the money.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by jebmke » Sun Nov 26, 2017 1:07 pm

avalpert wrote:
Sun Nov 26, 2017 12:29 pm
If you are getting bored after 3 days you are doing something very wrong - I mean that seriously there are a vast array of experiences for anyone's preferences that should keep you engaged for a lot longer than that (particularly if money to spend isn't a constraint). It sounds like you can't possibly judge the value of experiences over things because you have never really had any.
I could fill pages with descriptions of vivid memories of experiences - some vacation, some not. Barring the onset of dementia most of these will outlast any object I have ever purchased.
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by IGWT » Sun Nov 26, 2017 1:18 pm

Imo, Good misconception on the original post.

Try spending 3 weeks in italy or spain or thailand and see how your perspective of life changes.

Your vacation or experience spending never returns a negative yeild, whereas some of your hard assets like stocks, real estate can crash and be pennies on the dollar invested.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by Dottie57 » Sun Nov 26, 2017 1:22 pm

nisiprius wrote:
Sat Nov 25, 2017 12:07 pm

My own personal philosophy is that what tends to give the best return in happiness is stuff that feels like work and involves skill-building. One of the reasons why "vacations" don't feel satisfying is that you are offered prepackaged pseudo-experiences that require no skill development. You don't come back from Walt Disney World Resort knowing how to do something you didn't know before. Any theme park, you don't need to know anything, they strap you into the thrill ride and you come out thrilled... but knowing nothing more except what it felt like.
My best vacation was on a rocky island off he coast and of Maine. It was the only time where I never counted the days to get home. It was a shared vacation with about 8 people in the cottage. Many people I did not know. Ni phone. No tv. Sporadic radio. A large porch and pech furniture.. Lots of conversation. Lots of watching out the screened in porch. The cottage was on a cove and the tidal changes were very apparent. Sometimes fog rolled in ,lovely to watch and feel.

It was lke living outside of time. Didn't learn much but thoroughly enjoyed myself.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by Sandtrap » Sun Nov 26, 2017 1:28 pm

nisiprius wrote:
Sat Nov 25, 2017 12:07 pm
My own personal philosophy is that what tends to give the best return in happiness is stuff that feels like work and involves skill-building. One of the reasons why "vacations" don't feel satisfying is that you are offered prepackaged pseudo-experiences that require no skill development. You don't come back from Walt Disney World Resort knowing how to do something you didn't know before. Any theme park, you don't need to know anything, they strap you into the thrill ride and you come out thrilled... but knowing nothing more except what it felt like.
+1
The lasting gratification of self-enrichment, no matter the source . . experience or "assets", is like compound interest. And, the principal, which is "Self", just grows and grows. And, the more we grow the more we are capable of experiencing and growing our own very personal "In"dex Fund.
j :D

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by afan » Sun Nov 26, 2017 2:37 pm

fishandgolf wrote:
Sat Nov 25, 2017 3:18 pm
My wife loves to travel.....I love my wife :D ....therefore, I must travel. :|

Personally, I do not enjoy travel.....I don't mind the vacation part.....the travel is a PITA. Airports :annoyed , rental cars, dragging luggage everywhere :annoyed , wearing the same clothes every other day, finding good restaurants, sleeping in crappy beds, crowds.........

My wife loves to travel......I love my wife :D ....therefore, I must travel :|
After years of misery, we concluded we would both be happier if dear wife travelled alone or with friends and relatives. For me travel is torture. In my life I can think of one trip from which I returned thinking it was worth the time, hassle and cost. I would much rather stay home and read a book

Meeting people in Nice would require going to France again, which is not going to happen. Same for surfing in Hawaii, diving in Grand Cayman, or spending a lot of money to take a trip to X. If I have been there I am not going back. If I have never been there that will also be true the day I die. Unless X is under a two hour drive and I can sleep in my own bed, I am not going. Not if I have a choice

But that does not mean I will spend the money on physical objects instead. That assumes one is forced to spend a certain amount on entertainment and you only get to decide how to waste some fixed sum.

On the topic of spending money on "experience vs things", I find it a false choice. It ignores the third alternative "neither." The things I enjoy are local and either cheap or free. Read a book, take a walk... Learn something or get some exercise.

Instead of buying a car or flying to Europe, I would rather buy more shares of VTI.
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by DaftInvestor » Sun Nov 26, 2017 2:41 pm

"Fallasy" - if someone prefers spending their hard earned money on an experience versus a household item how is that a fallasy?

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by afan » Sun Nov 26, 2017 2:47 pm

IGWT wrote:
Sun Nov 26, 2017 1:18 pm
Imo, Good misconception on the original post.

Try spending 3 weeks in italy or spain or thailand and see how your perspective of life changes.

Your vacation or experience spending never returns a negative yeild, whereas some of your hard assets like stocks, real estate can crash and be pennies on the dollar invested.

Wow. That assumes the experience itself was not so miserable that you wished you had never gone.

Spending three weeks in prison I am sure would change my perspective in life as well. But I am not going to do it if I have a choice.

Once I was too old to be drafted the chances that I would ever spend three weeks away from home went to zero. A trip like that would have such a hugely negative yield that there is no way I would ever plan it, let alone get on the plane.

For almost every trip I have ever taken, by the time I got to the airport I was ready to turn around and head home. For the few outliers that point still came before we took off.
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by stan1 » Sun Nov 26, 2017 2:49 pm

I don't like X. Anyone who spends money on X is making a mistake.
I like X. Anyone who doesn't spend money on X is really missing out.

Replace X with:
cars
steak
meals out
gatherings with friends
organic
fresh vegetables and fruits
alcohol
purchased music
purchased news
American Girl dolls, video games
vacations
vacation homes
rental property
any real estate in a HCOL area
any real estate in a LCOL area
gold
jewelry
kids
pets
horses
boats
RVs
bicycles, motorcycles, skateboards
yoga (cold or hot)
gym membership

You get the idea .... it's a personal preference.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by afan » Sun Nov 26, 2017 2:51 pm

jebmke wrote:
Sun Nov 26, 2017 1:07 pm
avalpert wrote:
Sun Nov 26, 2017 12:29 pm
If you are getting bored after 3 days you are doing something very wrong - I mean that seriously there are a vast array of experiences for anyone's preferences that should keep you engaged for a lot longer than that (particularly if money to spend isn't a constraint). It sounds like you can't possibly judge the value of experiences over things because you have never really had any.
I could fill pages with descriptions of vivid memories of experiences - some vacation, some not. Barring the onset of dementia most of these will outlast any object I have ever purchased.
I expect many of the objects I have purchased to outlive me. Hence they should outlive my memory.
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by dbr » Sun Nov 26, 2017 2:54 pm

stan1 wrote:
Sun Nov 26, 2017 2:49 pm
I don't like X. Anyone who spends money on X is making a mistake.
I like X. Anyone who doesn't spend money on X is really missing out.

. . .snip. . .

You get the idea .... it's a personal preference.
Excellent.

For my own part I have things that have been valuable and things that haven't. I have had experiences that have been valuable and experiences that have not. What is a worthwhile use of money is personal and comes in many varieties. Also things are valuable in the experience of them, so the whole distinction may be ill-defined.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by Maya1234 » Sun Nov 26, 2017 2:55 pm

afan wrote:
Sun Nov 26, 2017 2:47 pm
IGWT wrote:
Sun Nov 26, 2017 1:18 pm
Imo, Good misconception on the original post.

Try spending 3 weeks in italy or spain or thailand and see how your perspective of life changes.

Your vacation or experience spending never returns a negative yeild, whereas some of your hard assets like stocks, real estate can crash and be pennies on the dollar invested.

Wow. That assumes the experience itself was not so miserable that you wished you had never gone.

Spending three weeks in prison I am sure would change my perspective in life as well. But I am not going to do it if I have a choice.

Once I was too old to be drafted the chances that I would ever spend three weeks away from home went to zero. A trip like that would have such a hugely negative yield that there is no way I would ever plan it, let alone get on the plane.

For almost every trip I have ever taken, by the time I got to the airport I was ready to turn around and head home. For the few outliers that point still came before we took off.
Could not agree more.The fact is that there is a minority of us out there that think a three week vacation is 3x worse than a 1 week vacation and that even a one week vacation is not very appealing.

As is true of many majorities, those who see only the positives of vacations have no ability to understand the minority view. They often don't even acknowledge that it exists. It literally never occurs to them.

As is true of many minorities those of us who despise travel are well aware that most don't think this way.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by arcticpineapplecorp. » Sun Nov 26, 2017 2:56 pm

to each his/her own and great comments everyone. Only thing to add is I believe the Easterlin Paradox and Gilovich and Kumar's research found it's better to spend money on experiences than things:
It’s counterintuitive that something like a physical object that you can keep for a long time doesn’t keep you as happy as long as a once-and-done experience does. Ironically, the fact that a material thing is ever present works against it, making it easier to adapt to. It fades into the background and becomes part of the new normal. But while the happiness from material purchases diminishes over time, experiences become an ingrained part of our identity.”
source: https://www.fastcompany.com/3043858/the ... -not-thing
It's a paradox because it's not what you'd expect (and not your experience, but is so for others judging by the responses) and yet it makes sense when you think about it.
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by DrGoogle2017 » Sun Nov 26, 2017 2:56 pm

afan wrote:
Sun Nov 26, 2017 2:37 pm
fishandgolf wrote:
Sat Nov 25, 2017 3:18 pm
My wife loves to travel.....I love my wife :D ....therefore, I must travel. :|

Personally, I do not enjoy travel.....I don't mind the vacation part.....the travel is a PITA. Airports :annoyed , rental cars, dragging luggage everywhere :annoyed , wearing the same clothes every other day, finding good restaurants, sleeping in crappy beds, crowds.........

My wife loves to travel......I love my wife :D ....therefore, I must travel :|
After years of misery, we concluded we would both be happier if dear wife travelled alone or with friends and relatives. For me travel is torture. In my life I can think of one trip from which I returned thinking it was worth the time, hassle and cost. I would much rather stay home and read a book

Meeting people in Nice would require going to France again, which is not going to happen. Same for surfing in Hawaii, diving in Grand Cayman, or spending a lot of money to take a trip to X. If I have been there I am not going back. If I have never been there that will also be true the day I die. Unless X is under a two hour drive and I can sleep in my own bed, I am not going. Not if I have a choice

But that does not mean I will spend the money on physical objects instead. That assumes one is forced to spend a certain amount on entertainment and you only get to decide how to waste some fixed sum.

On the topic of spending money on "experience vs things", I find it a false choice. It ignores the third alternative "neither." The things I enjoy are local and either cheap or free. Read a book, take a walk... Learn something or get some exercise.

Instead of buying a car or flying to Europe, I would rather buy more shares of VTI.
Or 4th choice, do both. I’m both a homebody and a traveler. I do own a nice home theater and love to watch the history and natural channels. I wouldn’t never go to the Serengeti in Africa or the Galapagos areas, Richard Attenborough did a much better job filming the wild life there, better to watch on my home theater. But traveling is also my form of guaranteed exercise, especially in Europe. I walked nearly 2-3 miles everyday in UK. I never thought I could, it literally saved my live. I never thought I could walk that much. And I was not even sick before that. I just felt healthier in general.
For my husband it stimulates his brain. Staying at home with the same routine everyday can make his brain grow dull. He has so much energy after just seeing the Grand Canyon, Bryce and Zion Canyons.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by emoore » Sun Nov 26, 2017 3:09 pm

avalpert wrote:
Sun Nov 26, 2017 12:41 pm
LuigiLikesPizza wrote:
Sun Nov 26, 2017 4:59 am
At the end of the day, it's all still consumption.

Claiming that money spent on experiences is somehow superior to money spent on hard assets gives those folks in the first group the psychological comfort of staking out the intellectual high ground.

It's snooty and meaningless.

To use that well-worn phrase: to each their own first world problems.
This is a ridiculous statement. Of course not all consumption is equal - it will have different utility value to the consumer which will make it (from a purely economic rationality perspective) more or less rational consumption. The knowledge that psychologically we get more lasting utility value from experiences or things is a valuable insight to help us (irrational, impulsive creatures) make more rational consumption choices.

Intellectual high ground isn't pointless and just because those with it may be snooty it doesn't make it meaningless - just sour grapes for those in the low ground.
Yes it is equal. The money spent is the same. Doesn’t matter what it was for. Money spent on experiences isn’t any different than money spent of things. It’s still spending. It would be interesting to see the responses in this forum if you were to take a 50k vacation vs spending 50k on a Tesla. My guess is the vacation will be much better received even if one can afford either one.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by randomguy » Sun Nov 26, 2017 3:23 pm

emoore wrote:
Sun Nov 26, 2017 3:09 pm
Yes it is equal. The money spent is the same. Doesn’t matter what it was for. Money spent on experiences isn’t any different than money spent of things. It’s still spending. It would be interesting to see the responses in this forum if you were to take a 50k vacation vs spending 50k on a Tesla. My guess is the vacation will be much better received even if one can afford either one.

No doubt. But it is also sort of a false dichotomy to split things into experiences and assets/goods. Is that Tesla a material good or an experience (i.e. the experience of quietness when driving, rapid accelerations, smiling when you get in the car,...)? What about spending 500 on dinner? Is that an experience of eating or a consumption of materialistic goods?

There is a specific type of experience that has value increasing happiness versus material goods. And a lot of that benefit is only reached after hitting a certain level of material goods. Going from a bus to car increase most peoples happiness a lot. Going to a BMW gives a much smaller gap. But the same thing works for "Experiences". Z

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by dbr » Sun Nov 26, 2017 3:30 pm

randomguy wrote:
Sun Nov 26, 2017 3:23 pm
emoore wrote:
Sun Nov 26, 2017 3:09 pm
Yes it is equal. The money spent is the same. Doesn’t matter what it was for. Money spent on experiences isn’t any different than money spent of things. It’s still spending. It would be interesting to see the responses in this forum if you were to take a 50k vacation vs spending 50k on a Tesla. My guess is the vacation will be much better received even if one can afford either one.

No doubt. But it is also sort of a false dichotomy to split things into experiences and assets/goods. Is that Tesla a material good or an experience (i.e. the experience of quietness when driving, rapid accelerations, smiling when you get in the car,...)? What about spending 500 on dinner? Is that an experience of eating or a consumption of materialistic goods?

There is a specific type of experience that has value increasing happiness versus material goods. And a lot of that benefit is only reached after hitting a certain level of material goods. Going from a bus to car increase most peoples happiness a lot. Going to a BMW gives a much smaller gap. But the same thing works for "Experiences". Z
I agree. There is a false dichotomy here. If we want to count things as such, we should imagine the value of owning something that is locked away, unseen, never used. Some investments are that way.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by LarryAllen » Sun Nov 26, 2017 3:34 pm

afan wrote:
Sun Nov 26, 2017 2:47 pm
IGWT wrote:
Sun Nov 26, 2017 1:18 pm
Imo, Good misconception on the original post.

Try spending 3 weeks in italy or spain or thailand and see how your perspective of life changes.

Your vacation or experience spending never returns a negative yeild, whereas some of your hard assets like stocks, real estate can crash and be pennies on the dollar invested.

Wow. That assumes the experience itself was not so miserable that you wished you had never gone.

Spending three weeks in prison I am sure would change my perspective in life as well. But I am not going to do it if I have a choice.

Once I was too old to be drafted the chances that I would ever spend three weeks away from home went to zero. A trip like that would have such a hugely negative yield that there is no way I would ever plan it, let alone get on the plane.

For almost every trip I have ever taken, by the time I got to the airport I was ready to turn around and head home. For the few outliers that point still came before we took off.

The beauty of life is we all like different things. I wish I enjoyed relaxing by the pool in my backyard as much as I do relaxing by the pool in Hawaii with $10 beers but such is life. I am thus envious, in a way, of your appreciating being home so much.

On the other hand I took a month long vacation that totally changed my business, for the better, and I now make more money for less time spent. My change in mindset happened during that vacation. I feel fortunate to have had that eye-opener. Too hard to explain but it was life changing.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by NotWhoYouThink » Sun Nov 26, 2017 3:35 pm

Maybe the fallacy is the belief that a brief synopsis of study results accurately describes the response of every human on earth.

Most studies are flawed in some way. Most show a range of responses, and report on the trends or averages. That doesn't mean there aren't outliers.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by avalpert » Sun Nov 26, 2017 3:47 pm

emoore wrote:
Sun Nov 26, 2017 3:09 pm
avalpert wrote:
Sun Nov 26, 2017 12:41 pm
LuigiLikesPizza wrote:
Sun Nov 26, 2017 4:59 am
At the end of the day, it's all still consumption.

Claiming that money spent on experiences is somehow superior to money spent on hard assets gives those folks in the first group the psychological comfort of staking out the intellectual high ground.

It's snooty and meaningless.

To use that well-worn phrase: to each their own first world problems.
This is a ridiculous statement. Of course not all consumption is equal - it will have different utility value to the consumer which will make it (from a purely economic rationality perspective) more or less rational consumption. The knowledge that psychologically we get more lasting utility value from experiences or things is a valuable insight to help us (irrational, impulsive creatures) make more rational consumption choices.

Intellectual high ground isn't pointless and just because those with it may be snooty it doesn't make it meaningless - just sour grapes for those in the low ground.
Yes it is equal. The money spent is the same. Doesn’t matter what it was for. Money spent on experiences isn’t any different than money spent of things. It’s still spending.
The money spent is the same but the value received for that money isn't and the goal isn't to maximize money spent (or saved) it is to maximize utility. So it absolutely matters what it was spent for and if it was spent in a way that yields greater long-term utility (which the science says is experiences over things) then it is a better use of that money.
It would be interesting to see the responses in this forum if you were to take a 50k vacation vs spending 50k on a Tesla. My guess is the vacation will be much better received even if one can afford either one.
I don't think so - I think in both threads you will have a healthy mix of people who say go for it and those who say not to.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by randomguy » Sun Nov 26, 2017 4:02 pm

dbr wrote:
Sun Nov 26, 2017 3:30 pm

I agree. There is a false dichotomy here. If we want to count things as such, we should imagine the value of owning something that is locked away, unseen, never used. Some investments are that way.
People here find locking up there money in a house to be a liberating experience.:) Any investment will be liquidated at some point (i.e. maybe by your heirs) so it really just defers the choice. At some point that money will be spent.

Personally I find the material goods I buy make me very happy. But I also only buy material goods that will make me happy. I know buying a 500 dollar polo shirt will not make me any happier than a 50 dollar one so I don't buy them. I know some experiences make me happy (i.e. playing a round of gold with my dad) make me happy and others don't (i.e. going to some generic beach and sitting around for a week). The only tricky part is figuring out the tradeoffs (i.e. will spending more to have a car that doesn't cause hearing damage worth more or less than a trip to disney land?) between the zillion choices that are out there.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by avalpert » Sun Nov 26, 2017 4:03 pm

DrGoogle2017 wrote:
Sun Nov 26, 2017 2:56 pm
afan wrote:
Sun Nov 26, 2017 2:37 pm
fishandgolf wrote:
Sat Nov 25, 2017 3:18 pm
My wife loves to travel.....I love my wife :D ....therefore, I must travel. :|

Personally, I do not enjoy travel.....I don't mind the vacation part.....the travel is a PITA. Airports :annoyed , rental cars, dragging luggage everywhere :annoyed , wearing the same clothes every other day, finding good restaurants, sleeping in crappy beds, crowds.........

My wife loves to travel......I love my wife :D ....therefore, I must travel :|
After years of misery, we concluded we would both be happier if dear wife travelled alone or with friends and relatives. For me travel is torture. In my life I can think of one trip from which I returned thinking it was worth the time, hassle and cost. I would much rather stay home and read a book

Meeting people in Nice would require going to France again, which is not going to happen. Same for surfing in Hawaii, diving in Grand Cayman, or spending a lot of money to take a trip to X. If I have been there I am not going back. If I have never been there that will also be true the day I die. Unless X is under a two hour drive and I can sleep in my own bed, I am not going. Not if I have a choice

But that does not mean I will spend the money on physical objects instead. That assumes one is forced to spend a certain amount on entertainment and you only get to decide how to waste some fixed sum.

On the topic of spending money on "experience vs things", I find it a false choice. It ignores the third alternative "neither." The things I enjoy are local and either cheap or free. Read a book, take a walk... Learn something or get some exercise.

Instead of buying a car or flying to Europe, I would rather buy more shares of VTI.
Or 4th choice, do both. I’m both a homebody and a traveler. I do own a nice home theater and love to watch the history and natural channels. I wouldn’t never go to the Serengeti in Africa or the Galapagos areas, Richard Attenborough did a much better job filming the wild life there, better to watch on my home theater.
Oh boy is that off. The experience between seeing the wildlife in person is vastly different (and I would say far superior in all ways) to that of watching even the best wildlife filmographers. You might not want to try to capture everything on video and leave that to the pros, but standing face to face with an elephant in the wild, or tracking up to rhinos, or watching a leopard stalk its prey and pounce, or following an octopus as it instantly changes its colors is like nothing you will ever see on a screen (and I too own a nice home theater set up and watch a lot of it).

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by halfnine » Sun Nov 26, 2017 4:14 pm

I have found that for me spending money on "hard assets" and on "experiences" both have had diminishing returns. However, spending money to buy time to spend with family and friends has not had diminishing returns.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by SpecialK22 » Sun Nov 26, 2017 4:15 pm

I personally believe that shared experiences are the best things to spend money on. Granted, there are many solo trips that I have done which were great. A big part of that though was meeting new people, so I guess it still comes down to shared experiences. There are consumption items that in hindsight I also consider good purchases. Mostly though it comes down to spending time with others that yields the most happiness for me, and therefore best value.

I do agree that there exists conspicuous consumption with traveling, or participating in any other experience. I think it's impossible to get away from that, and marketers certainly take advantage. But that doesn't mean you can't travel or participate in other activities for low cost.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by bligh » Sun Nov 26, 2017 4:16 pm

Wildebeest wrote:
Sat Nov 25, 2017 9:57 pm
bligh wrote:
Sat Nov 25, 2017 4:10 pm
Wildebeest wrote:
Sat Nov 25, 2017 3:30 pm
Harari's "Sapiens" on world travel" (reading his book is an experience, which changed my outlook on life, very much recommended):

[
I could not disagree more. We are not chimpanzees. As humans , many of us are wired to constantly seek out new and unfamiliar things. What is your favorite movie? Try watching only that movie, every day for the rest of your life. What is your favorite food? What is the healthiest food you can think of? Eat that and only that for the rest of your life. Listen to the same song and only that song for the rest of your life. We seek novelty, always have and always will. It is in of our nature. I don't travel because of some romanticism, I do it because I enjoy the novelty. I remember and cherish moments as mundane as gassing up my car at a random gas station at night, or using a rest room at a train station, or being lost at night in an unfamiliar village, not because it was an "exotic" place, but because it was a new place or a new experience. But, I couldn't tell you what I was doing on Thursday 2 weeks ago without looking it up.

The urge to travel isn't some new western myth, people have been exploring the world since there were people. People who have had the means, have been traveling for thousands of years, many simply for the sake of it. It is only now that the masses have the ability that they are doing so as well. In fact, non western cultures have been, and continue to travel extensively as well, and as one would expect, more affluent non-western cultures engage in more travel. Also back in the days of Ancient Egypt the speed and technology of travel allowed for novelty and variance even while staying within Egyptian borders. They didn't have to go far to come across a new uncharted and unexpected experience, there were no maps and no GPS, and it took days to travel what we now consider a long commute to work. Also the risk of casual travel was much greater, you could be captured, killed or eaten by wild animals. The explorers from the time of the Egyptians would have to have been more like true adrenaline and adventure junkies, not just travelers. They would need to have more in common with Shackleton or Magellan.

I wont say that every person that travels does it for the novelty and the adventure, I am sure many do it for the selfies or so they can check it off the list. However, to quote a famous tv show, there are people who are wired "to explore strange new worlds, to seek out new life, and new civilizations, to boldly go where no one has gone before". :wink:

Blame it on evolution/god putting the dopamine receptors in our brain, not on some western myth. :sharebeer

I am sure the physicians on this message board understand this stuff much better than I do, but looks like monkeys do seek out novelty : https://www.ncbi.nlm.nih.gov/pubmed/24911320
And here I thought I had quoted some interesting sections of a book I enjoyed and felt it would provide a different perspective to this thread. If you have an interest read the book "Sapiens" and you may extend your horizon.
Thanks for the recommendation, I actually own the book but it has been pretty far down my reading list. I came across this book after he was interviewed on a podcast I follow over his new book, I believe it's called Homo Deus. I will pick Sapiens up next, once I finish reading my current one. It is definitely a subject I find interesting.

Btw, I was aware that you were quoting from his book, and I appreciated you mentioning it, my disagreement was simply directed at the author's argument. That isn't to say that I will disagree with everything in his book of course, perhaps he may even change my mind once I read that passage in context of his overall argument.

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by Lynette » Sun Nov 26, 2017 4:21 pm

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Re: The fallacy of spending money on "experiences" vs hard assets

Post by afan » Sun Nov 26, 2017 4:31 pm

avalpert wrote:
Sun Nov 26, 2017 4:03 pm
Oh boy is that off. The experience between seeing the wildlife in person is vastly different (and I would say far superior in all ways) to that of watching even the best wildlife filmographers. You might not want to try to capture everything on video and leave that to the pros, but standing face to face with an elephant in the wild, or tracking up to rhinos, or watching a leopard stalk its prey and pounce, or following an octopus as it instantly changes its colors is like nothing you will ever see on a screen (and I too own a nice home theater set up and watch a lot of it).
I am sure it is different. But I would vastly prefer my interactions with elephants, rhinos and leopards to be seeing photographs, while safely very far away. Out of earshot, far beyond smelling distance, on another continent and in the comfort of my own home. If I were to find myself, somehow, in Africa, there is no way I would go on safari. I would stay at the hotel until I could get a flight home. But since I would never be there in the first place unless I had been kidnapped, I would be unlikely to have a choice of how to escape. If I were lucky, maybe I could jump out a window.

I did find some of the original "experience vs objects" research.
To Do or to Have? That Is the Question.

Van Boven, Leaf; Gilovich, Thomas; Journal of Personality and Social Psychology, Vol 85(6), Dec, 2003 pp. 1193-1202. Publisher: American Psychological Association; [Journal Article]
Subjects: Consumer Behavior; Happiness; Life Experiences;
They surveyed people, asking them which they found more satisfying at the time. They asked them to remember something they had done in the past and how long the good feelings lasted. The differences were consistent, many were statistically significant, but they were not large. In another paper Gilovich said that the difference was in part because the experiences were also social, while the possessions were solitary.

The few papers I have read did not address for how many people the differences were in the indicated direction. Since they asked for strength of effects, it is possible that a relatively small proportion of people who strongly favored experience dominated the results, with a large group of people who found the two equally satisfying, or even had a trend towards possessions.

For me, it is possessions over experience. I recently humored my darling spouse and took a vacation. We did not drive far, but it was social, lasted a week, and it was expensive. Since I did not have to buy tickets, get on an airplane, show a passport of do a lot of packing, it was as unpainful as a trip can be.

I also recently got two new pairs of eyeglasses. I finally updated a years-old prescription. I need glasses to see anything so I always have a spare. They are only for me, nothing social about them.

The eyeglasses were far cheaper than the vacation and produced far higher satisfaction.

The vacation is over. Whatever value it had is gone.

The eyeglasses are a major boon to my life. I enjoy my vision so much that I tell myself I will never let my prescription get that old again. In reality, since buying glasses costs money, I probably will skip many rounds of prescription revision. But I deeply enjoy my glasses. In fact, I cannot think of any trip I have ever taken that I enjoyed as much, and certainly not as long, as I do my new glasses.

I suspect hidden under the sweeping generalizations there are some people who enjoy experiences a great deal more than do others. Those people derive a lot of pleasure from travelling, eating, drinking, whatever. For them there is no comparison.

There are also people more like me. I will do what travel my job requires. I will do what travel marital comity requires. But the idea of a pleasure trip is a oxymoron. There are just greater and lesser levels of misery.

Since I wait so long before purchasing things I tend to find that the ones I do buy are important to me.

But the purchases I like the most are of VTI and VWITX.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

DrGoogle2017
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by DrGoogle2017 » Sun Nov 26, 2017 4:36 pm

avalpert wrote:
Sun Nov 26, 2017 4:03 pm
DrGoogle2017 wrote:
Sun Nov 26, 2017 2:56 pm
afan wrote:
Sun Nov 26, 2017 2:37 pm
fishandgolf wrote:
Sat Nov 25, 2017 3:18 pm
My wife loves to travel.....I love my wife :D ....therefore, I must travel. :|

Personally, I do not enjoy travel.....I don't mind the vacation part.....the travel is a PITA. Airports :annoyed , rental cars, dragging luggage everywhere :annoyed , wearing the same clothes every other day, finding good restaurants, sleeping in crappy beds, crowds.........

My wife loves to travel......I love my wife :D ....therefore, I must travel :|
After years of misery, we concluded we would both be happier if dear wife travelled alone or with friends and relatives. For me travel is torture. In my life I can think of one trip from which I returned thinking it was worth the time, hassle and cost. I would much rather stay home and read a book

Meeting people in Nice would require going to France again, which is not going to happen. Same for surfing in Hawaii, diving in Grand Cayman, or spending a lot of money to take a trip to X. If I have been there I am not going back. If I have never been there that will also be true the day I die. Unless X is under a two hour drive and I can sleep in my own bed, I am not going. Not if I have a choice

But that does not mean I will spend the money on physical objects instead. That assumes one is forced to spend a certain amount on entertainment and you only get to decide how to waste some fixed sum.

On the topic of spending money on "experience vs things", I find it a false choice. It ignores the third alternative "neither." The things I enjoy are local and either cheap or free. Read a book, take a walk... Learn something or get some exercise.

Instead of buying a car or flying to Europe, I would rather buy more shares of VTI.
Or 4th choice, do both. I’m both a homebody and a traveler. I do own a nice home theater and love to watch the history and natural channels. I wouldn’t never go to the Serengeti in Africa or the Galapagos areas, Richard Attenborough did a much better job filming the wild life there, better to watch on my home theater.
Oh boy is that off. The experience between seeing the wildlife in person is vastly different (and I would say far superior in all ways) to that of watching even the best wildlife filmographers. You might not want to try to capture everything on video and leave that to the pros, but standing face to face with an elephant in the wild, or tracking up to rhinos, or watching a leopard stalk its prey and pounce, or following an octopus as it instantly changes its colors is like nothing you will ever see on a screen (and I too own a nice home theater set up and watch a lot of it).
Maybe off to you, but that’s how I like to travel. Maybe you don’t know anybody who was injured and had to use a wheel chair for life after a trip to Africa, but I do. This is why it’s all about preferences. Or shall I put it this way, don’t tell me how to live my life base on your preferences. I particularly don’t enjoy watching anything stalks it’s prey and pounce. Sound bloody to me. With a video, I can turn it off or not watching it.

afan
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by afan » Sun Nov 26, 2017 4:42 pm

bligh wrote:
Sat Nov 25, 2017 4:10 pm
many of us are wired to constantly seek out new and unfamiliar things.
Yes, but one can do that through books. They are either cheap or free and you don't have to go farther than the library.
bligh wrote:
Sat Nov 25, 2017 4:10 pm
What is your favorite movie? Try watching only that movie, every day for the rest of your life.
Or not watching a movie at all. I go to movies to humor my wife, a couple of times a year. Left to my own devices I probably would not go to another movie ever again. My interest tends to fade after a few minutes. Then it is either take a nap until it is over, or excuse myself to the lobby and check my email. Usually the latter since she tends to poke me when I am trying to sleep.
bligh wrote:
Sat Nov 25, 2017 4:10 pm
What is your favorite food? What is the healthiest food you can think of? Eat that and only that for the rest of your life.
There is no single food that would be healthy to eat as the only source of nutrition. But I eat the same, healthy, mix of protein, carbs, fat, fiber and micronutrients almost every day. It is very cheap, easy to organize and avoids the hassle of figuring out what to eat. My problems come when I go to a restaurant and have to eat something new.
Last edited by afan on Sun Nov 26, 2017 5:07 pm, edited 1 time in total.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

fposte
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by fposte » Sun Nov 26, 2017 4:47 pm

snackdog wrote:
Sun Nov 26, 2017 10:33 am

Similarly, vacations can be vacuous affairs involving tour buses loaded, cattle-style, with the blue-hair and Sansabelt crowd from flyover states, trudging through European museums and lined up at tired buffets, or they can be solo back-packing trots along the Inca Trail with no map, no reservations, no Spanish and no plan.
Though similarly they can be inspired bonding with your age group and viewing some of the great sights of your life or a vacuous jaunt without even basic knowledge of the country in which you're treading. I think you're falling prey to some bias about good and bad experiences fitting narratives rather than considering whether they bring value to the person experiencing them--a call that's for the person to make. (Of course, that gets complicated when our travel choices are laden as they tend to be with our identities, especially in these days of social media, but all the more reason to avoid preloading a good/bad dichotomy into a situation that really doesn't call for it.)

hoops777
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by hoops777 » Sun Nov 26, 2017 4:53 pm

What an interesting and timely thread.Everyone is different and no one needs to be judged for what they enjoy or do not enjoy.It is their life,their money and their happiness.I personally have found the best and most meaningful experiences in life are free.I learned that from my 3 year old grandson.
K.I.S.S........so easy to say so difficult to do.

emoore
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by emoore » Sun Nov 26, 2017 5:09 pm

randomguy wrote:
Sun Nov 26, 2017 3:23 pm
emoore wrote:
Sun Nov 26, 2017 3:09 pm
Yes it is equal. The money spent is the same. Doesn’t matter what it was for. Money spent on experiences isn’t any different than money spent of things. It’s still spending. It would be interesting to see the responses in this forum if you were to take a 50k vacation vs spending 50k on a Tesla. My guess is the vacation will be much better received even if one can afford either one.

No doubt. But it is also sort of a false dichotomy to split things into experiences and assets/goods. Is that Tesla a material good or an experience (i.e. the experience of quietness when driving, rapid accelerations, smiling when you get in the car,...)? What about spending 500 on dinner? Is that an experience of eating or a consumption of materialistic goods?

There is a specific type of experience that has value increasing happiness versus material goods. And a lot of that benefit is only reached after hitting a certain level of material goods. Going from a bus to car increase most peoples happiness a lot. Going to a BMW gives a much smaller gap. But the same thing works for "Experiences". Z
I agree. You explained it much better than I could. Experiences are personal and different for everyone.

fposte
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by fposte » Sun Nov 26, 2017 5:10 pm

avalpert wrote:
Sun Nov 26, 2017 12:29 pm

Frankly, if you got your science directly from the journals you might realize that it is very much not junk science and the literature is quite consistent here.
Sort of, in that people do consistently value experiences, but the value they place on things seems to vary. Here is a Slate overview of both a recent study exploring the things side and the replication problem and cultural bias that leads to something like the prominence of the earlier research. Also, as noted by one of the leading U.S. happiness researchers, it gets complicated by the fact that people can draw the line between "thing" and "experience" in very different places.

And while I understand that on Bogleheads it makes sense to phrase the question as "what do you spend your money on," the overall question isn't so much what you spend your money on but what you spend your life on, and being as thoughtful with that economy as you are with money when choosing for your own emotional portfolio. As a wise man once said, there is more than one road to Dublin.

afan
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by afan » Sun Nov 26, 2017 5:31 pm

hightower wrote:
Sun Nov 26, 2017 12:46 pm
If you think about it, memories are really all that matter in life. When you get together with friends and family, most of what you share together is memories of your past, fun times, experiences, etc. ... Instead you sit and tell stories, laugh together, etc. A fun vacation or other experience with friends or family will result in years of happy things to talk about remembering the times you had on that trip or doing whatever.
Hardly. I can think of plenty of things that are so much more important than memories it seems silly to compare them:

wholesome food
clean water
a warm dry place to sleep
physical safety
health care when you need it

All come to mind as incomparably more important. By not wasting money on expensive "experiences" or "things" one reduces the chance of running out of assets and having to do without these truly important things.

hightower wrote:
Sun Nov 26, 2017 12:46 pm
When you're laying on your death bed and thinking about your life, you won't really care much about all the stuff you have still sitting at home, but you will absolutely cherish all the good times you had with loved ones.
Well, I have not gotten that far yet, so I don't know.

Right now I am very happy that I declined the opportunity to take a business trip to Paris. Boy am I glad I don't have to go. It is amazing how happy it makes me to know that I do not have to buy plane tickets, make hotel reservations, pull out my passport, pack a bag, endure a trans Atlantic flight, go through customs, wrangle transportation from the airport to the hotel, negotiate the trip between the hotel and meeting site, find food in a country where I don't speak the language, then do it all over again when, mercifully, I get to go home. NOT having those experiences makes me happy. And it is free.

On the other hand, on my death bed I think I will care a lot about my estate plan, asset allocation and the total amount of money I have on the day of my death. The less I spend on experiences and things the more will be left.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

avalpert
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Re: The fallacy of spending money on "experiences" vs hard assets

Post by avalpert » Sun Nov 26, 2017 6:48 pm

afan wrote:
Sun Nov 26, 2017 4:31 pm
avalpert wrote:
Sun Nov 26, 2017 4:03 pm
Oh boy is that off. The experience between seeing the wildlife in person is vastly different (and I would say far superior in all ways) to that of watching even the best wildlife filmographers. You might not want to try to capture everything on video and leave that to the pros, but standing face to face with an elephant in the wild, or tracking up to rhinos, or watching a leopard stalk its prey and pounce, or following an octopus as it instantly changes its colors is like nothing you will ever see on a screen (and I too own a nice home theater set up and watch a lot of it).
I am sure it is different. But I would vastly prefer my interactions with elephants, rhinos and leopards to be seeing photographs, while safely very far away. Out of earshot, far beyond smelling distance, on another continent and in the comfort of my own home. If I were to find myself, somehow, in Africa, there is no way I would go on safari. I would stay at the hotel until I could get a flight home. But since I would never be there in the first place unless I had been kidnapped, I would be unlikely to have a choice of how to escape. If I were lucky, maybe I could jump out a window.
Whatever suits you - personally, I find this perspective both hollow and sad (and while I understand our tendency to fear the unknown, I'm not a big fan of irrational fears wherever they show up).
But the purchases I like the most are of VTI and VWITX.
And this I find saddest of all. When people's greatest pleasure comes only from making money (even if through efficient investments), to me (and yes I realize this is personal preference) that is a wasteful and pointless life.

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