Expensive

Expensive is a term used to convey one’s subjective value of a thing, not a statement of fact. And it’s a way for others to implicitly pass judgement on how you choose to spend your money.

You need a framework for thinking about what’s important and worth it to you. Otherwise you’ll be living according to someone else’s standards of value, which is exactly what leads to keeping up with the joneses. To avoid that, you need to be making effective capital allocation decisions at the personal level. In my opinion, those decisions should be focused on value, not cost. See Iron Law of Economic Survival.

“Your rent is so expensive”. It’s only expensive if the value it creates its less than or equal to the cost. That’s it.

Choosing to live in an ‘expensive’ market, produces second order benefits. It makes you eligible for a larger pool of jobs, that command higher salaries. It puts you in close proximity to other motivated, talented people. Among other lifestyle benefits.

Value is the thing that matters. Costco isn’t successful purely because they offer the cheapest products. They offer the best products at the cheapest price. A warehouse full of purely cheap goods would not create the most value for the customer. They also offer less products than other stores their size.

The takeaway for me is: less things, but the best of each. (A lot of hidden life lessons in Costco’s business model).

Goes without saying that on an absolute basis, some things cost a lot more than others. But that’s not what people are referring to when they say X is expensive.