Sunday, February 28, 2016

Diminishing Returns

Articles about Disney's hiked prices hit the media yesterday with folks declaring Disney would soon be out of reach of the middle class customer. And... so what? The truth is people spend money on things they value and they deem everything else 'too expensive'.

I once had a conversation with a former supervisor about this very subject. The hunk and I had invested a considerable amount of our income on a new computer set-up. In my excitement, I was describing the components with loving detail. And then she said rather doubtfully, "But isn't that a lot of money when you have so many other things you need to buy?"

Well, yes. It was a lot of money. But everything in life is about perspective. So I asked her what she thought her monthly output on the family skiing hobby would amount to. Condo at the ski resort. A specially outfitted van for travel. Ski paraphernalia and equipment. Ski clothing. After a moment she just smiled. My family didn't go for ski holidays every month. We had a computer for entertainment.

The expense for something is directly related to how interested you are in acquiring it. If you don't like movies, then paying to see one is 'too expensive'. If you don't read, then books are out of your budget. There is a price on everything in life. Everything. What you are willing to spend in time, money, effort is proportional to the return you receive. The reward. No return or reward = prohibitive expense.

For the vast majority of people a visit to one of the Disney parks has been and will always be a fantasy. So are trips to Europe/Africa/Australia/Asia...heck, even Hawaii. For a lot of people just having enough money to pay for groceries this week is a fantasy. Disney price hikes fall firmly in the category of a First World problem.

Reality is knocking on the door. How much money we have and what we spend it on will always be determined by the law of diminishing returns.

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