A few weeks ago I played lagged-out, totally-delayed-to-where-I-couldn’t-participate webinar host to Ramit Sethi (of I Will Teach You To Be Rich) while he taught YNABers interested in earning more money on the side about…earning more on the side.
Participation was impossible since I was about 20 seconds behind the live performance. That gave me the opportunity to scan the comments as they came rolling in throughout the presentation. Wow, did the comments roll in.
I should have written this post the next day, because my memory isn’t as fresh now, but I’ll give it a shot anyway.
$9 on Chips — Even in New York That’s “Pricey”
Ramit opened by saying that he purchased a bag of chips, didn’t check the price, and was floored to see they cost nine dollars. In a hurry, he purchased them anyway. Long story short — he loved the chips. He now purchases them regularly. He said they could cost $20 — he’d still buy them.
The other example he gave — a $300 shirt.
The comments began rolling from everyone, just dripping with incredulity. I watched, mildly amused, and wondering just how good those chips really must be. And what color the $300 shirt is.
Ramit closed by repeating something that he repeats a lot. And it’s good he repeats it, because it’s an important lesson:
Spend lavishly on the things you love, and cut costs mercilessly on the things you don’t.
And I find myself wanting to write this as the next sentence:
Here are a few of my lavish spending sins...
Because I want to confess. And I want to use the word ‘confess.’ But that right there is wrong. By using the words ‘sin’ and ‘confess’, I’m implying that lavish spending is wrong. And then we all get to decide what’s lavish.
Congress called. They want you as part of their Lavish Spending committee…
…which is my way of saying that it’s futile. And a waste of time. And probably a bit lame for all of us to judge everyone for how(ever) they use their money.
As long as they’re thoughtful about it. Conscious about it.
Lavish on Purpose
Ramit’s use of the word ‘lavish’ is a bit to blame here because lavish–just the word itself–signifies that it’s a bit over-the-top. It’s kind of saying that you’ve perhaps gone overboard a smidge or two. And I don’t think Ramit’s use of the word ‘lavish’ is a coincidence. I think he’s using that word to drive home the point that YES it can be lavish and there doesn’t need to be any guilt associated with your purchase because you’re proactively planning and choosing what you want to do with your money.
You’re budgeting my friend!
The fact that some of you spend lavish amounts of money on fishing tackle just blows my mind. Really? For fishing?
And you ladies out there that own 437 different stamps used for scrapbooking. Really? A little lavish don’t you think?
You just don’t need to feel guilty about those 437 different stamps. Or those 90 lures that all look the exact same (to me…). You planned for it. You paid cash for it. You get to be lavish about it. Whatever that means.
Merciless Cost Cutting and Snooty Restaurant Choices
If you noticed recently that you’re only watching network television anyway…cancel the cable. If you noticed that you aren’t going to the gym…START GOING :) If you’re not using all of your minutes, downgrade your plan. Cut costs mercilessly.
Look at the value you’re getting. Look at what you’re paying. Make sure those two things make sense. Both sides of that equation matter!
Here’s something snooty to chew on. I will not eat at the following restaurants: Olive Garden, Chili’s, Applebees, TGIFriday’s, Outback, Texas Roadhouse, McGrath’s, Joe’s Crabshack… the list goes on. Julie can cook those places into the ground. Every time I went, I would walk out feeling slightly sick and completely unsatisfied. I’d rather begin a fast than eat at those places. You could call me and tell me that you want to take me to lunch (great!) and it’s all on you (even better!) and you want to go to Chili’s (nOoOoOo!!!) and I’ll tell you just to come over to my house and we’ll split the difference ;)
Because I’d rather pass four times on Olive Garden to go once to Bambara’s.
It’s just about conscious decisions. No guilt. Just planning. Thinking. And no more knee-jerk reactions.
So those of you that were a bit incredulous at the $9 chips… you’re doing that too! You’ve got your lavish thing. Enjoy it. You planned for it.
[Enter the business connection postscript here, so read on if you want to get insights into the pricing aspect and the Big Tie-In that I think was missed.]
Later on in the webinar Ramit was talking about targeting your niche. Really targeting it. Where you decide on a very specific demographic/end client case and you target that person. All of your language should be that target client’s language. If they say “allocate” instead of “budget”, you should start saying “allocate.” If they’re always talking about how they want more “time”, you should stop selling them on the flash-bang feature that does this-or-that and talk about every feature through the lens of time savings.
I’m remembering the example Ramit gave about having a newborn baby where you’re picking between two photographers. One takes pictures of everything (and does a great job). But this other photographer, his whole site has great pictures of newborns. Every single line of copy on his site talks about photographing newborns — about the different nuances taken into account…all of the details he mentions (that you didn’t know you cared about until now)…
The specialized photographer makes the sale nine out of ten times. And you know that’s true!
So…with the photographer pricing for people that know they really, really want his service. Or for the bag of chips that is remarkably delicious… doesn’t price become basically moot?
And that’s where you can price to infinity and beyond.