Rule 15: Know The Difference Between Price And Value

Kehinde Kamson, Successful Enterpreneur and owner of Sweet Sensation Eatery
I once asked my
delightful father-in-law to explain that thing about wine to me. You know, can
a bottle those costs £100 in a top
restaurant really be twenty times as good as a bottle that you can get
for a fiver at the local shop?

His answer was
interesting. He said that you aren’t paying for the wine alone. What you are
paying for is the ambience, the service, the location (we’re talking Eko
Le Meridian
here), the wine waiter’s expertise, the good company, the
fine tablecloths, the privacy and discretion, the style and class, the
tradition, the food and the trust, the humidity and storage, the tone and the
surroundings, the fellow dining guests and the great conversation.
The wine is
almost an irrelevance and that’s the point. We think we know the price of
something. But the value can spread out far beyond all of that.


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“What you are paying for is the ambience, the
service, the location (we’re talking Eko
Le Meridian
here), the wine waiter’s expertise, the good company, the fine
tablecloths, the privacy and discretion, the style and class, the tradition,
the food and the trust, the humidity and storage, the tone and the
surroundings, the fellow dining guests and the great conversation”.
I have an old
Mercedes car (I like Mercs but am far too mean to buy a new one and lose all
that depreciation). I didn’t pay much for it. You never do, as people are
scared of them in case they go wrong, and fair enough they do cost a fortune to
put right but you need to remember that because they are better made,
they rarely do go wrong. I was visited by a friend who was driving a brand new
car he’d just bought; a modern Eurobox, a small hatchback thing that looked
like a mini spaceship. He looked at my old, battered, mud-streaked Merc and
exclaimed, ‘Blimey, you must be doing well!’ I tried to explain that wasn’t the
case and that he’d probably paid at least five times for his what I’d paid for
mine but he wouldn’t have it. He saw the Merc and had decided its value was a
lot more than the price – i.e. what was actually paid for it. I learnt that day
about price not necessarily equating to perceived value.
Remember too
that something is only worth what others are willing to pay for it. A catalogue
may say the value of a painting is £500
but that’s only true if somebody is willing to pay that amount for it; an
important lesson to learn. The price of something can be far less than its
actual value, either to you or to
Somebody else, or
a lot more.
If you are going
to be wealthy – and I sincerely hope you are, if you put into play the Rules in
this book and work diligently at it – then it’s worth studying the difference
between price and value.
From The Book; The Rules of Wealth by
Richard Templar
(Read Rule 16
of Rule of Wealth tomorrow on Asabeafrika)

Read-to-Wealth Series 
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