Value vs Cost

On-TargetA recurring idea that keeps on coming up in all of my posts is the idea of “value.” The very core concept of minimalism is to only retain only those things that add “value” to our lives. It was brought to my attention recently that some people may not know the difference between “value” and “cost”.

 

Something we “value”, is something we hold in high esteem with respect to usefulness, or importance, with regard to our own personal moral standing and passions.

Example: I value life, my daughter, and my bicycle. I value life because I am a servant of God (moral standing). I value my daughter because I am passionate about her. I value my bicycle because I am passionate about bicycling.

Those first two should be no-brainers for anyone to understand. The third one however (bicycle?), seems out-of-place here. While obviously I do not value my bicycle as much as life or my daughter, it is a possession of mine that I value very much. I mentioned it here to point out that “value” is very subjective, as most would not share my passion for bicycling. Value can not be quantified monetarily. And for those things we can put a “dollar value” on, we would usually do so just to use the proceeds to get a better version of that thing; such would be the case with my bicycle. So in essence we are placing a dollar value on it only as a means to replace it with something better toward serving the same purpose.

 

“Cost” is the monetary price of something.  Whether we are buying or selling it, cost is the agreed upon exchange rate. That’s it. That is the only real definition of cost. Often we use the word “value” instead of “cost” to represent the monetary cost of an item in the open market. Example: “This original Picasso painting is valued at $5,000.” This use of the word “value” is not defined the same as the “value” I mentioned above. This use of the word is just a fancy word for “cost.” A pretentious use of the word “value” to make it seem personal, un-materialistic, even subjective.

That Picasso may be worth $5,000, but I don’t value it any more than one of my four year old daughters “masterpieces” up on the fridge. But I’m not passionate about art. On the other hand, I am sure there is an art lover out there that would place a personal value on it well over $5,000 (if they had to put a number on it). True-value is subjective, and therefore far more important than cost-value because it’s part of what makes us individuals.

 

Too often do I see people treat cost-value as if it were true-value.

 

Example: I once knew a person (let’s call him Johnny) who did collect valuable pieces of art (paintings mostly). He claimed to be an art enthusiast. When I once visited his home, he took me to the basement where he kept all his pieces (He didn’t put them up on the walls of his home, mind you). All the pieces were wrapped and sealed in plastic so I couldn’t see them perfectly clearly. But he thumbed through them one by one giving me their names, and of course boasting about their “values”.

It is clear to see that Johnny is not an art enthusiast at all. The only true-value in art, is in the way it looks. How it pleases the eye. He can’t possibly be getting any true-value out of the pieces with them all wrapped up and stashed away in the basement. A true connoisseur would have the pieces up on the walls displayed for everyone to see. A connoisseur would frequently gaze upon them in contentment and contemplation. The truth is that Johnny is just an investor. An investor that just so happens use art as his medium for profit. Johnny is only fooling himself into thinking there is any passion behind his collection. This art collecting is an empty activity.

Generally speaking, any collection hobby where one puts their collection away to be untouched and unused for extended periods of time is not a passion at all. There is no true-value being added to ones life if the collection is unused.

With all this being said, I think it is clear now that understanding “value” (or true-value) is the real path to happiness. Having a good understanding of “cost” (or cost-value), may lead to a more financially sound life, but will not gain one happiness.

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