Dave Sather's Money Matters: Knowing cost will get you best deals

Aug. 6, 2013 at 3:06 a.m.

By Dave Sather

Occasionally, I come home to a pile of shopping bags stacked like cordwood. From behind the mountainous purchases, my beloved bride asks me if I want to see what "doohickey, thingamajig or whatchamacallit" she acquired.

Generally, it is dryly met with the same five words - "How much did it cost?"

Carol immediately rolls her eyes, thinking I am upset with her purchases. Sometimes, that is the case (there is only so much stuff a person can cram in one house). However, more often I am just curious as to what things cost.

Many people think it is nosy when I ask how much something costs. However, knowing what things cost helps to develop a mental framework of pricing and corresponding value. If you don't know what things cost, you'll never know whether you are getting a good deal or not.

This is especially helpful in valuing investments, as it allows a smart investor to develop a matrix of what things should cost versus what they are selling for now.

Understanding this, I am often frustrated when I ask Carol how much things cost, which is promptly met with "I don't know. ... It was cute."

Despite struggles with marriage and money, we recently celebrated our 20th wedding anniversary with a quick trip to New York City.

The day had been great. Lunch was at the famed Carnegie Deli, followed by front row tickets to the David Letterman show. Carol got to visit with Letterman during the pre-show, in which she shared that it was our anniversary. As Carol shared her antics, Letterman asked if I was Carol's spouse. After listening to her for a bit, Letterman offered up some marital advice to me - "Run while you still can." Our evening was topped off with The B-52s and The Go-Go's in concert.

It had been a long day with lots of walking. Furthermore, my bride chose fashion over function in her choice of shoes. Her feet were killing her.

As we stepped out of the concert, the line for cabs was 50 deep. We started walking the 18 blocks to our hotel. I reasoned that it was a cool New York evening with a nice breeze. Carol, on the other hand, limped as if she had run a full marathon barefoot.

We made it one block. As Carol hobbled, we came upon a stand of bicycle rickshaws. I felt sorry for my bride - she had been great to travel with, and I didn't want our 20th anniversary to end with an emergency room visit.

I hailed one of the rickshaws - it never entered my mind as to why, just one block from the concert, there were six rickshaw cabbies sitting and waiting. I didn't give it another thought.

We hopped in the three-wheeled bike and were chauffeured down 7th Avenue, feeling every bump, pothole and imperfection in the road. Carol smiled, happy to be off her feet.

A few minutes later, the cabbie stopped in front of our hotel. I figured we'd pay a bit of a premium for the late-night ride - maybe it would cost $25.

In broken English, the cabbie started doing mental gymnastics as he computed the tally - let's see, 17 blocks at $2 per block. That is $34.

I grimaced but remembered the smile on Carol's face as she was thankful we were not walking.

Then the cabbie added that since it was after 10 p.m. there was an additional surcharge of $1 per block. Ugh. We were now up to $51. My corn beef on rye from the Carnegie Deli was not sitting so well any longer.

And then the cabbie added, "Oh, that is per person. It will be $102 for both of you."

I was in disbelief and challenged the bike-pedaling loan shark. He politely pointed to the stated rates, as mandated by the city of New York, plainly posted on the side of his cab.

I had no choice but to scrounge for every last penny to pay the man.

As I dug deeper and deeper into my pockets, my bride smirked and sarcastically said, "I guess you should have asked how much it cost."


Dave Sather is a Victoria certified financial planner and owner of Sather Financial Group. His column, Money Matters, publishes every other Wednesday.



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