How much money would you need to not care about paying full retail price?

stevejobs · Jun 2, 2008

If time = money then for those who are time poor but money rich it may make sense to just pay retail, instead of scouring ebay, bluefly, or even SF to get discounted prices. Of course if the store is already putting the items on sale then take it, but sometimes it is not worth the effort to take up your time to wait until sales happen.

IMHO, I would need to consistently earn at least $500K to value my time over price. $500K divided by 8760 hours in a year equals $57.08 per hour including sleep time. Therefore it wouldn't be worth it to scour for $20 to $30 off coupons or wait four months to get out of season clothing. I'd be wealthy enough to not mind missing out on the occasional bargain. However, that doesn't necessarily apply to much higher priced goods like cars, jewerly or travel. Half-a-millionaire is not yet wealthy enough to ignore those costs.

bmulford · Jun 2, 2008

Originally Posted by stevejobs

If time = money then for those who are time poor but money rich it may make sense to just pay retail, instead of scouring ebay, bluefly, or even SF to get discounted prices. Of course if the store is already putting the items on sale then take it, but sometimes it is not worth the effort to take up your time to wait until sales happen.

IMHO, I would need to consistently earn at least $500K to value my time over price. $500K divided by 8760 hours in a year equals $57.08 per hour including sleep time. Therefore it wouldn't be worth it to scour for $20 to $30 off coupons or wait four months to get out of season clothing. I'd be wealthy enough to not mind missing out on the occasional bargain. However, that doesn't necessarily apply to much higher priced goods like cars, jewerly or travel. Half-a-millionaire is not yet wealthy enough to ignore those costs.

It would always matter to me as the cost of shopping would be factored in as well. I'd wait for the point where the revenue/cost ratio would be offset by paying someone from Belvest, Borrelli, or Attolini to visit me at my convienence, and I'd place a bespoke order for enough to cover 30 days of casual and dress wear without repeat.

In otherwords - I'm not even 10% of where I'd need to be for that to make sense. In the meantime, I rather enjoy bargain hunting as a distraction from 'important' matters.

constant struggle · Jun 2, 2008

if i had no debt (mortgage)
anything over 300K/year

lee_44106 · Jun 2, 2008

You guys must mean AFTER TAX income.

You guys forget that the so called "rich" are the despised kind of society, where any problems of short fall in revenue is automatically layed at their feet. "They are rich, just raise the taxes"

AT the current tax bracket, a $500K income gets you into the 40% bracket. You end up with $300K only.

alliswell · Jun 2, 2008

Your psychology determines your willingness to pay for a particular item; your salary determines your budget for items. You're either the type of person who thinks Kiton is worth it at list, or you're the type of person who will think 'If I wait until next month, it'll go on sale'.

If you're here, you're the second type; and if you're here long, you know a sales associate who'll hold it for you. If you do know an SA and you've any quantitative skills, you know the delta on his commission today vs. his commission on the sales price.

Alternately - a quick way to calculate this is to calculate the ratio of the cheapest shoes you would wear (say AE on 50% discount = $150) to the price of bespoke Lobbs (say $4000). In this case, that's 27x. So multiply your after-tax salary by that ratio to see how much money you'd have to make to have Lobbs be cheap to you.

Coho · Jun 2, 2008

The only things I'd pay full retail for:

1. Food
2. Toilet papers
3. Education
4. Underwear
5. Rent

For me, I'd have to be self-employed with at least a net worth of 20M before I feel comfortable paying full retail for all items over $500. Alas, I'm still poor, and living on rent in one of the most expensive neighborhoods in the world doesn't help either.

gvibes · Jun 2, 2008

Originally Posted by lee_44106

AT the current tax bracket, a $500K income gets you into the 40% bracket. You end up with $300K only.
There isn't a 40% bracket (at least in the US).

As for the OP's question, I don't think I'd ever not care about paying full retail.

vitaminc · Jun 2, 2008

Originally Posted by lee_44106

You guys must mean AFTER TAX income.

You guys forget that the so called "rich" are the despised kind of society, where any problems of short fall in revenue is automatically layed at their feet. "They are rich, just raise the taxes"

AT the current tax bracket, a $500K income gets you into the 40% bracket. You end up with $300K only.

You forgot the state tax, which is about 9% in California.

Originally Posted by letmebefell

Your psychology determines your willingness to pay for a particular item; your salary determines your budget for items. You're either the type of person who thinks Kiton is worth it at list, or you're the type of person who will think 'If I wait until next month, it'll go on sale'.

If you're here, you're the second type; and if you're here long, you know a sales associate who'll hold it for you. If you do know an SA and you've any quantitative skills, you know the delta on his commission today vs. his commission on the sales price.

Alternately - a quick way to calculate this is to calculate the ratio of the cheapest shoes you would wear (say AE on 50% discount = $150) to the price of bespoke Lobbs (say $4000). In this case, that's 27x. So multiply your after-tax salary by that ratio to see how much money you'd have to make to have Lobbs be cheap to you.

Hmmm, while I love eating Big Mac or Popeye's, I could also afford to eat at the French Laundry. But then the multiple would quickly grow out of whack...

Coho · Jun 2, 2008

Where I live, it's 8.5% I just chatted with an ebay seller who is charging like 2.5% sales tax to customers in his state. I don't remember his location but I'm shocked that such low rate exists for some states.

Originally Posted by vitaminc

You forgot the state tax, which is about 9% in California.

cimabue · Jun 2, 2008

Most affluent people I know will pay retail for a short while, but eventually expect special treatment, ie, better prices. Like anyone, they'd like to know they're getting a good deal.

bmulford · Jun 2, 2008

Originally Posted by Coho

Where I live, it's 8.5%

I just chatted with an ebay seller who is charging like 2.5% sales tax to customers in his state. I don't remember his location but I'm shocked that such low rate exists for some states.

2.5% = a place where left outside for > 12 hours; you'll die.

babygreenspots · Jun 2, 2008

Well, I think a big part of the question is whether or not you enjoy the process of looking. I know people who don't make that much that still pay full retail just because they don't want to be bothered. If they happen to be near the store, they buy the shoes, simply because they don't know when they will be back.

billiebob · Jun 2, 2008

I'm not sure thrift is an income-related pursuit. I know folks who make millions but only shop at the brooks outlet because they think it's the same stuff as the retail store. Granted they buy the year's business wardrobe on that one shopping day but still.

I am definitely an income sensitive sales shopper. Finding and attending the deep discount days (sample sales, annual sales, weekday sales) is a pain **********. It would take at least triple my salary, however, to make me pay full retail, given that I find things I love at 70% off regularly.

tlmusic · Jun 2, 2008

It seems to me that people who become wealthy (and stay wealthy) are always interested in getting the best price. It makes no difference whether it's a shopping mall, a 120' yacht or a pair of sneakers.

I have observed that rich people like to pay full retail for top quality service. That could be from a broker, a tutor, a doctor or a bespoke tailor. Wealthy people often feel that there is no reason to chisel away at your best and closest advisors, especially when they can help a person make even more money. I like to adopt this line of thinking.

yachtie · Jun 2, 2008

How much money one has has no correlation to the price /value ratio of goods.

In Plain English, I'd still get peeved paying some outrageous retail markup no matter how much I made.

I generally shop paying more attention to the price/value ratio rather than the actual price.

How much money would you need to not care about paying full retail price?

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