We each have very different net worth, earning income level and cash flow. Some of my friends earns $20,000 per month, another earns $2,000. The common process that they should have is to be able to make fundamentally sound decisions. These decisions would be whether they need the thing they want to buy, whether they place a high priority of it in their life goal, whether buying it will create drastic instability in the family and their life and perhaps more.
I am not going to judge your purchase (well i try not to).
To both the ladies earning $2,000 and $20,000, they may want it since they first saw something like that at 14 years old. If the $2,000 per month lady buys it, she is over-reaching financially. Not so for the person earning $20,000.
The lady earning $20,000 probably worked hard at her job for that compensation. Are you going to deny her the stuff that she has been yearning since 14 years old just because you think its ridiculous by society standards to pay $6000 for a patched up leather job?
Paul Allen, co-founder of Microsoft, in 2003 bought the Octopus at US$200 mil. At that time it is the largest yacht under construction. Is it a ridiculous purchase? He is worth 17 billion. That is like 1.1% of his net worth.
To a person living in Cambodia, even spending SG$30 on a meal is ridiculous. I believe if you tell them what the average Singaporeans are spending, they would be in agreement that our life is that of the rich.
You can say that Paul Allen should use the money for philanthropy. He has given 1.8 billion in his own way. I doubt he is that bad of a person. Now are you going to deny him a $200 mil yacht, just because almost 99% of the people in the world cannot afford it, and by frugal personal finance rules, this is a ridiculous purchase.
To rare folks like me, a $6000 bag is ridiculous, a $1000 holiday is extravagant, a $30 meal is stupid. But that is my standard. I don’t believe there is a standard for such measure. The important part is the individual evaluation process, based on your individual circumstances. Make sure your decision making criteria are sound.
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