Kansas Basketball and the Value of Money
I played basketball some growing up and remain a big college basketball fan so when Lori (our Director of Operations) asked me during my onboarding process what some things I might do were now that I had moved to the midwest, it seemed logical to me that a stop at historic Allen Fieldhouse (the home of Kansas basketball) should be on the list. New to Missouri, I didn’t yet appreciate how deep the rivalry ran, so I was surprised when Lori responded, “Really? Why would anyone ever want to go there?”
Fast forward and thanks to Mark’s Kansas connections, I was finally able to make it happen this year and it was as advertised. The atmosphere was great and the history compelling.
The next day Emily’s husband Chris, a Mizzou alum and diehard, called me and said, “So, how was Allen?”
“It was pretty great,” I said.
“I was afraid you were going to say that,” he grumbled.
And that right there is the difference between objective and subjective value.
Objective value is what an item is actually worth. A dollar is worth a dollar, for example, because you can pay a dollar’s worth of taxes with it. Subjective value, on the other hand, is what you perceive an item to be worth, which is an amount informed by all of your life’s experiences. If, for example, you had no taste buds, then the going price of caviar would make no sense!
Lori’s and Chris’ subjective valuations of a visit to Allen Fieldhouse were low because, you know, Missouri (even if Chris was aware of his bias). Mine was higher because, you know, basketball. Others will be higher or lower than any of ours depending on their circumstances but probably not exactly equal to anyone else’s.
And that’s fine. That’s why we have money.
Money is important because it’s the thing that allows us all to convert subjective valuations into objective ones and therefore transact more efficiently. If I told you I’d trade my house for yours, you’d have a lot to figure out before you said yes or no. But if I made you an offer in dollar terms, you’d probably be able to say yes or no within the hour.
And yet even the value of money can be made subjective with the introduction of other variables around it such as time. In fact, I’d argue that knowing when you will get paid is in some cases far more important than knowing how much you will get paid.
The point is if you’re doing a transaction and it makes sense for you to do it, do it. Or if it doesn’t, don’t. Just don’t spend time worrying about the deal your counterparty thinks he or she is getting or what the world might think. Because no one will evaluate the outcome the same way you will.
And not only is that ok, it’s kind of the point.
P.S. Enjoy March Madness whether you’re Rock, Chalk, M-I-Z!, or something in between.
– By Tim Hanson