Do you make completely rational, logical decisions when you purchase items? Do you compare prices and features and make the best decision based on the facts? Are these decisions free of emotion?
I don’t think so. They are entirely emotional and I’ll explain why.
A letter writer to Will Femia’s Clicked blog wrote this in response to my 10 Things I Wish I had Never Believed:
Who buys cars or houses because of the way they make one feel? Well, not me. Especially with the car. For both purchases, I made lists of factors for inclusion and exclusion, and then found the best match for the list. None of the factors was “makes me feel good.”
I used to think the same way as the letter writer. I used to believe I was a very rational decision maker and it led me to make poor decisions. To understand how and why you make the decisions you make, you need to recognize how emotional your decisions really are. Let me give you a couple of personal examples…
In 2001, I wanted a new car. I had $12,500 to spend on the car and I didn’t want to borrow any money. I wanted the best car I could get for the price. I desired these things in a car.
- Less than $12,500
- Low Miles – Under 30K
- Four doors
- ABS brakes
- Clean service history
- Clean accident history
- Neutral color like silver or gray
I bought a Silver 4-door 2000 Oldsmobile Intrigue with 22,000 miles, ABS brakes, a radio, and a clean history for $12,100.
Was that a rational logical decision?
No it wasn’t. It was purely emotional.
The first decision to challenge is…
Why do I need a car? Driving is a privilege and luxury. Billions of people live without cars. People without cars don’t shrivel up and die. I could live without a car, but I feel better owning one. So why do I want one? Because a car gives me more freedom and that increases my quality of life. And a better quality of life leads to a happier state of consciousness – maybe.
But let’s say I concede that I am a special case and a car is an absolute life necessity. Why do I want these specific features?
Low Miles – I don’t want to worry about the car breaking. I don’t want to spend money on repairs.
Four Door – I want it to be easy to get kids in and out of the back seat.
ABS Brakes – I want to feel safe on the ice and snow.
Radio – I like to listen to music in the car.
Clean history – I don’t want it to break down frequently. I’d feel like a fool buying a totaled car that was refurbished.
Neutral Color – I don’t feel good in flashy colors.
Every one of my required features is emotional. Couldn’t I have gotten by with a hot pink 1990 Ford Escort with 200,000 miles? Sure, why not? I see people driving stuff like that all the time.
Now let’s look at the house I purchased in 2004.
This is what I wanted:
- 3000+ Square Ft.
- Less than 10 years old
- Cul-de-sac location
- Good school district
- Nice neighbors
- Neighbors with kids
- Large open room for an internet based retail business
- Access to high speed internet
- Less than 30 minute commute to work
- Low crime area
- Less than 400K
The first question…
Why do I want a new house?
I lived in a 920 Sq ft. house for ten years. It met most of my requirements. I could have lived in my old house for the rest of my life, without a problem. In fact, I could live my life in a much smaller space without a problem. But I wouldn’t have felt as good about it.
We wanted the house because we wanted more room. We didn’t like to feel crowded. I wanted to buy more toys. My wife wanted to expand her business and buy new furnishings that wouldn’t fit in the old house.
My point is we could have stayed in the old house or even moved to an apartment in the slums and saved a lot of money, but we wouldn’t have felt as good.
3000+ Square Ft. – We didn’t want to feel crowded.
Less than 10 years old – We didn’t want to be bothered with time consuming and costly renovations.
Cul-de-sac location – Wanted to feel safe when the kids played outside.
Good school district – Wanted the kids to get a good education.
Nice neighbors – We wanted to enjoy our neighborhood.
Neighbors with kids – We wanted the kids to enjoy their neighborhood.
Large open room for an internet based retail business – We wanted to expand our home based business.
Access to high-speed internet – OK, I would shrivel up and die without internet access. I don’t know how I lived my first 25 years without it.
Less than 30 minute commute to work – I wanted to spend more time with my family instead of on the road.
Low crime area – We wanted to feel safe.
Less than 400K – I didn’t want to worry about debt. My loan officer said I could have borrowed 700K. But I didn’t want the stress of a large mortgage. I felt better putting my money other places.
You can see that every one of my housing requirements is emotional. I think most people would say that these are logical desires. Desires most people have. But they still meet emotional needs.
Many people brag about their bargain hunting ability as a testimony to how rational and logical they are. I have never met a man that was taken to the cleaners by a used car salesman. I always hear the story about how he took the used car lot to the cleaners. Listen to a group of men discuss their big-ticket purchases and you will hear story after story about how they paid less than all the other poor suckers. Your desire to believe you got the best price is purely emotional. It makes you feel smart. With men it’s competitive. The guy that gets the best deal is smarter, tougher, and more masculine. With women it’s a little different. They don’t brag about their negotiating prowess. Don’t kid yourself that your focus on price isn’t emotional. It is. Good marketers and sales people know it. Many people shop at Wal-Mart because they’d feel stupid paying a dollar more for diapers even though they feel like vomiting while they shop there. They value feeling smart more than they value feeling healthy.
An economist once told me that all human decisions are irrational once we have met the basic needs for food, shelter and clothing. Once you have those base needs met, everything else is an emotionally driven desire for status, comfort, and entertainment. After all, we could all wear gray sweat suits, eat beans and powdered milk three times a day, and live in 300 sq ft apartments, but we wouldn’t feel very good about it – would we?
Read the 10 part series on the 10 things I wish I had never believed:
#1 Why People Believe Money is the Root of All Evil
#2 Why Getting a Good Job isn’t the Best Way to Earn Money
#3 The Secret Great Leaders Know About Emotions
#4 Success is 99% Failure
#5 10 Tips to Secure a Management Position without a College Degree
#6 Always Question Your Doctor – Three Stories Why
#7 How the Public School System Crushes Souls
#9 Give Me 3 Minutes and I’ll Make you a Better Decision Maker