When my 11-year-old daughter asked me if we could attend the Super Bowl in San Francisco this year, I knew that there was a finance story here.
How much are Super Bowl tickets? They’re $5,000 minimum for the “I can’t really see” seats. So I asked my daughter, what else could we do with that money?
She wondered how many Broadway shows she could see for $5,000.
If each Broadway show costs $200 and that gets you an “I can see” seat, she calculated that you could attend 25 shows. That changed her mind about the Super Bowl in the time a quarterback has to decide where to throw a pass before getting tackled.
One lesson here is to always look at the opportunity cost of spending any sum of money, whether it’s a Super Bowl ticket, a second home, a new kitchen or a trip to Europe. What else could you do with that money? For my daughter (and for me), this was an eye-opening calculation: 25 Broadway shows.
Something doesn’t seem right here; how could Super Bowl tickets be worth that much?
This is about how much value anything might have for you. The trick is to find things where your perceived value of them is much greater than the public price. This is where you earn what I call a spending profit/gain.
What’s the largest spending gain you’ve ever experienced? A recent biggie for me was renting a $6,000 racing bicycle for $75 for the day. Another was an investment I made in solar panels in Kenya—it provided clean electricity for 200,000 Kenyans without the lung and air pollution of kerosene.
