Ramit Sethi argues that status heavily influences purchasing decisions and recommends running the numbers for major purchases (house, car). He gives a numerical example—buying a house may carry an extra $600,000 in opportunity and phantom costs—and urges listeners to interrogate whether choices are driven by others or by personal values.
We buy things based on status. To deny it is absurd. But I do think that for the big purchases in your life, like a house, a car, you've got to run the numbers. And if you decide, hey, you know what? I want to buy a house, even though it's going to cost me an extra $600,000 in opportunity costs and phantom costs, but I'm going to do it because I like it or it makes me feel good, I say God bless. But if you simply make decisions based on what other people around you do, then you will discover like you did. I thought I was going to feel a certain way, and I don't really feel that way. And that, for me, is an opportunity for you to interrogate your own beliefs.
