Million Dollar Potato
The social aspect of wealth
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Did the picture of a potato predict the birth of NFTs?
Kevin Abosch is an Irish conceptual artist and photographer. He built a reputation for taking excellent portrait photographs – at a cost. Kevin charged anywhere from $150,000 for a professional shoot to $500,000 for licensing rights! Famous Silicon Valley executives like Eric Schmidt of Google, Sheryl Sandberg of Facebook, and Reed Hastings of Netflix hired Kevin to do their headshots – as well as A-list celebrities like Johnny Depp and Christian Bale. Initially, the ultra-wealthy might have preferred Kevin for his professionalism and the speed at which he worked. But at some point, the exclusivity of getting your portrait done by the man who photographed Johnny Depp and Reed Hastings might have created its own demand.
But here’s where things get absurd. Kevin didn’t make the headlines for his portrait game – it’s a picture of a potato that got him there. Kevin shot a potato with a black background that sold for $1 Million in 2015! Here’s the picture if you’re wondering:
Did the picture sell for its concept, or because people wanted to be associated with the photographer of the elites? Why do people spend money on things that obviously have very little intrinsic value? After all, it’s not like these goods are necessary for survival. But humans have a social component to everything they do – and in the last century or so, the impact this is having on your finances is growing exponentially.
Products like Kevin Abosch’s photographs, NFTs, and Supreme jackets are called Veblen goods. Unlike regular products where sales go up when the price goes down, Veblen goods sell more when prices go up. People assume that the high price of a product is a measure of its quality, and this might lead to a cycle of conspicuous consumption where people actually have less but want to show that they have more. This leads to a curious change – People with lower net-worth work hard to look like they have money (e.g with fashionable clothes and Ferraris bought on money they can’t afford), while “old money” doesn’t look wealthy at all.
It’s harder to spot wealthy people than you think. If you think you can do it, take a look at this video where I try to find the millionaire in a group of five people and guess along. It might teach you something about the difference between looking wealthy and being wealthy – and how you can focus on the latter:
An affordable house
Buying a house seems like a straightforward task – You just pick the house that you want in the locality that you want and start saving up for it, right? Well, the thing is, a house is a long-term commitment, and you’ll always feel the compulsion to just stretch “a little bit more” for the promise of a shorter commute, better schools, or more space. That isn’t wrong. But you should be able to figure out exactly how much you can afford to pay for a house at your income level, how much you can afford to overreach, and how to plan for it so that you won’t regret it later. All of this and more in:
Stay tuned for this weekend’s deep-dive where I’ll be exploring this in much greater detail!
The Federal Reserve Flipped
After 14 months of continuous rate hikes, the Federal Reserve has finally hit the pause button – signaling a change in the economic climate. The hikes were a tool in the fight against inflation. So the question is: Did it work? Here’s everything you need to know about the rate hike pause, the current inflation situation, how the stock market and real estate market are reacting, and more. You can also read my detailed deep-dive on it here.
Contradicting beliefs
It is difficult to get a man to understand something, when his salary depends on his not understanding it.
– Upton Sinclair
It’s okay to think positively. It’s okay to have a mindset of abundance. But it’s not okay to spend all the money you earn every month assuming “the universe” is going to deposit money in your bank account – but that’s what seems to be happening here. Caleb Hammer deals with a spiritual coach who is mismanaging her finances in the worst way possible. But it’s hard for him to get his point across because her entire job depends on telling people not to worry about the uncomfortable truths… A painful watch but a reality check:
The Dark Side of Child Stars
If you’re a 90s kid like me, you probably know Devon from the hit Nickelodeon show Ned’s Declassified School Survival Guide. It’s a show I have really fun memories of – but when I met with Devon to learn more about his experience, he gave me the inside scoop on what it’s really like to be a child actor. From working twelve hours under hot lights to disrupted school life and losing all the money he earned, Devon’s story is a personal look into the dark side of child acting, and how you need to be careful about the trade-offs you make…
So that’s it for my weekly round-up. See you next week with another bunch of exciting videos!
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When will the iced coffee hour merch be out? Ps thx for making the dividend video a bit back I loved it!