Ask Dr. J
Put Your Money Where Your Mouth Is
Is it true that time can be valued as money? Consider the following situation:
A patient comes in, and considers having some cosmetic dentistry done that would greatly improve her smile. After learning more about the procedure and the costs, she consulted a financial planner. She wanted to make a wise decision, you see. Her financial planner listened to her story and told her that if that same amount of money was put in a retirement account, there would be a significantly larger sum at the end of 30 years. Weighing her options, the patient decides to forgo the cosmetic procedure and not fix her smile. It seemed to be a better investment of money to do so.
Which was the better investment?
We can’t blame the financial planner for the advice given the patient. Financial planners see things in measurable terms of funds and investment, and it makes sense that any answer would involve that route. But it is possible there is a flaw in this logic, and in the decision the patient ultimately made?
Michael Lewis once said that “every investment is a gamble.” Over the last decade, the stock market has been almost flat. One dollar in stocks in 1999 would be very nearly the same — one dollar — in 2009. Additionally, the patient neglected to calculate beyond the monetary costs, and did not consider what an improved smile might bring. Perhaps no longer feeling self-conscious about teeth would be the needed boost of confidence to allow for improved performance at a job interview and allow for a better paying job or secure the big client. Perhaps it would bring about that raise or bonus that often comes with success.
What is the monetary value of confidence? That is the real question at hand.
With every investment — whether financial planning or cosmetic dentistry — it is important to consider both the gamble and the benefit. Some things don’t have an obvious or apparent monetary value, but should not be discounted as having none.