Tuesday, October 09, 2007

On Appreciating Assets, and Depreciating Ass(ets)

From my friend ML, in PA, a most fine link.

The premise:

Okay, I'm tired of beating around the bush. I'm a beautiful (spectacularly beautiful) 25 year old girl. I'm articulate and classy. I'm not from New York. I'm looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don't think I'm overreaching at all.

Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a business man who makes average around 200 - 250. But that's where I seem to hit a roadblock. 250,000 won't get me to central park west. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she's not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level?

The response:

Your offer, from the prospective of a guy like me, is plain and simple a cr@ppy business deal. Here's why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here's the rub, your looks will fade and my money will likely continue into perpetuity...in fact, it is very likely that my income increases but it is an absolute certainty that you won't be getting any more beautiful!

So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you're 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!

So in Wall Street terms, we would call you a trading position, not a buy and hold...hence the rub...marriage. It doesn't make good business sense to "buy you" (which is what you're asking) so I'd rather lease. In case you think I'm being cruel, I would say the following. If my money were to go away, so would you, so when your beauty fades I need an out. It's as simple as that. So a deal that makes sense is dating, not marriage.

Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as "articulate, classy and spectacularly beautiful" as you has been unable to find your sugar daddy. I find it hard to believe that if you are as gorgeous as you say you are that the $500K hasn't found you, if not only for a tryout.

By the way, you could always find a way to make your own money and then we wouldn't need to have this difficult conversation.
For so many assets, it makes more sense to lease, instead of purchase. My wife always wants to buy a beach house, as an investment. Instead, we bought 35 acres of property south of Pittsboro, as a tree farm (better tax treatment, much better appreciation potential).

And, when we go to the beach, we rent this place: Costs at least $4million to buy, but we can rent it for a week or two in the off season and live like kings for a little while.

The point is that you can separate the investment, and consumption, functions. In sexual relations, better to date the bimbo, and marry the smart person (that goes for either sex, by the way: having smart children is an enormous advantage, and at some point you might want to have an actual conversation with your spouse).

If you can find someone smart AND pretty (and I have to say, Angus and I both got extremely lucky in this respect), so much the better. But date looks, and marry smarts.


Shawn said...

...the linchpin is: If my money were to go away, so would you, so when your beauty fades I need an out. If it weren't for that, it'd be a heartless response, but calling attention to her mercenary attitude and then engaging her (or, rather, NOT engaging her, yukyuk) on that score, was perfect.

Dirty Davey said...

Beach property in North Carolina is the perfect case for rental. Hurricanes? Not your problem, rent somewhere else. Erosion? Not your problem, rent somewhere else. Your favorite quiet beach neighborhood gets overdeveloped? Not your problem, rent somewhere else.

Unknown said...

Damn, the devil just ice-skated by, wearing a muffler.

Dirty Davey....AGREES WITH ME?