$750 > $2,000

This isn’t New Math.  I’m going to show you why, if given the same choice I could be given, $750 is greater than $2,000. 

Needs vs. Wants

The company I work for is offering an incentive to donate a portion of our paycheck to United Way.  If we choose to donate $5 per week ($260 annually) to United Way, we will be entered into a drawing.  The grand prize winner can choose one of the following awesome prizes:

  • $750 in groceries (aka gift cards to a local grocery chain)
  • $1,000 in Best Buy gift cards
  • $2,000 in Apple products

Would you rather have $2,000 in wants or $750 in needs?

My first look at the flyer made me think the rewards were really silly. Who wouldn’t take the $2,000 value reward over the other two? Heck, the value of the Apple products is more than the value of the other two COMBINED.

$2,000 in Apple Products
Needs vs. Wants

When I first saw the flyer hanging in our building, I thought how great it would be to have $2,000 to spend on Apple gadgets.  I would have to buy the new iPhone 11 Pro 256gb ($1,380), the new watch 5 ($425) and finally some AirPods ($170).  That puts me just under $2,000.  Except that I don’t really need those items.  I have a phone with plenty of space that works, a watch that I wear every day, and several pairs of earbuds.  What’s more, is that the Apple package isn’t something I get to choose.  When you look at the fine print, the Apple products are previous year models of devices that were purchased for the company that weren’t used.  There is probably an older model Macbook, an older model iPad Air, and maybe an older model iMac.  Nothing I actually need.

$1,000 in Best Buy Giftcards
Needs vs. Wants

Ok, so what about the Best Buy gift cards?  $1,000 is a lot to spend on electronics.  We could get a new 4K TV and a decent sound system to go along with it.  Are you picking up on the trend?  It’s $1,000 is stuff that are wants.  Both the $1,000 Best Buy gifts cards and the $2,000 Apple bundle do nothing to improve my finances… they just give me stuff.

$750 in Groceries
Needs vs. Wants

That leaves the $750 in groceries.  We are going to buy groceries no matter what.  We NEED groceries for things to eat, so we can live, we can’t eat AirPods.  The $750 in grocery gift cards will improve our financial situation by allowing us to save $750 we would be spending otherwise.  It’s as if this gift is worth $1,500; we receive $750 in groceries PLUS have an additional $750 to spend as we see fit (AIRPODS!). $750 is > $2,000 when you consider the appreciation potential of $750 saved when invested vs. the depreciation of new Apple products. After one year your $750 grocery decision is worth $1,562 while your Apple choice is worth under $1,400 (conservatively).

Making the Right Choice isn’t Always the Fun Choice

Even with the fact that I could receive $750 on groceries and spend $750 on whatever Apple product I want (say a new XR and AirPods)… Choices like this (potential) one are played out all the time in life. It’s more fun to go out for lunch than pack lunch. Ordering that morning latte is more fun than making your own at home. But it’s the same discipline that puts people in a position to retire early and be financially secure. It’s the type of discipline I’m going to need if I am going to hit my millionaire status in 3,940 days. The more responsible dollars I can spend over that time, the better.

I hope I win the grand prize and have to make the “tough” choice of picking my needs over my wants.

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