Other People’s Money

J Philip Faranda October 31, 2010

 Apparently I have missed the latest celebrity news about Charlie Sheen’s recent drug-induced binge where he was found in his hotel room with a porn actress and cocaine, but not his clothes. While the guy on the radio wondered aloud about Sheen’s crazed excesses, it was brought up that he paid the porn chick $12,000 to be his, um, companion while Elliot Spitzer spend a mere $4,000. How could it be, the host went on to ask, how a private sector guy would pay so much for a hooker but the governor of New York so much less? Shouldn’t it be the other way around, since private parties are more efficient than the government? The answer offered by one of the callers made a good point. Spitzer was not spending public money on the lovely Ashley Dupree, he was spending his own. People are far more likely to spend other people’s money more lavishly than their own. 

Other people’s money was the answer to that question, and many more. 

It is easy for us to spend other people’s dollars. I have sellers to want me to splurge on an expensive print ad, even though I have told them the results are not worth it. But it’s not their money, so they keep asking! Of course, the shoe is often on the other foot, when agents are so quick to tell a seller to lower their price, often to compensate for their crummy photos, typo-laden write up and poorly targeted marketing. If it were their house, the photos might be plentiful and crisp, and the remarks packed with a powerful, eloquent message.

So, regardless of what side of the closing table you might be on, the next time you are met with resistance, ask yourself the question: “who’s money am I spending with this idea?” The answer might surprise you. And that might make you come up with some more resourceful answers yourself. 

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