Page 236 - Paulisms: Gold Nuggets for Small Business

The Cost of Beer – What is the True Cost?
It’s interesting when you look into people’s perception of how much something costs. Not many consider the true cost of a purchase. When I see people buying beers or shots at a bar, I wonder at times whether they really understand how much that actually costs them.
For example, you buy a beer and it costs $10. Most people don’t realise what it costs them in the first place. In this example, you must earn around $14 in salary/wages if you take tax into account (depending on what the tax is in your country or what your tax bracket is) to be able to pay for that ten dollars. I think that if people understand how much they are paying out personally for an item, they would think twice about wasting that money.
So yes, a round of tequila shots costs $100 at the bar, but it’s really costing you $140, which you have to earn. And I think if we get this perception through to people (particularly through to the younger generation who want everything now), I think it would change the mindset of a lot of people’s spending habits.
There has been great talk in New Zealand about the affordability of housing, which is also a worldwide issue. But I know that when I wanted to buy a house, I worked several jobs, worked seven days a week and didn’t spend on unnecessary things. There were sacrifices. Look at the number of coffees people purchase a day – their early morning fix and then they may have 2–3 coffees a day. That may cost $15, but they need to earn $21.42 on a 30% tax rate to pay for it. Multiply that by seven days and it’s $105 spent on coffees, or $149.80 a week needed to earn to pay for coffees. That’s $7,789
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