Proxies of Value

by Ben Perreira

I’ve said it before so I’ll say it again – the hardest thing to do is accurately value something. The hardest things to value is ourselves. Instead we use proxies.

Take my friend who works does market research for a multinational. The company used to fly her around the country every week until they decided she should be stationed in Amsterdam. I’m not sure if her salary went up (assume it didn’t), but the company also now had to pay for her apartment to the tune of 3000 euro (~$3600) per month. Based on her career level, $3600 per month could easily equal half her salary. Suddenly her company is plausible paying $120k per year for her services plus benefits.

Another friend met a girl about four years ago in Santa Monica. It turned out that the girl lived in Pasadena – a lovely area but a solid 45 minute drive from Santa Monica in no traffic. He didn’t have a car at the time so he had her come meet him near his house. When she got there, she came off as uninterested in him. There was one huge problem – she had just driven over two hours in traffic to meet him. The map didn’t match the territory.

Just like my friend with the great job was able to glean her value through the company’s high rent payment, my friend who met the girl from Pasadena was able to gauge her interest by her insane commute.

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