“You never get a second chance to make a good first impression.”
–Will Rodgers
“Your first impression of a thing sets up your subsequent beliefs. If the company looks inept to you, you may assume everything else they do is inept.“
–Daniel Kahneman
Hello everyone—
Impressions matter. Good-looking people get paid more. Those who dress better are more likely to be considered higher class.
We are programmed to make essential decisions based on first impressions and snap judgments.
This post does not cover items about behavior, your approach, etc., but the monetary costs associated with creating a good impression.
The question is, how do you give a good impression without going broke? How much does the context matter to the impression you make? And what are the tradeoffs between spending to create a good impression and making money?
I will try to explore those questions.
A STORY ABOUT IMPRESSIONS AND TRADEOFFS
Several years ago, I had a financial advisor friend who had a strange experience with a billionaire family. They were not trying to impress him, but they did–and not in a good way.
My friend had previous experience advising wealthy families. He had consulted with professional basketball players, famous Hollywood actors, and major corporations. But he had never met any individuals listed in the Forbes 400, much less advised them. This meeting was an opportunity for him.
So, he showed up at their house for his appointment.
The butler led him down wide marble-covered hallways with high ceilings toward the room where he would meet the head of the family.
As he passed through the home, he noticed paintings on the walls by some of the art world’s elite: prominent impressionists, old masters, and famous modern painters. Each picture was worth millions.
Finally, after traveling down one last long hallway, he was ushered into a private study to meet the family patriarch.
The man greeted him in a very modest room. It was not different than most rooms in most residences. And yet, a priceless Matisse was on the wall over the couch.
However, after shaking hands and exchanging pleasantries, he was instructed to sit on the couch so that they could discuss business.
It was the couch that really caught my friend’s attention and created an indelible first impression.
The sofa was shabby and worn. It was dirty and would have been more in place at a skid-row flophouse. The springs were showing, sprouting from it like some strange appendage. And my friend wondered if it would snag his pants sitting on it. As he looked around the room, he noticed the rest of the furniture was not much better.
Only after he worked with the family for many years did he discover why they had such worn and beat-up furniture. They divided their possessions into two categories: investments and non-investments. Non-investments were things like furniture, especially if no one but the company saw it. Couches were to sit on, and if a spring was showing, who cared? The Matisse was the investment, not the sofa.
The impressions of others about the couch did not matter.
THE CONTEXT: A FEW QUESTIONS TO ASK ABOUT IMPRESSIONS WHEN YOU HAVE LIMITED RESOURCES
Most are not in the same situation as the wealthy family above. We do not have unlimited resources, and we do have people we have to impress, which takes money and resources.
Expenditure on impressions can be for the place you live, own, or rent. It can involve your car, clothing, even the place you go to school—any number of items you need to pay for.
Juggling your finances versus making good impressions is a balancing act. So here are some questions to ask about some of the tradeoffs.
- Is creating an impression also an investment?—Most people do not think of expenditures doubling as investments, but in some circumstances, they do. Investments in home and health pay off. See here. In the right situation, making a good impression is an investment, too.
- What is the tradeoff of spending a lot of money to impress someone?–the wealthy save as much as 40 percent of their income. That habit is one of the reasons they ascend to a top net worth in the first place. To save that much, they must set priorities—including what they can afford to create a good impression.
- Who do I have to impress and why?—Who are the people you want to impress? Is it your peers? Your boss? Your customers? If you are a Hollywood actor, is it your whole public? And why do you have to impress them? Usually, it is to get a gain or avoid a loss. The “compensation” may or may not be monetary and needs to be considered, too.
So try to have a narrow focus and decide how and what to spend. Make sure your reasons are sound.
- When you must impress someone?—one of the reasons the billionaire family did what they did is because the space they shared was private, not public. They decided to have things be (barely) functional, not stylish, in private settings because a private setting is a different stage than a public one. And they did not need to impress my friend, the hired help.
My friend needed to do the impressing, not the other way around.
- To what degree do your expenditure and role go together?—sometimes, you have to dress the part and buy what is necessary for the role you have to play. Whether it is a uniform for a job, dressing up for a job, etc.
There are two parts to this issue: 1) are some jobs worth the cost you must incur as an employee? 2) what do you need to perform your role, and how much money is required?
- What matters when making an impression? Unobtrusive, clean, well-maintained items may not impress but won’t offend either—this applies to clothes, possessions, or other physical items. My friend noticed the couch because it was so decrepit. It would have made no impression on him if it had been old but serviceable. So, the moral is that money spent on impressions does not have to cover every item you own.
- How much do you have to gain from an impression? What is the proper response? —If there is a solid gain to be had, do you need to do anything that requires a response for an expenditure?
Once you have asked the questions, you can calibrate a response. Here are a few approaches and examples that others have used.
STRATEGY 1: SPEND MONEY WHEN YOU HAVE TO IMPRESS AND LIVE LIKE A MISER OTHERWISE
Example: the story of Chad (Johnson) Ochocinco— public flash and private saving.
Mr. Johnson Ochocinco was a famous football player and very popular with fans. He played for over ten years and made six Pro Bowls as a wide receiver. During that time he also earned about $49 million and claims to have saved 83 percent of it.
He partially achieved those savings by living at the stadium for the first two years and taking advantage of free showers and other amenities. It was a frugal and unconventional decision.
Things the fans expected, like flashy cars, were leased when he needed them. He did not buy them.
The impressions were rented. And the bling was costume jewelry.
In other words, he rented his glitz and glamor and saved his money.
STRATEGY 2: HIGHLIGHT QUALITY, BUT KEEP THE REST (THE CHEAP STUFF) NEUTRAL
Example: the story of my economy car
If you have to impress, showcase what shows. If you have to save money, go unobtrusive on other items.
This story is about a mistake I made when I violated this principle. I used to commute about two and a half hours per day. So, when the time came to replace my car, I got a tiny economy one. It was red with racing stripes.
I got a really good deal.
Not only did it not fit with my executive position, it stood out. Really stood out. And that visibility was the mistake.
The low end was okay if it was an unobtrusive color. Similarly, many of the executives drove well-worn but cleanly maintained cars. By no means did everyone drive a luxury car. But I heard about it from the Big Boss and his henchmen for not creating the right impression.
Postscript: I retired about 15 years before either of them did. Draw your own conclusions.
STRATEGY 3: GO FOR THE CLASSIC AND NOT THE TRENDY
Recognize that classics are less expensive over time, but that trendy items usually require spending a lot of money to stay current.
Example: The Classic Homes noted in the Millionaire Mind
Most of the millionaires in the Millionaire Mind bought modest homes compared to their needs and avoided custom homes altogether.
I believe the reason is that trendy looks are expensive and require constant updating. Classic looks in conventional homes are more likely to need updating and maintenance than complete remodeling, which saves money.
The general idea extends to other purchases, too. For instance, when I buy clothes, they are conventional designs with classic looks. It requires less updating when fashion changes.
Postscript: My spouse and I went on a tour of remodeled homes in our neighborhood this weekend. Many were beautiful, but several were done no more than five years ago and already look dated.
If you think a potential buyer will appreciate your superb taste, forget it. That is why most agents recommend a neutral, uncluttered look. That kind of classic unadorned look is more likely to appeal to buyers.
STRATEGY 4: KNOW WHO YOU HAVE TO IMPRESS AND WHEN
Example: Barbara Corcoran’s Coat
Barbara Corcoran quickly realized she needed to look successful to achieve her dream of creating her real estate empire. She was courting high-end clients, and impressions matter when you are in sales. So, when she made her first real estate commission, she took it and bought the most expensive coat in a luxury department store.
That made her fit in far better with the wealthy clientele she was representing.
According to one source, she is now worth about $100,000,000. Maybe the coat’s cost was cheap, after all.
Photo: freestocks
License: Unsplash