Why Pay More, Or The Reason Jay-Z Collects Art, Revisited

My Rental Outside My Cayman Condo

I didn’t have much time to write this week, as I was traveling with an arts institution in China, about which country I may have some observations in a future post. For now I’ll just mention that as we were leaving, one of the travelers saw that the Shanghai passport control guy had several pictures of her on his computer screen — glasses on and off, wearing and not wearing a hat — all taken on the street during our short stay. They were apparently building profiles of us all, like a real life Black Mirror episode.

I will also note that Chinese-style authoritarianism could never take hold in America, because censorship makes the Internet run too slow and Gen Z would rebel.

One of my fellow travelers, a Wall Street legend, is an exemplar of the Why Pay More? philosophy I described in the below piece from March. I remember the time I was leaving a dinner to celebrate this man’s nine-figure gift to the institution and saw him hailing a cab on the street like anyone else: no wasting money on limos for this icon. It came out on the trip that he’s a Costco member and he and his wife go there to buy, inter alia, dental floss. (He’s also almost 90 and in great shape, making him my hero for that reason as well.)

This Asia trip was unusual for me in that I was among the poorest in the travel group, all of whom were trustees of the institution. I’m not one, but I guess they had an extra space, so they brought me up from the equivalent of AAA ball to join. I liked all these people so much that I was going to write a Substack called Billionaires Are Nice, until my wife reminded me of the Silicon Valley type of billionaire, people like Musk and Andreessen. Not so nice at all.

Here is the original Substack.

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The parking valet at Chef Eric Ripert’s restaurant inside the five-star Ritz Carlton in Grand Cayman looked at the “Why Pay More?” sticker on the hood of my Kia Solo from Andy’s. “Yes, we’re eating at Blue,” I said, handing over the keys. I felt no shame at the quality of my ride and tipped extra, as if to suggest that my money-saving redounds to the benefit of all.

Even as I’ve done well financially over the last 20 years, my core frugality, stemming from a middle-class upbringing with Holocaust survivor parents,¹ has been unshakeable. I often say that my father taught me the value of a dollar, and I mean a specific dollar that he gave me and I still have. In fact, since I’m basically innumerate, whatever financial success I have is due to the love of bargains I gained at his side.

My attitude to money is complex, though. I make adjustments throughout my day to save hundreds or even tens of dollars, while not infrequently investing or donating far larger amounts after brief deliberation. I’ve long ago stopped trying to change, and now just do what feels right. I’m lucky to have a wife of 30+ years who is herself the child of two Depression Babies and so understands my method, which I’ll call “Why Pay More?”

The WPM practitioner takes pleasure not in conspicuous consumption but its opposite: value. He could have the tasting menu at Per Se but will enjoy it much less than a great inexpensive dinner at an up-and-coming Greenwich Village spot (especially if the place hasn’t been reviewed, so he can brag to friends). A WPM-er has no problem renting a Kia Solo, because he doesn’t fear the judgment of valets or others, and even takes a little pride in that sticker on the hood.

Paying For Quality

Sometimes you should pay more, if it’s feasible. The adage “Buy the best house you can afford” is true, you do get what you pay for in many consumer goods – and if they’re on sale, all the better. Many years ago, I paid up for a pair of Alden dress shoes, the salesman told me they’d last forever, and they have (just resoled them). Buying a car is a very different process from renting one, and the WPM-er will usually go for quality – but will also have studied all the ratings and chosen a reliable model over a sporty one.

If my father were still around, I think I could debate him to a draw on the wisdom of paying for quality in select cases. What he would never be able to understand is consumption delinked from cost, constrained only by whether you have the money. There’s a market in Bridgehampton called Round Swamp that has no price tags on most food, making it a surprise what your bill will be at checkout.² Obviously the thronging customers don’t care, but Chaim Sawikin would rate the whole thing meshuggeh, nor would arguments based on the market’s high quality change his mind.

I’d have trouble convincing him in part because I also choke a little on Round Swamp. Does $37 for a prepared eggplant parmigiana “make sense,” even a delicious one?³ How about $12 for a few peaches? Round Swamp patrons who were not raised in budget-conscious families might address my complaints by asking if I can afford the prices or not. “That isn’t the point,” I’d say – but they don’t see the world the way I do.

Why Pay a Lot More?

At some levels of wealth, the WPM method begins to look less like frugality and more like obsession. Let’s consider the most well-known frugal billionaire, Depression Baby Warren Buffett. He has lived in the same modest house in Omaha since the 1950’s and until a few years ago drove himself to work in a 10-year-old Cadillac bought with hail damage on it. Buffett clearly has an aversion to spending money and even felt the need to apologize to the world for buying a plane, explaining that he had to, to visit Berkshire’s companies.⁴

Exemplifying a more complex relationship to wealth is a billionaire of my acquaintance, whom I will call Colonel Mustard. Mustard, from a middle-class British background, owns several homes, including a castle, and a museum-quality art collection, but never flies private, considering it a waste of money. I can picture him rejecting a $50,000 private flight to visit his castle, accepting a layover and other hassles, and five minutes later buying a $500,000 painting without hesitation.

This scenario with the painting gets us toward an understanding of WPM-ers’ apparent contradictions. For them, to spend/waste large sums on transitory experiences like private flights would be to violate their nature and feel bad. Yet they, like everyone else, want to enjoy their money; viewed in that light, buying art is a form of consumption that feels okay, more like investing than spending.

And Colonel Mustard will pay up because WPM doesn’t apply to art, where no work is directly comparable with another. You can’t substitute for a Monet with a cheap landscape at a clothesline art sale. Costco sells no Kirkland label Gerhard Richters. The best the frugal collector can do is tell himself that he got a relatively good deal.

Note in this regard all the hip-hop stars with art collections, including Jay-Z, Ja Rule, and Swizz Beats. It’s nice to have beauty on your walls, and there’s some social status in collecting, but I suspect a main attraction of art for them, all once working class or poor, is its dual consumption/investment character.⁵

The impulse to collect is related to frugality and the love of bargains, and it starts young. Show me a kid who puts all his spare cash into coins or investable sports cards, and I’ll show you a potential future fund manager.

A Self-Directed Mindset

Fortunately, WPM is self-directed and doesn’t mean lack of generosity with family, friends, and employees. What the practitioner hates most is waste, and whatever you may call paying staff fairly or helping out a relative or friend in need, it’s not waste. The WPM-er is not a miser.⁶

And there’s no evident connection between frugality and the charitable tendency: many wealthy people known to be cheap are also highly philanthropic. To cite one example of many, Chuck Feeney, the founder of Duty Free Shops, was dedicated during his life not to spending but to giving: $8 billion in total.

I could name billionaires who live the opposite way, but you can probably think of those yourself.

1. My father was a printer who worked the night shift, and my mother was a secretary. We had a rent-controlled apartment and let one room to a boarder, which seemed only normal to me.

2. I have a game where I type my prediction for the total on my phone and flash it to my wife at the register. I try to guess high and yet always wind up too low.

3. In further defense of Round Swamp, besides the quality, they make their money for the whole year from May through September.

4. I once met with a real estate mogul in Hong Kong who didn’t have an office, but just gave himself a cubicle to work out of. I’m sure he knew the reaction this would produce in visitors and that they’d talk about it after — as I’m doing now.

I don’t have an office anymore or even a cubicle, but work at a desk in the corner of one room with the rest of my team. I prefer it this way.

5. “Fuck livin’ rich and dyin’ broke/I bought some artwork for 1 million/Two years later, that shit worth 2 million/Few years later, that shit worth 8 million/I can’t wait to give this shit to my children” – Jay-Z, “The Story of O.J.”

It’s in the same track that he congratulates the Jews for accumulating property, and when I heard that I was like, “Thanks Jay-Z, you’re not helping.”

6. Legendary misers include Charlie Chaplin who, while he was the highest paid star in Hollywood, never picked up a check, and J. Paul Getty, who installed a payphone for guests in his mansion. Cary Grant, who was a movie star and married to an heiress, presented his houseguests with a bill for laundry and other expenses. Getty, whose hondling over ransom cost his kidnapped grandson an ear, didn’t even have the excuse of growing up poor.