The Economics of Love
As promised, I dedicate this entry to Lynn Sim Xianglin, whom I love dearly and whom I demand must find someone who loves her as much and treats her how she deserves to be treated. The excerpt below is advice that I believe we all ought to follow. But then again, this might just be naive belief on my part, a hope that if these rules are followed, then everything will be miraculously be perfect hmm. Well, worth a shot, I guess.
Points excerpted from Ben Stein's article in the NYTimes, titled "Lessons in Love, by Way of Economics".
- In general, and with rare exceptions, the returns in love situations are roughly proportional to the amount of time and devotion invested. The amount of love you get from an investment in love is correlated, if only roughly, to the amount of yourself you invest in the relationship.
- If you invest caring, patience and unselfishness, you get those things back. (This assumes, of course, that you are having a relationship with someone who loves you, and not a one-sided love affair with someone who isn’t interested.)
- High-quality bonds consistently yield more return than junk, and so it is with high-quality love. As for the returns on bonds, I know that my comment will come as a surprise to people who have been brainwashed into thinking that junk bonds are free money. They aren’t. The data from the maven of bond research, W. Braddock Hickman, shows that junk debt outperforms high quality only in rare situations, because of the default risk.
- In love, the data is even clearer. Stay with high-quality human beings. And once you find you that are in a junk relationship, sell immediately. Junk situations can look appealing and seductive, but junk is junk. Be wary of it unless you control the market. (Or, as I like to tell college students, the absolutely surest way to ruin your life is to have a relationship with someone with many serious problems, and to think that you can change this person.)
- Research pays off. The most appealing and seductive (that word again) exterior can hide the most danger and chance of loss. For most of us, diversification in love, at least beyond a very small number, is impossible, so it’s necessary to do a lot of research on the choice you make. It is a rare man or woman who can resist the outward and the surface. But exteriors can hide far too much.
- In every long-term romantic situation, returns are greater when there is a monopoly. If you have to share your love with others, if you have to compete even after a brief while with others, forget the whole thing. You want to have monopoly bonds with your long-term lover. At least most situations work out better this way.
- The returns on your investment should at least equal the cost of the investment. If you are getting less back than you put in over a considerable period of time, back off.
- Long-term investment pays off. The impatient day player will fare poorly without inside information or market-controlling power. He or she will have a few good days but years of agony in the world of love. To coin a phrase: Fall in love in haste, repent at leisure.
- Realistic expectations are everything. If you have unrealistic expectations, they will rarely be met. If you think that you can go from nowhere to having someone wonderful in love with you, you are probably wrong.
- You need expectations that match reality before you can make some progress. There may be exceptions, but they are rare.
- When you have a winner, stick with your winner. Whether in love or in the stock market, winners are to be prized.
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