Some consumers pride themselves on never buying retail, but it takes no great intelligence to determine what is the lowest price. If the same widget sells for two different prices, then paying the lower price is indeed the correct method of resource allocation. Yet there is wisdom in knowing when to pay more for something. It comes down to understanding when a genuine tradeoff exists.
Among the trade-offs we encounter in financial decision-making are considerations of now vs. later or risk vs. safety. If you’re driving in an unpopulated, wilderness area, you’re running low on gas and you finally see a gas station whose gas price seems outrageously high to you, the little accountant inside your head may be saying “I’m not going to pay this much for gas.” But he should consult with the little economist in your head who could point out that the high price is a market signal indicating there is no other gas station even close, and you risk getting stuck in the middle of nowhere if you don’t fill up now.
A more mundane now vs. later issue involves buying something– say, shoes –of lesser quality and thus cheaper, which, however, may cause you to pay more in the long-term to buy their replacement or to repair the damage they did to your feet.
As we already saw in chapter 6, purchasers of insurance are often attracted to the lowest premium without due consideration to the reliability of the insurer to actually pay out claims when the insured has experienced a loss.
Another area where people do not always think through the financial implications concerns taxation. Because people generally hate paying taxes, and hatred is emotional, there may be a large element of irrationality in their thinking. Thus people will sometimes go out of their way to avoid the payment of taxes, even if they are thereby distorting their actual preferences.
If you could be equally happy in (high-tax) California vs. (low-tax) Florida, then the latter will surely save you a not insignificant sum of money. But if all of your loved ones are in L.A., and you hate humidity, then the move to Miami might not make a whole lot of sense. Similarly, if you remain in the U.S. because taxes are somewhat higher in Israel, you’re missing out on all of the benefits of living in Eretz Yisrael and assuming all the risks of remaining in the U.S.
In short, instead of focusing on tax minimization, it would be better to look at optimizing after-tax well-being.
Health is another area where we should be less willing to compromise to save money. The Talmud teaches that “a doctor who works for free is worth his wages.” Waiting an hour amongst an army of sick people to meet with a doctor for a brisk consultation resulting in a standard prescription of antibiotics is an example of a poor trade-off. The biggest problem with this picture is not necessarily the HMO setting. Many people cannot afford out-of-network private care. The problem rather is that any system that disallows the doctor to genuinely hear and understand the patient’s needs is liable to mishap, such as assigning the wrong remedy. It pays to upgrade one’s medical choices at least to the extent necessary to effectuate a genuinely advisory doctor-patient relationship.
Good health involves more than the investment of money, but also a modicum of time and effort. Probably all Jewish children have heard their older relatives kvetch that without your health, you’ve got nothing. Well, the source of this idea is the Talmud, which says of one whose sickness rules over his body that “his life is not a life.” The Rambam calls bodily health one of the ways of God, as sickness and pain detract from a person’s ability to comprehend any part of knowledge of God. A worthwhile life in this world must be comfortable enough to study wisdom and do good deeds in peace.
It’s not just that illness is debilitating, and hence cuts into your productivity; it also keeps you from enjoying what you have. Since wealth is beneficial only when it can be enjoyed, it seems fair to state that investing in one’s health is not just a way of God, but also vitalizes and sustains the process of becoming wealthy.
Ultimately, the difference between the consumerist view of wealth and the Jewish approach is that the Torah knows how to draw a line, while the former is always grasping for more. More money, more objects, more honor and prestige inevitably result in more desires and more stress to satisfy them, which is not compatible with a true enjoyment of life – a concept instilled in every Jew by way of Shabbat and the chaggim, in which work is strictly forbidden and feasting and spiritual contemplation are the order of the day. Regardless of how strong our desire to accumulate might otherwise grow, these sacred times actually dictate that we be happy with our portion, and train our restraint for the weekdays.
The Jew who balances earning with learning, working with growing, is as theJew in his hut on Sukkot, humbly serving his God while serenely enjoying the fruits of his labor.
 Bava Kamma, 85a.
 Beitzah 32b.
 Hilchot Deot 3:3, 4:1.
 Hilchot Teshuvah 9:1.