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Perceptions vs Reality

Posted by Philip Smith on 10 September 2019

Our perception are often wrong.

My eldest grandson, Jack, is 8 years old and very worried about the farmers, the drought and the fires.

Last year he raised $ 25.50 for the farmers, all off his own volition, and this year he was determined to do better. Read how he raised the $ 25.50.

Once more I watched this little man gear himself up for raising more money. We ( he ) decided  that a garage sale would be a good idea, because we ( I ) had lots of stuff we could sell.

He contributed some of his toys to the sale and helped to pack, sort and price all the stuff we found around the house and garage that he thought was worth selling.

It was a delight to observe the process of deciding prices for the sale items, as determined by an 8 year old.

There are a range of issues to consider in selling random items to random people at a garage sale, and to my surprise he managed to price small items within an acceptable range, but the bigger items presented a problem.

We discussed this and he stated that something big should cost more than something small because it would cost more to make. We had an interesting discussion around the issues of value and cost and now he goes around determining the potential sales value of everything in my garage.

The entire process was great because it reminded me that we all have these imbedded perceptions, which are often wrong.

We call out the plumber and he fixes the problem in 15 minutes before presenting us with a bill for $ 200. At this point we are surprised, as it only took 15 minutes.

Once we consider this equation from the plumbers perspective we have a very different picture.

He was able to fix the problem in 15 min because he has spent years learning how to diagnose and fix plumbing problems.

He had to travel, by vehicle, from somewhere to attend to our "emergency" .

By law he has to be licensed and insured, plus he must carry all the specialist plumbing tools and parts he might need for most tasks.

Then he has to pay tax on his income and has to deal with all the administration and red tape required.

Think of this the next time you call out the plumber or electrician and ask yourself what you would charge to do the same work, bearing in mind the issues I mentioned above.

Also consider what value the repair has to you. Would it be cheaper to leave the plumbing problem until the house is wrecked / flooded. or maybe you can live without your fridge for a few weeks.

Our trades people provide a great service, but they face a huge cost structure that is outside their control.

It is always what we do not see that carries the punch.

We see the price but what is the invisible component ( you might enjoy reading Bastiat on this subject ).

A recent report regarding the cost of Red Tape, states that the cost of a house and land package in Sydney, Melbourne and Brisbane, carries compliance cost ( red Tape ) of 50%, 37% and about 30% respectively of the final house price.  ( link to article below ).

Next time give your plumber a very big thank you and pay his bill with a smile.

If nothing else, you will surprise your plumber and probably make their day.

Red tape, taxes stymie house construction


PS - Jack raised $ 94.60 for the farmers

PSS -  A good friend of mine just contributed  $ 50 to Jacks Farmers Fund ( he bought some books )

           Jack contributed $ 5.40 from his pocket money

           Grand total - $ 150 - Great outcome and grateful thanks to all those who contributed.




Philip SmithAuthor:Philip Smith
About: Philip specialises in getting projects and businesses that are not performing as well as expected, back on track.
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