The Economics of Gold-Digging

The following story is currently making the rounds on the Internet. The events probably didn’t happen exactly as described, but for my purposes it doesn’t really matter.

Supposedly, a woman posted the following personal ad on Craigslist:

What am I doing wrong?

Okay, I’m tired of beating around the bush. I’m a beautiful (spectacularly beautiful) 25-year-old girl. I’m articulate and classy. I’m not from New York. I’m looking to get married to a guy who makes at least [a] half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don’t think I’m overreaching at all.

Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a businessman who makes average around 200 – 250K. But that’s where I seem to hit a roadblock. 250,000K won’t get me to Central Park West. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she’s not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level?

Here are my questions specifically:

- Where do you single rich men hang out? Give me specifics- bars, restaurants, gyms.

- What are you looking for in a mate? Be honest guys, you won’t hurt my feelings.

- Is there an age range I should be targeting (I’m 25)?

- Why are some of the women living lavish lifestyles on the Upper East Side so plain? I’ve seen really “plain Jane” boring types who have nothing to offer married to incredibly wealthy guys. I’ve seen drop dead gorgeous girls in singles bars in the East Village. What’s the story there?

- Jobs I should look out for? Everyone knows — lawyer, investment banker, doctor. How much do those guys really make? And where do they hang out? Where do the hedge fund guys hang out?

- How you decide marriage vs. just a girlfriend? I am looking for MARRIAGE ONLY.

Please hold your insults — I’m putting myself out there in an honest way. Most beautiful women are superficial; at least I’m being up front about it. I wouldn’t be searching for these kind of guys if I wasn’t able to match them — in looks, culture, sophistication, and keeping a nice home and hearth.

The response she got was as follows:

Dear Pers-431649184:

I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament. Firstly, I’m not wasting your time, I qualify as a guy who fits your bill; that is I make more than $500K per year. That said, here’s how I see it:

Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here’s why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party, and I bring my money. Fine, simple. But here’s the rub — your looks will fade and my money will likely continue into perpetuity … in fact, it is very likely that my income increases but it is an absolute certainty that you won’t be getting any more beautiful!

So, in economic terms, you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain: you’re 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35, stick a fork in you!

So in Wall Street terms, we would call you a trading position, not a buy and hold … hence the rub … marriage. It doesn’t make good business sense to “buy you” (which is what you’re asking) so I’d rather lease. In case you think I’m being cruel, I would say the following: if my money were to go away, so would you, so when your beauty fades I need an out. It’s as simple as that. So a deal that makes sense is dating, not marriage.

Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as “articulate, classy and spectacularly beautiful” as you has been unable to find your sugar daddy. I find it hard to believe, if you are as gorgeous as you say you are, that the $500K hasn’t found you, if not only for a tryout. By the way, you could always find a way to make your own money and then we wouldn’t need to have this difficult conversation.

With all that said, I must say you’re going about it the right way. Classic “pump and dump.” I hope this is helpful, and if you want to enter into some sort of lease, let me know.

I have to say that the respondent has some pretty sensible economics in his answer. My guess, however, is that with that mindset he probably doesn’t have any more success with ladies than the gold-digging woman does with men. Just as politics often trumps economics when it comes to public policy, rational arguments rarely win the day in dating, love, and marriage.

I wouldn’t expect male economists to marry very well. Firstly, they tend to think like the guy who wrote this letter. Secondly, they tend to be nerds. Thirdly, they make very little money when they are young because they get so much education, even though their lifetime income is quite high. Yet I think it is fair to say that the economists I know have married stunningly well (myself included). We’ve all been puzzling over this fact for the fifteen years I have been in the profession. As of yet, no one has come up with a good explanation. I doubt it could be perfect foresight on the part of the women we marry.

Also, completely contrary to what an economic model might predict, I can’t think of any economist who left his wife in middle age for a younger “trophy” wife. There must be cases, but none that spring to mind.

So maybe economists aren’t such heartless, conniving people after all. Or maybe economists just care so little about human relationships that it’s not worth the trouble to try to acquire a trophy wife.

(Hat tip: Meng Li.)

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  1. Ryan says:

    Hidden due to low comment rating. Click here to see.

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  2. Ryan says:

    Perhaps the earnings prospects for a married man are better than for a single man (ie. if you’re single maybe you might quit the rat race and go live on a tropical island instead, but if you’re married it signals to your employer that you’ve got too many responsibilities in life to do something that frivolous)

    So, to the extent that being married rather than single improves one’s potential career prospects, the economic analysis in the article may have underestimated the benefits of the tradeoff.

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  3. living in queens says:

    *sigh* where to start.
    In response to the young woman:

    Its unfortunate that so many years after the feminist movement women still see their looks as their best asset, even when they are ‘geniuses’. This, it seems, is because it is STILL the asset that is best rewarded monetarily. Perhaps thats a theme for another day?

    I am also a 25 yr old woman, well educated, decently attractive and living in NYC. What I can say, from what Ive seen around me and experienced is the following:
    If a wealthy man is something you really want, you have 1 of serveral options. Either marry young, before he becomes successful and when you might actually be in love, or marry an older, divorced man. Why, you ask? Because An older man who is already divorced will continue to see you as young and attractive (hence, you will not depreciate quickly), since youll always be younger than him. Its not like hes going to do much better. The man you marry when hes young and unsuccessful…theres a chance he might decide he wants a ‘younger version of you’ in 20 yrs.
    Of course, theres also the option of marrying a ‘trust fund’ baby, but that comes with its own risks and challenges. Finally, the option of marrying one of the Hedge Fund millionaires. Too bad they are all coked out.

    Having said all of this, I once had the option of money over love and chose love. Does that mean I never think about the porsche and the live in cook i could have had? No, but I know Im much happier living in my little apartment with my amore!

    Well-loved. Like or Dislike: Thumb up 79 Thumb down 3
    • Mmmmmal says:

      Hidden due to low comment rating. Click here to see.

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      • nothing better do to says:

        Hot debate is in itself a incomplete sentence; the proper punctuation would be the usage of the exclamation mark. Thus, (hot debate.) should read hot debate! This of course is subject to debate, I suggest further diatribes into the trivial it helps fuel my ego because it is important what the message is, only the incredibly trivial details of grammer usage on some random internet comment board.

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  4. living in queens says:

    *sigh* where to start.
    In response to the young woman:

    Its unfortunate that so many years after the feminist movement women still see their looks as their best asset, even when they are ‘geniuses’. This, it seems, is because it is STILL the asset that is best rewarded monetarily. Perhaps thats a theme for another day?

    I am also a 25 yr old woman, well educated, decently attractive and living in NYC. What I can say, from what Ive seen around me and experienced is the following:
    If a wealthy man is something you really want, you have 1 of serveral options. Either marry young, before he becomes successful and when you might actually be in love, or marry an older, divorced man. Why, you ask? Because An older man who is already divorced will continue to see you as young and attractive (hence, you will not depreciate quickly), since youll always be younger than him. Its not like hes going to do much better. The man you marry when hes young and unsuccessful…theres a chance he might decide he wants a ‘younger version of you’ in 20 yrs.
    Of course, theres also the option of marrying a ‘trust fund’ baby, but that comes with its own risks and challenges. Finally, the option of marrying one of the Hedge Fund millionaires. Too bad they are all coked out.

    Having said all of this, I once had the option of money over love and chose love. Does that mean I never think about the porsche and the live in cook i could have had? No, but I know Im much happier living in my little apartment with my amore!

    Well-loved. Like or Dislike: Thumb up 9 Thumb down 1
  5. popeye says:

    this is really funny. There might be some economists who might have trophy girl-friends on the side. It is more convenient to have an affair I guess than to just dump one’s wife after a certain age because switching costs are high.

    Well-loved. Like or Dislike: Thumb up 22 Thumb down 0
  6. popeye says:

    this is really funny. There might be some economists who might have trophy girl-friends on the side. It is more convenient to have an affair I guess than to just dump one’s wife after a certain age because switching costs are high.

    Well-loved. Like or Dislike: Thumb up 6 Thumb down 0
  7. Victoria says:

    Economists are not heartless, they’re careful. Which may be partly why they make good life decisions.

    Well-loved. Like or Dislike: Thumb up 18 Thumb down 1
  8. Victoria says:

    Economists are not heartless, they’re careful. Which may be partly why they make good life decisions.

    Thumb up 4 Thumb down 2