What is the difference between PRICE and VALUE ?

Hi Learner,

Price and Value sound very similar but they are very different in terms of meaning. Knowing their difference can make you a good investor and successful in terms of money and give an additional control over the way you spend your money and the time you take in spending the money.

Any product or item which can be bought can be judged or distinguished by their Price and Value. Coming to the Dictionary meaning them :

price – the amount of money expected, required, or given in payment for something.

value – the regard that something is held to deserve; the importance, worth, or usefulness of something.


The actual amount or price or number of currency quantity required to own a product can be termed as price of a product. Price will be more or less same for each and every person in the world if it differs only due to taxes, discounts or locations but these differences are not in the scope of this post.

Price the quantity of money needed to buy a thing / product is similar to every one in the world.


Don’t try to become a man of success instead try to become a man of value – Albert Einstein

This is a very interesting parameter or aspect about any product and which should be taken care before buying any product. Value of a product differs from every person to person, it cannot be same for family members not even husband and wife.

But, one has to very careful while estimating the value of a product otherwise the product might cause destruction of the same person only. In simple terms, the usefulness of a product to you can be used to estimate the value of a product.

Price and Value

Price is What you Pay, Value is What you GET. – Warren Buffet

Lets consider the below example to understand the price and value concept :

Expensive LED TV

You have bought and LED TV spending 100K so that you can enjoy world class TV experience in the TV but how much time in this fast moving corporate world do you have time to spend in front of your TV ? Ok, say weekly if possible on week days after or before office for an hour or two & 2 days in weekends that too not fully because most of the weekends would be spent by a corporate or a software guy taking rest and going out with family.

So, for an enjoyment of (5 x 2) + (2 x 7) = 24 hours for a week, you will pay the interest for the whole 100K for a time of (24 x 7)  168 hours along with the actual amount.

  • People buy high Price goods
    • to show off in front of others.
    • to impress their spouse / family members

But most of the times the high price items give short term happiness only. Instead of that big investment in TV if we can invest in a affordable TV without interest & installments in a single shot then you can enjoy your TV without additional burden of tension & interest.

And the left over money can be used for something else.

Credit cards make it easy

Be Careful… Borrowing money against our Integrity is easy but paying it back with Integrity might or can be difficult.

Due to the credit cards it is very easy now a days to borrow money and buy things but this is also putting an additional burden on your budget. Credit cards aren’t the things to be banned indeed we should learn to use them. As Rich Dad says Learn to Manage Risk when Poor Dad says Play it safe.

If we don’t know how to use them then we shall resist their usage until we learn to use them properly because To earn & buy an item which costs 50,000 might take month end for the salary to be credited though you earn 1 million per month but if you have a credit card with 50K limit, it just takes a minute.  That is the usefulness of the Credit card, but I know many people who are wasting their money and lives along with their families just with their credit cards. Credit cards possess power we should always learn to use it for us not Against us. 

Even in the above 50 K example if you discriminate between the price and value and buy the item if it is really valuable to you then you are said to be wise and using the Credit Power For you. 

Read : 12 + ways to save money

Window Shopping

Don’t do the things which are useless because you don’t have anything useful to do because

Doing Something is better than doing Nothing but Nothing is Better than Non-sense. – Anonymous

I have heard this term from my friends that some times they do Window Shopping, it is nothing but just going to a shopping mall to watch the products without the intention of buying just to pass the time but even this has the trap of shopping unknowingly if you find something attractive there.

Most of the people fall in the trap here only because, if they are going for window shopping only with the intention of watching things then why do they carry their wallets and Credit, Debit cards then they are sure that if something attractive is found then they will shop for sure that is why now a days shopping malls are very attractively built and attracting people for window shopping so that they can fall in the trap of shopping.

In The Millionaire Next Door book, the author describes how two families who live next to each other in the beginning with same financial situation, position and opportunities get transformed into two completely different families at the end where one of the family turns out be a millionaire family the other stays @ the same position, situation and opportunities.

The difference clearly is in spending more on high price and less value items rather than high valuable items though they are high or low in price. Focus more on Value rather than Price because if an item is valuable though it is expensive the investment pays off.Price is eating the value

For example, many people buy apple products though they are expensive because of the quality and the value they add to their lives and if the high price is really wrong to invest means people who buy them should not be successful in terms of money and investment but if you can see most of the successful personalities possess their products only because they are worth that price due to their value and quality.

 PRICE is literally EATING the VALUE of Product now a days, which is causing chaos

Thanks for reading. Share your views about PRICE and VALUE and the post content with me through comments, I would be very happy to hear. Share this post with your buddies if you like it.

Bye… Take care…

I am Surya Konduru, began blogging to share what I meant was useful with the world as I do it with my friends. It’s been a year since I am blogging and it is really awesome to blog. By the way, I blog @ learningispassion.com, bloggingispassion.com

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