Decide On The Thing Before You See The Price
Separate the want decision from the affordability decision so price never silently vetoes desire before you have evaluated the asset.
- Difficulty
- Easy
- Time to result
- ~days to results
- Steps
- 5
- Confidence
- 86%
When Hamilton found the Malibu house, Gabby looked at the price first and he stopped her: look at the house, decide whether you want it, and only then let the price into the conversation. His argument is that the price is irrelevant if you would not want the thing anyway, so the sequence is want-first, price-second. He then applied a second filter, location, standing across the street without even entering the house, because he could see the ocean and the specific wave he loves to surf. He bought it roughly 25 to 26 years before the episode, at a price he calls cheap for Malibu and describes as a big purchase at the time, and notes that Malibu property worth a million dollars 25 years ago is worth around 25 million now. The rule he draws out is that you can always change or rebuild a house but you cannot change where it is.
Origin
Came from buying the Malibu house from a Greek engineer who had built it for his own family and then divorced during construction; Hamilton made the call from across the street without going inside.
Core principles
- 01Want and afford are two different questions asked in that order.
- 02Price is irrelevant to an asset you would not want anyway.
- 03Location is the one variable you can never renovate.
- 04Stress-test the asset from the outside before the inside.
- 05A big number at the time is not the same as a bad decision.
How to run it
- 1
Hide the number
Deliberately withhold the asking price from yourself and from whoever is deciding with you until the asset has been assessed on its own merits.
Pro tip Say it out loud to your partner before the viewing, the way Hamilton did with Gabby, so the sequence is agreed in advance.
- 2
Answer the want question in isolation
Evaluate whether you want the asset at all. If the answer is no, the process ends here and you have spent nothing on the affordability analysis.
Watch out Do not let a guess at the price leak into this step; an assumed number distorts it as badly as the real one.
- 3
Judge the unchangeable variable first
Separate what can be altered from what cannot. Hamilton stood across the street and judged the view, the ocean and the wave, because the house itself can always be rebuilt but the location cannot be moved.
Pro tip Make the assessment from outside the asset, before any staging or interior finish can influence you.
- 4
Reveal the price and run affordability
Now bring the number in and do the arithmetic. The decision is no longer whether you want it but whether and how you can structure it.
Watch out Accept that a genuinely right asset will usually feel like a big purchase at the moment of buying.
- 5
Hold on the unchangeable variable
Once bought, protect the reason you bought it. Hamilton has held the Malibu house for 25 to 26 years and built the whole training community and pool around it.
Pro tip The asset compounds because the location thesis was correct, not because the structure was.
In the wild
The house had been built by a Greek engineer for his own family, who divorced during the build. Hamilton showed it to Gabby, who went straight to the price, and he told her not to look at the price and to look at the house instead. He then never went inside during that first visit, standing across the street where he could see the ocean and the wave he loves to surf, and decided he loved it.
→ Bought at a price he describes as cheap for Malibu but a big purchase at the time, held 25 to 26 years, and now the site of the pool training community that athletes travel to.
Common mistakes
Letting the price form the opinion
Once the number is known, most people reverse-engineer their assessment of the asset to match what they think they can afford, which means they never actually evaluated the asset at all.
Buying the structure instead of the location
The house can be changed and rebuilt; where it sits cannot. Paying for finishes and layout while under-weighting location buys the only variable that depreciates and skips the one that compounds.
Using the rule as permission to ignore reality
The sequence defers the affordability question, it does not delete it. Hamilton is explicit elsewhere in the episode that this does not mean being stupid or ignoring your reality.
Is it for you?
Best for
Buyers of large, location-bound or once-in-a-generation assets where the emotional 'is this the one' question is the real decision.
Not ideal for
Routine, fungible or commodity purchases where price genuinely is the deciding variable and comparison shopping works.
From the transcript
“don't look at the price, look at the house. Just think if you want the house.”
“why would it even matter what the price was if you didn't want it anyway? So, first let's see if you want it.”
“I mean, you can always change the house, you can rebuild the house, but you can't change where it is.”
From the episode
Laird Hamilton: The Big Wave Surfer Who Built a +$10 Million Business Empire
Laird Hamilton