It’s only riding a bike upright that you never forget. Riding one this way requires constant mental application every time.
Several years ago, your humble, previously fit blogger was testing only one of his body’s limits – its circumference. Tired of being a corpulent pile, he stumbled across a 2-week free membership at the now-defunct World Gym and proceeded to pay for an annual membership once the free one expired.
Months later, left town for a week. Returned home, and went to the gym only to see the parking lot empty and the doors padlocked. Outside were representatives from a competing chain, Gold’s Gym, selling memberships. They offered literally the deal of a lifetime – $99 a year, forever. The agreement was half a page long. Its only catch, if you can call it that, was that the rate would vanish upon cancellation. Quit and attempt to rejoin, and you’d pay whatever the going rate would then be.
$99 a year to maintain, if not improve, this new lighter and stronger body? They could have quadrupled their bid and it still would have been a bargain. Once you’ve exited the ranks of the disgusting pantloads, it requires little encouragement to remain on the outside.
And Gold’s has had a loyal member ever since, The End.
Yes, but that doesn’t explain the financial benefits of the decision to join Gold’s, which are still accruing.
Gold’s won out over 24 Hour Fitness and some local chains for several reasons. Gold’s has 750 locations around the world, perfect for a hopeless vagabond. Most of them stay open all night.
Paying for the privilege of an organized place in which to lift, stretch and run? Some people will do so for the intended purpose. Others, a number we’ll quantify later, join gyms for a different reason. It’s so they can say they joined a gym. Now, they can employ a new set of pronouns. They can tell friends and acquaintances about “my” gym, as if it’s LA’s Wild Card and they’re Manny Pacquiao.
If you’re going to work out once or twice a week, you might as well not bother. 5 times a week is somewhat standard, and there’s no reason why daily isn’t doable. It’s a habit, no different in form than smoking cigarettes or eating breakfast.
Allow a liberal 30 days a year for traveling and other unavailability, and that means 335 workouts annually. 30¢ a visit. In some jurisdictions, that’s cheaper than one of the aforementioned cigarettes. Subtract the cost of soap and water for a shower and, at least for this member, Gold’s is making negligible money on the deal.
Gold’s has been around for almost 50 years, and we already told you how many locations it has. The company is not run by idiots. How can they afford to lose money on their best customers?
Because this blogger is not one of their best customers, but rather one of their very, very worst. Someone who goes into a standard retail outlet 335 times a year and buys something on each visit is a “good” customer. Someone who pays a flat fee and then gets as much use out of the facility as possible is a different type of consumer, taking advantage of a different business model.
But in the whole, the subscription-based model works. It has to. It would be impractical and unworkable for Gold’s to charge per visit. Doing so would discourage the infrequent visitors, and the frequent ones even more so.
During one year’s reupping of the annual membership, the manager marveled at its low rate. (That original member agreement has since been scanned and preserved for posterity’s sake.) Sensing an opportunity to gain some asymmetrical knowledge, and noticing that there was nobody around, it came time for a discreet question. What ratio of members actually use their memberships? His answer could not have been pithier:
This location has 8000 members, 85% of whom I never see.
Of course it’s a cliché, the fat person who activates a gym membership on January 1 and disappears on January 9, but it’s nevertheless valid. Not only is it a cliché, it’s a demonstration of how easy it is to be a free rider if you’re just the least bit conscientious.
The average membership at said gym is around $300 annually. From the perspective of management (and of the 15% of members who actually use the place), the absent 85% are by far Gold’s’ best customers. They’re pure profit. And for the high-frequency members, pure subsidy.
God bless all 6800 of those negligent members’ rotund posteriors. Without them, in order for Gold’s to generate the same revenue, the gym would have to charge each of the rest of us $2000 a year.
So on some level, we’re not talking about being a free rider. We’re talking about being a +$1901-a-year rider, thanks to a bunch of people who make financial decisions with their emotions:
“I have to get into shape. A gym membership will do the trick.”
“I need to shed those holiday* pounds.”
“That pregnancy weight just won’t go away.” (Note: complainant’s youngest child is now 11.)
“I want to look good for my cousin’s wedding this fall.”
That last one takes the cake, not necessarily literally. If you want to look good for anything other than its own sake, or for the feeling of well-being that accompanies it, save yourself the bother. If your body’s composition needs to change, that change should be permanent. And that should be obvious.
This is a personal finance site, not a fitness one, but the lesson remains. Let other people pay your way, if you can.
It follows that you should never be on the other side of that transaction. A $35,000 golf club membership that you use 4 times a year is ludicrous. Your fellow members, the retirees and men of leisure who play hundreds of rounds a year, appreciate your largesse. Even though they probably don’t know that it’s you who’s being so generous.
Buy assets. Sell liabilities. A fixed cost that you’re never going to use is not an asset. Personal finance is agonizingly simple sometimes. Once again, why isn’t everyone rich?
*By the way, you can’t attribute a starting date to a particular pound. If you’re fat around Christmas, you will be fat the following July. And probably the previous one. The very act of seeking a scapegoat, however impersonal (“holiday” pounds, as if Christ’s appearance in a manger is responsible for you swallowing that deep fried onion whole), nullifies your commitment and betrays you as insincere. In a similar vein, you don’t have “wedding” debt nor “vacation” debt nor “furnished the new house” debt. You just have debt. Debt that you chose to incur, and that your creditors are entitled to.
