Listener Question:
We were recently invited to apply for a private social club in New York. My wife is especially excited, but we’re trying to be thoughtful before saying yes. The initiation fee is $50,000, and the annual dues are $10,000 for an individual or $18,000 for a couple. The club promises strong networking and cultural opportunities, but I’m not as convinced as my wife that we should make this big of a commitment. How do you help families decide if something like this fits into their broader financial plan?
Step One: Can You Afford It?
Before considering the intangible benefits, the first question is purely financial: can you afford it?
If the $50,000 initiation fee and the $10,000–$18,000 annual dues would strain your budget or compromise your savings and spending goals, the decision is simple—don’t join. But if your plan already covers your financial priorities and still leaves room for discretionary spending, you can move to the next step.
Step Two: Don’t Overvalue the “ROI” Pitch
Many clubs highlight networking opportunities, access to private investments, or cultural events, making it sound like joining will pay for itself.
While those benefits may be real, it’s risky to justify the cost as a financial return on investment. The more reliable value comes from non-financial benefits: experiences, relationships, and a community you enjoy.
Step Three: Test the Fit Before You Commit
Not all clubs are the same—each has its own atmosphere, culture, and member base. Visit as a guest multiple times, at different events and times of day. Ask yourself:
- Do you genuinely enjoy being there?
- Is it convenient to attend events?
- Are the people and activities aligned with your interests?
For you to get real value, it should be somewhere you want to spend your free time, not somewhere you feel obligated to go because of the price tag.
Step Four: Set a Review Period
If you join, commit to a review period—perhaps two years—and be willing to walk away if it isn’t delivering the enjoyment you expected.
One common trap is the “sunk cost” mindset: you’ve already paid $50,000, so you keep trying to “make it worth it,” even if it’s not a fit. Remember, the initiation fee is gone once paid. The real decision each year is whether the ongoing $18,000 (or $10,000 for individuals) is worth it.
Step Five: Remember—This is a Consumption Decision
This is not an investment decision. It’s a lifestyle choice. You’re paying for enjoyment, community, and access. And there’s nothing wrong with that!
If it fits your budget, aligns with your interests, and you’re excited to participate, go ahead and join. Just make sure the choice is intentional—and that you’d still feel good about it without trying to justify it in financial terms.
This post was adapted from the Scholar Wealth Podcast. For more insight, listen to the full episode.