There's a middle ground between not spending and spending extravagantly. So many people with large incomes just waste it away and end up with nothing at the end. We're not talking about a single $500 iPad. We're talking about a $500 night at a club.
How great a night we're talking here? Because, in general, experiences are worth more than gadgets (see below what I mean). Though (sky)diving lessons or vacation would probably be better than a night out.
"Asked which of the two purchases made them happier, fully 57% of respondents reported that they had derived greater happiness from their experiential purchase, while only 34% reported greater happiness from their material purchase."
"If Money Doesn't Make You Happy Then You Probably Aren't Spending It Right", Journal of Consumer Psychology
"In 5 studies, we find that people's material purchase decisions are more likely to generate regrets of action (buyer's remorse) and their experiential purchase decisions are more likely to lead to regrets of inaction (missed opportunities)."
"Buyer's remorse or missed opportunity? Differential regrets for material and experiential purchases.", Journal of Personality and Social Psychology, Vol 102(2), Feb 2012, 215-223.
As I said "There's a middle ground between not spending and spending extravagantly." Whether that is experiences or material goods. A $500 nightclub night once a year in Vegas is perfectly reasonable. A $500 nightclub night every weekend is probably over the line for most people.
Well, as you probably knew when you wrote this comment, there are locations which are more expensive.
If you would want to, you could probably spend double that and not even get drunk, by e.g. booking a table or w/e...
Whether it is rational/reasonable to do that is something I cannot answer generally (obviously) but to me it is not. However, as such things exist they have to be reasonable enough to some one, as they are being used.
