(This comment was made in response to people who were upset at rich people buying $400 Louis Vuitton handbags, saying it was stupidly wasteful.)
There's a reason for extravagance, and if you're middle class (or anything but dirt poor) then you do it too, on a smaller scale. It has to do with the marginal utility of money, which I'll go over briefly.
Utility is a measure of usefulness, and the marginal utility of money decreases, which means that the usefulness of extra additonal money depends on how much you already have.
This isn't a crazy idea. Take food, for example. The usefulness of food definitely depends on how much you have already. If you have no food, then it's a life-or-death situation to get some. But once you have enough to survive, more food will just make you fat. In fact, since being fat is unhealthy, and since food expires, food's marginal utility becomes negative after awhile. Food is worth a lot if you have nothing to eat...but once your home is stocked up, additional food is not valuable.
A lot of purchasable things are like that, and since money is only good as a trade for other things, like food, money's value goes down as you get more of it.
A hundred bucks to a hobo on the street is a godsend. A hundred bucks donated to Bill Gates bank account...wouldn't change his life at all.
So to a rich person, the wallet really is worth $400, because to them that money literally just isn't worth as much, because they already have everything they need. We're thinking of what we could buy with that $400...but they already have all those things.
It's like a starving person saying you were dumb to buy a new pair of shoes, because you could have spent that money on food. Yeah, you could have, but you're not starving, you don't need more food than you have. You have the needs filled so you can only spend the remaining stuff on what you want.
Money buys the most important stuff first, then less important stuff as you get richer, until all that's left is the $400 wallets. You've run out of useful things to buy, which means the rest of your money is less useful, and hence less valuable. At that point, it's no longer about needs, or even wants, as they are all completely taken care of. The meaning of money changes...it's about the power you can now buy, or the wealth you can now signal, or...well, I don't know. I'm not that rich.
This is also why rich billionaires can pledge 50% (or in Warren Buffet's case, 99%) of their wealth to charity. It's all "top" money that they're pledging. It's not nearly 50% of their utility, because most of the utility is located on the "bottom", in some sense. They are pledging 50% of the money but maybe only 1% of the value the money has towards their own personal self interests.
This also explains why expensive items appear not just expensive, but overpriced too. They are priced from the vantage point of a rich person's dollars, which are worth less than your dollars.
The poorer you are, the more overpriced things seem to be, that is, the higher prices are as measured in the utility of the money to you. This is why medical bills and so on are said to be particularly hard on the poor.
And to a rich person, middle class stuff seems cheaper than it really is for us. And food and other basics even cheaper. They tend to forget that money starts being worth a lot when you're poor. It's hard to mentally transition over.
So, it's an ugly extravagance to buy middle class things, from the perspective of a person who is dirt poor, who can feed their whole family with that money for a long time. It looks to them like we're buying something not only expensive, but overpriced, much like an expensive handbag looks to us.
Every social class looks stupidly wasteful to the people below, because they are buying things the people below would be stupidly wasteful to buy.