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Jeter 3,000: Fan's Good Karma, Tax Relief, Other Bounty

Did Christian Lopez do the right thing after all?

When the 23-year-old cell phone salesman caught the ball that New York Yankees shortstop Derek Jeter drove into the stands for his 3,000th career hit, and then gave it back to Jeter -- no charge, thank you -- I was quick to chide him for his mental accounting error.

The ball is worth $250,000 in the collectibles market. But Lopez, who evidently owes north of $100,000 in student loans, put the ball in the mental category of "found" money, which made it easy to give away. He'd never have treated earned money that way. It's a common mistake. $1 found is just as valuable and just as yours as a $1 earned. Both spend exactly the same.

But as my friend Bill Dwight at FamZoo, a kids-and-money website, pointed out: "I think he made a wonderful deposit in the long-term Bank of Karma." Turns out the long term is less than a week.

The Yankees showered Lopez with seats and memorabilia, though worth nothing approaching the value of the Jeter ball. That seemed to compound Lopez' mistake as accountants contacted by The New York Times and The New York Daily News estimated he might owe up to $14,000 in income tax on the rewards.

Here's where it gets interesting. Two companies have pledged to pay the tax, if in fact it is owed. The Miller High Life brand is one, claiming it wants Lopez to "continue to live the high life." Topps is going to put Lopez on a baseball card and Mitch Modell, CEO of Modell Sporting Goods, said he would give Lopez a 2009 World Series ring that he got as a sponsor of the Yankees. The ring has a collectible value of around $30,000.

But it gets better. Modell and Brandon Steiner, CEO of Steiner Sports, guaranteed Lopez at least $25,000 each towards his student debt, and Steiner is going to toss the young man 5% of the proceeds of a coming auction of Yankees' memorabilia, again to reduce his student debt.

The Lopez bandwagon seems to have a long tail. So, in the end, did Lopez not only do the right thing in his own mind but also the most financially optimal? It's a close call. The stuff he's receiving still seems to fall short of what the ball would fetch at auction. But the kid is on the ride of lifetime, which even in stark economic terms has a lot of value. What might someone pay to have his experience? Could be a big number if you were able to auction it.

My hang-up is that what Lopez is receiving now in return for his grand gesture is out of his control. It might not have played out this way, while holding onto the ball would have provided some certainty, which I like. Yet there is no disputing that his deposit in the Bank of Karma is paying big dividends. In this case, a mental accounting error may have been in his favor.

Photo courtesy Flickr user sf9067
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