Stuff Costs More Than You Think

by thecombjelly • 16 years ago

46 24 16 years ago

andre3k12• 16 years ago

The author is attempting to find the opportunity costs of his purchases retroactively. It's very important to weight the opportunity cost of something before making the purchase.

The method that he uses to elicit the values is extremely interesting. He locks the items in storage to realize their true value to him.

In the process he discovers a major economic principle. I can't remember that exact term used to describe the situation, but I think it deals with Willingness To Accept (http://en.wikipedia.org/wiki/Willingness_to_accept). In summary, the principle states that one tends to increase the value placed on a good if he owns it. For example, you bargain with a salesman for a hat. He brings the price down to $10. A well-dressed man sees you walking out of the store with your newly purchased hat. He likes it, so he makes you an offer for $10. You will likely not accept because the hat is now worth more to you than just $10.

Overall, the article itself is presented in a motivating fashion shedding some light on these economic issues.

aston• 16 years ago

You were looking for the Endowment Effect (http://en.wikipedia.org/wiki/Endowment_effect).

andre3k12• 16 years ago

Yeap, that's it! Thanks bud.

joshkaufman• 16 years ago

Another related concept: Total Cost of Ownership - http://en.wikipedia.org/wiki/Total_cost_of_ownership

Luc• 16 years ago

Isn't it obvious in this example that selling the hat is a waste of time and potentially money? Much better to tell the well-dressed guy to go and haggle himself, so HE's the one taking on the risk of not getting the price down to $10 again, and HE's the one spending his time. I mean, you just bought a hat, why sell it for no profit?

RK• 16 years ago

For those who haven't read pg's realated essay:

http://www.paulgraham.com/stuff.html

MrFoof3• 16 years ago

There's an old William Morris quote that I tend to live by: Have nothing in your homes that you do not know to be useful and believe to be beautiful.

In the past 2 1/2 years or so I have been slowly paring down my possessions. As a result my living space has decreased from 960 ft2 to 720 ft2, and now to 670 ft2. In 4 months, I could consider downsizing again, probably to 550 ft2 or so. Less space means I can get a nicer space for the same money (though usually less), in a better location. Maybe I'd consider staying put if I had a live-in girlfriend, as there's plenty of closet space for someone else's things.

It's amazing the amount of stuff you tend to haul around with you. What do I miss that I've gotten rid of? Not a thing. I now know where everything is. It's getting increasingly easier to get at everything Cleaning is simple. A smaller space means lower utility bills (i.e. electric going from $80/mo to $35/mo). Fewer clothes (that I never wear) means less laundry to do. I still have some useless things that have sentimental value, and it'll probably take considerably more time before I consider passing those along.

Though most importantly, it leaves more money available for the things you really care about. Money is ultimately a tool, and I'd rather have it available for more worthwhile things.

sasmith• 16 years ago

How does fewer clothes that you don't wear mean less laundry?

MrFoof3• 16 years ago

Less closet space being wasted. It's nearly 2AM, so I'm not as coherent as I'd normally be. Though if you have an overly packed closet, it could result in some garments needing to be ironed more from being crammed together all the time.

Sirlord• 16 years ago

I think it's a bad example. More clothes mean you will do laundry less often but have bigger loads when you eventually do, while having fewer clothes means doing laundry more often.

nodata• 16 years ago

Did you blog this? Got a link?

MrFoof3• 16 years ago

Unfortunately not. Work tends to take over my life, so I've little free time to myself. Except for now, where I got sick of work taking over my life and I've placed myself back on the market.

tomjen3• 16 years ago

>“To invent, you need a good imagination and a pile of junk.”

forensic2• 16 years ago

That's an outdated perspective based on mechanical invention.

My inventions are informational. I do need a pile of junk on my harddrive and servers, though.

tome• 16 years ago

The quote is "useful or beautiful" which is significantly different!

Qz• 16 years ago

Similar to a person maxim I've come upon recently: Everything is always more expensive than you think it is. Yes, even more expensive than that.

maguay• 16 years ago

One thing about it: you wouldn't be able to downscale nearly as much without a laptop/tablet/iPad and a smartphone. Those two items, which of course are still stuff, can take over what a dozen different things used to be used for. That's maybe one of the most significant changes of our decade.

sliverstorm• 16 years ago

There are three kinds of things that go in the basement, but only 1.5 of them need throwing away.

- The Junk. Stuff you have but can't bear to throw away; after leaving it in storage for a few years you are willing to part with it.

- The Memorabilia. Stuff that has memories attached to it- for example, a stuffed animal. Some of this stuff could be thrown away, some is not worth chucking.

- The Winter Clothing. Stuff you only need occasionally, but cannot do without. I think a lot of people discount or forget about this category when they talk about how little stuff you should have in your life. My mechanic's tools, rain gear and winter clothes are not being used more often than not, but when I have to have them I have to have them.

krmmalik• 16 years ago

I moved to a new flat recently, and had an intermediary stay at my parents before that.

I, intentionally didnt take my desktop PC, my xbox or TV with me.

I also didnt take any of my suits, smart shoes and a whole host of books.

For the first few months, i didnt miss any of them, but i am starting to miss my TV, xbox and Desktop PC now.

Not particularly missing anything else, but then again, i didnt have that many things to start with.

toolate• 16 years ago

I spent a year and a half living and working overseas. I went from an apartment full of furniture to a single room in a share house. All I owned were the clothes in my cupboard and a laptop. I honestly didn't miss any of my possessions.

In many ways I had less than when I was a starving student, but it felt much different because what I did have was the money to buy things if I needed them. Having the ability to buy things I might need or want was more important to me than actually owning them.

varjag• 16 years ago

His notebook has massive cost per his definition: massive time-sink. How about ditching it?

goodside• 16 years ago

For a website that's espousing the virtues of minimalism, those sure are some tacky mouseover effects in the header.

Stuff Costs More Than You Think

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