Oscar Wilde wrote that a cynic “knows the price of everything and the value of nothing.” I'm not so sure. It seems that few people manage even to know prices.
Consider the question: how much does a bed cost? Stop reading; take a minute; and think about the question. Come up with a dollar amount for an answer. Have you arrived at an amount? No? Alternatively, you can cheat (as I did) and ask our God of Answers, Google. Google referred me to that lesser deity, Yahoo! Answers, who claims that the best answer is $789. This seems high. I would have guessed lower, say, a few hundred dollars, but I have simple needs when it comes to beds and never purchased a bed myself.
But, as you may guess, the question is a trick. Even the cheapest of beds cost more than the high figure of $789; they cost thousands more, even tens of thousands more. Why? Because you probably won't own a bed without also owning a bedroom to go with it, and bedrooms are dear, price-wise, even here in Phoenix where they've dropped in price by about one-third over the last few years.
The example of the bed exemplifies a great flaw in typical reasoning about prices; the overemphasis on the cost of obtaining and the over-discount of the cost of maintaining. What does a bed cost? For me, the difference in rent between an apartment that comfortably fits a bed (i.e., a one-bedroom) and an apartment that doesn't (i.e., a studio) is about $100/month. So a bed costs me a few hundred dollars upfront plus $100/month for the life of the bed, plus or minus rent price fluctuations in the future.
For people who are inclined to argue with the details of my analysis and say that you can fit a bed in a studio (which is true), look at this way. Rent costs me about $1/sq-ft-month, and a full-size bed takes up about 30 square feet. This means that in our thriftiest of scenarios, where there's no accounting for space around the bed and rolling out of bed in the morning results in a solid thud of knee knocking into wall, a bed still costs $30/month. Even a low-ball figure like this means that a $360 bed is “repurchased” once each year.
Is a bed worth $30/month? I suppose most people answer in the affirmative. I won't argue against the subjectivity of the question. If beds are worth a lot to you and dollars aren't, then buy a bed and keep paying for it. In any case, the important thing is that we're honest with ourselves about prices. Many things cost a lot just to keep around if for no other reason than the square footage they occupy. Anyone who has bought a lot of square footage in Phoenix in the last few years is feeling this point acutely these days.
In my own case, I don't own a bed. I discovered, largely through chance experimentation with different sleeping arrangements, that camping equipment functions well indoors, packs small, and costs less than conventional furniture. That I don't own a bed makes me feel better about overspending on that carbon fiber bike I bought back in 2009. There's no such thing as a bike-room. (Not yet!)
2 comments:
While this is an interesting perspective and I won't argue the validity of it I would present a counter example and am curious as to how you would explain it.
Several years ago, as you know, Jen and I moved from an apartment into a house. We did this for two reasons: 1) we wanted to own a home and 2) we wanted to have kids. Our house has about 2000 sq. ft. more floor space. I have discovered, since having kids, the reason you need more floor space is for all the stuff kids come with. Especially the toys. So we now have a mountain of kids toys and the floor space to put it. All of which cost about $150 less a month than we were paying in rent for the apartment.
Now yes, you can argue that it's not really $150 less a month since with the house we have to pay taxes. But I'll come back and say yes, I have to pay taxes but about $200 some odd dollars goes into equity in the house every month. So unlike rent I will, hopefully, see that money again some day.
silverfunk— Of course, there's not much to explain. You and Jen moved away from the center of the city and to where real estate costs less. To put another way, I could move to Manhattan and pay much more for fewer square feet than with my situation in Phoenix, but that says nothing about the statement that, apples-to-apples, having more square feet costs more than having fewer square feet.
Several years ago, around the time you and Jen bought that house, I ran some numbers and came to the conclusion that houses are neither good nor bad investments, and that a person should buy a house only because they want to live in a house. One of the points of my post is to say that spending less is not automatically better than spending more, only that we over
emphasize the cost of obtaining and under-emphasize the cost of maintaining.
Thanks for the comment.
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