I wanted to share something that has benefitted me quite a bit. About 10 years ago when I started to think about finances more something I realized about stuff that I would purchase was illuminating. An item is worth what you can sell it for after you are done with it.
Lets do an example of how this comes into play. Say I want a new dining room table and chairs. These items new would set me back $500 or more, and depending on the build quality, and design if I go to sell it in 5 to 10 years I might get $100 out of it. Now if I go looking for used stuff and find a nice antique set in good condition at a baragin for say $200, I can be pretty confident that I will get most my money back out of it down the road when I want to sell it. So that set doesn't necessarily cost me the full $200. If I don't like it I can turn around and sell it for most of what I have in it.
There are a lot of premium products - see r/buyitforlife that hold their value very well, especially if you get them for a bargain used. A friend recently bought a weber grill for $100 used, and when he decides to upgrade it will most likely still be worth $100.
Another part of this - Occasionally I score a killer deal on something I want. I recently got a nice antique love seat for $20. But it was probably worth $125 on the used market. Remembering the rule of it is worth what you can sell it for, I listed it for sale, because I would not be willing to spend more than $50 on that item, and it sold for $100. (Had it not sold I of course would have just kept it, and I would realized my assumed value on it was too high.) This concept is hard because you already have the item in your hands, and if it is something you want it is hard to part with it. Now there are obvious things to calculate like time invested buying, and selling it etc. I'll let you work those out for yourself.
We also have to modify this concept on wear and tear items, or more cutting edge technology items. The phrase then becomes - it is worth what I can sell it for once I am done using it. A car is an obvious example, along with cordless tools, cell phones, laptops etc. I usually try to purchase these items used, and use them until they are not yet obsolete, sell it off while it still has good market value, and replace it with something a little nicer as to minimize depreciation.
Hope this helps some people. I know it has me.
June 30, 2019 at 07:32PM
