This is difficult to explain. I can’t figure out a rule of thumb for spending, the prices of things fluctuate so quickly it’s confusing. Here are some examples
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A house, prices are out of control, inventory is low, sellers are greedy. I’m feeling not only unable to afford it but finding lack of value in inflated prices
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Computer parts. Relatively cheap compared to pandemic but more expensive than before but also much cheaper than 90s/00s, but still could be cheaper
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TWS earbuds, completely different ball game from regular earbuds, disposable electronics.
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Food. Nights out with drinks now sometimes cost me more than 2 & 3, but seem like just keeping up with inflation
The prices range from 100,000s to 100s, but some are fleeting, some semi permanent, some last a long time. I also spend hours researching prices of parts and waiting for sales, but spending the same amount on social events in an instant
I think we’re seeing large scale price gouging.
Their arguments assume businesses operate in good faith. We fundamentally know that it’s not true, from overseas child labor by fast fashion to coal mining to IT security. This economist of theirs can fuck off
The bigger the business, the more likely they make their money unethically.
Economists work for the economy, which works for shareholders.
Prices don’t make sense because you, as a regular person, don’t see the overwhelming majority of what contributes to them.
For instance, I figure you aren’t particularly familiar with the output quantity of various semiconductor factories around the world, the overall percentage that are good enough for high end computers, and how many different companies around the world need them for their products, and in what quantity. Or even on the consumer end, how different use cases effect demand, along with how the various brands stack up against each other in their current offerings.
I find it funny that the four major categories of spending you chose are: housing, computer parts, food, and tws earbuds.
Those aren’t the major categories of their spending. It’s just four examples.
Just my recent observations, I guess it would be gadgets, housing, experiences
How the fuck are TWS earbuds so cheap?
If you’re looking for a rule of thumb to decide if something is worth the price, I have a basic method that helps me:
Don’t think about the thing itself, think about what it provides to you. Say you are thinking about buying a GPU to play games on your computer. The one that seems like the best fit costs $400.
What will that GPU provide you? You will get to play the games you want for about 5 years on average before the card starts to become too old to give you solid performance anymore. Or maybe you’re not too picky on framerates and settings, so it will last you 7-10 years before your next upgrade.
Consider how many hours of enjoyment you will get by playing games for the next 5, 7, 10 years. 5 hours of gaming a week, 52 weeks a year, 5 years gives you 1,300 hours of enjoyment. Now divide the original cost by that number. In our example, that’s roughly $0.30 per hour of enjoyment.
Does that feel like a good price for fun to you? If you could go to a magic vending machine, pay 30 cents, and feel enjoyment for an hour, would you?
That’s how I think about purchases, and it helps me quantify the value better and make purchases that are likely to be a good value to me. It also encourages me to use things a lot for a long time to get an even better amount of value out of them, which in turn is more environmentally friendly and helps me avoid the traps of rampant consumerism. Win win win.
Hope that helps!
Dude where can you find that magic vending machine? I meed one.
For me, it’s my computer lol.
Utility, not market value.
I reckon the utility of our house is equal to some % of the average or median (probably median) wage in my city, plus some premium for it being a house not apartment. Calculate that monthly or annual amount and back into a reasonable cost of housing.
Market value of the house is what I could sell it for. Right now that is much, much more than what a house is “worth”.
Which leads to funny conversations because I think we overpaid for our house & husband thinks we got a good deal. And both are true.
Sometimes fun things go by very quickly 😉. But it’s the same rule of thumb I have for content and games
No doubt there is no value to buying a home in a lot of areas rn.
I rent a 2 br townhouse for 1800/mo. I have a detached garage. I have a basement with washer and dryer. I have about about 1200 sqft plus the basement which is unfinished. Utilities combined is 200/mo. Heat is included.
A similar unit would be about $300k. I’d get probably 8% interest with a 750 credit score. I’d have basically the same mortgage as I have for rent. Plus I’d be responsible for stuff I’m not right now, like heat, water, sewer, trash, recycling, lawn care, and literally any maintenance.
It’s a way, way better deal to be renting right now I many areas.
That’s what a lot of people fail to understand. It isn’t just the price of the house. It’s everything else included (maintenance, replacement,taxes ). If over the very long term it’s cheaper to rent then probably just rent.
I implore anyone to look into this historical fact:
The Bush’s sold GW’s childhood home a few months ahead of an economic recession. They rented across town for a few years while they assembled a ‘historical society’ to rebuy the home after the housing crisis. It is now a museum in Milton, MA.
This happened in the mid-late 80s.
Even the ultra wealthy rent, when it makes sense economically to do so.
Owning is great and equity is important. But you don’t need to set owning a home in a pedestal.
With rent you’re just paying to live there. With a mortgage every payment means you own more of the place (equity). If you have payed off the mortgage or didn’t need one then you have equity that you can use for last-ditch funding.
Yes, but managing that equity comes at a cost itself.
If a hurricane comes and floods my basement, it is 100% $0 to me, not my problem.
And, more importantly, I will have more capital available to me to be a first time home buyers by being patient, which will allow me to build equity faster in the long run.
Good point on the basement but the overall concern seems to be that the cost of real estate (including renting) is getting so it’s not feasible for most people to move along from just renting (if they choose to).
Yeah, but that will create a supply issue
Either prices or interest rates will fall. Or the oublics buying power will Increase.
Curious if OP keeps a budget, log of his spending.
It’s a combination of people taking advantage of things, peoples’ hands being forced, and trying to make sure only certain people get the stuff.
I remember there was enormous backlash because people keep raising the prices on medical supplies such as insulin and inhalers. One day I discovered there was actually one place a friend of mine could get medical supplies for a reasonable price, but alas, people who didn’t even have the medical condition would buy it all in bulk… all before selling it at a separate location for the normal insane price.
It’s clear that you cannot totally follow both prosperity and freedom.
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Some people know people will buy what they have to offer, so they ask for more in return. I will say what I object to is people killing the competition, for example the same YouTube we currently know was responsible for the Tiktok gossip.
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If money is a priority, you take your mind off a lot of subtleties. Going back to the topic of medicine, the mafia tried selling insulin cheap in some places, at least before they ran out and started selling unassuming random assortments in it. This trend, which you can actually blame Reddit for, didn’t last.
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The biggest thing to remember is this thing we call currency is regulated and is dependent on uniqueness. It must be balanced with things like population and conflict. And note a part of this implies how non-automatic its existence is. If I began a civilization somewhere, the closest I’d do is go commodity, possibly with a services system, which I can already hear people bringing up my currently-faulty subreddit in response to (needs a few systemic fixes, I know).
No matter what country anyone mentions here, there’s a 100% chance it has a system that doesn’t work. If it’s not equal opportunity, it’s an unequal opportunity, and if it’s not flexible/independent, what you describe is inevitable, and things snap in two or get dragged down.
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