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Re: Conspicuous Consumption
Old 08-11-2006, 04:54 PM   #21
 
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Re: Conspicuous Consumption

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I went in just to look around. I left with a sports car.
So Martha what kind of sports car was it?
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Re: Conspicuous Consumption
Old 08-11-2006, 09:04 PM   #22
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Re: Conspicuous Consumption

DW and I went to an auction last weekend. A 9000 sqft new construction house pretentious McMansion that was almost but not quite finished. We never did find out the story of why the house and all its contents were being auctioned. In any event, the people building the house had apparently bought all the antique furniture, oriental rugs, fancy prints and oil paintings to put in the house when it was finished and all these were auctioned off when they went bust. It was astounding to see how little the signed Chagall, Dali and Picasso prints fetched at aution compared to one one would pay for the same things in a gallery. All in all, a very sobering experience.
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Re: Conspicuous Consumption
Old 08-11-2006, 10:09 PM   #23
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Re: Conspicuous Consumption

Just think of all the stuff in the McMansions that won't last as long as the 30 year Mega Mortgage. The super sized SubZero Stainless side by side and the Industrial strength Mega range with matching pot filling water spout will all be resting in the scrap yard long before the the payments are over. How many times will the carpeting be replaced while the first piece is still on the books of the 30 and long yardage mortgage? How many furnaces and ac units and roofs will you have before the first ones are paid for?

Just imagine buying a $250 water tank and paying to have it installed on a 30 year loan!!!!

And then you get to pay to have it hauled away.
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Re: Conspicuous Consumption
Old 08-12-2006, 12:53 AM   #24
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Re: Conspicuous Consumption

Lots of interesting points below, folks. Let me see if I can address a few before I dose off (it's almost 2am here).

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Originally Posted by saluki9
There are some of us who can do both.* You don't have to be one way or the other, it's called balance.* See, I get made fun of by my coworkers because I bring my lunch with me to work.* I probably save about 6 bucks a day and to me it's not that big of a sacrafice.* ...

One the other hand, there are some luxury items that are totally worth every penny.* ...* Maui ... a third car as a weekend toy.* ... You don't have to be one or the other.
It's certainly true that you don't have to be 100% one way or the other. As a matter of fact, my spending patterns were quire similar to yours for a number of years after I "got" LBYM: frugal with day to day expenses, but willing to spend a fair amount of money on things that were important to me, what a friend of mine used to call "sanity money". In my case, it was travel and books.

However, as time went by, I noticed that my newly acquired LBYM habits slowly worked their way into the "sanity money" area as well. Why spend $25 on a new book if you can get a used copy or a remainder for $5 if you know where to look? Why spend a lot of money on a vacation on the West Coast if you know that you will likely be spending many months there on business over the next few years and will be able to work some sightseeing into the schedule? There are all kinds of little mind games that you can play to minimize your entertainment expenses while still getting the desired effect.

And then there is the rather unfortunate fact that our hobbies and interests may change over time. The kinds of books that gave me so much pleasure just 10-15 years ago leave me mostly cold now and I am stuck with thousands of them* That's why these days I try to make sure that my hobbies do not result in the accumulation of bulky "stuff" that may turn into dead weight at some point. Thankfully, DVDs take up very little space if you store them right*
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Re: Conspicuous Consumption
Old 08-12-2006, 07:33 AM   #25
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Re: Conspicuous Consumption

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Originally Posted by Martha

I can't keep ice cream in the freezer either. I will eat it all.
Your supposed to put ice cream in the freezer Man, you can learn a LOT on this board
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Re: Conspicuous Consumption
Old 08-12-2006, 08:11 AM   #26
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Re: Conspicuous Consumption

I don't understand people with "THINGS". Life is so much simpler and easier when people only live with what they need. As for me, I'm happy to declutter but yet can't do things paperless. At the office I still have 1 side cabinet full with personal files...I wonder how much that will grow to in another 30 years.

I learn how not to accumulate since in college. It was an eye opening of how much I can live with only 1 cooking pan from a set of 12. From having an apartment with my sister and brother, I went to share with roomate then renting a room, move several times...kept some belongings in storage then at the end I thought geez...the hell, what a trouble, just give them all away.

That attitude has stick...I still look at my desk right now and think what else I don't need.
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Re: Conspicuous Consumption
Old 08-12-2006, 09:25 AM   #27
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Re: Conspicuous Consumption

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Originally Posted by Cut-Throat
So Martha what kind of sports car was it?
I am embarrassed to admit it was a Merker XR4Ti.
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Re: Conspicuous Consumption
Old 08-12-2006, 09:43 AM   #28
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Re: Conspicuous Consumption

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Originally Posted by Scrooge
And then there is the rather unfortunate fact that our hobbies and interests may change over time. The kinds of books that gave me so much pleasure just 10-15 years ago leave me mostly cold now and I am stuck with thousands of them* That's why these days I try to make sure that my hobbies do not result in the accumulation of bulky "stuff" that may turn into dead weight at some point. Thankfully, DVDs take up very little space if you store them right*
That's a really good thing to figure out. I was bad about accumulating stuff and/or for hobbies for a couple of decades. Seemed like a good (and exciting) idea at the time. But it inevitably resulted in a pile of stuff that then got stored in some drawer or corner of a closet or garage, and then lived there for years before I finally admitted that the interest was just not that important to me and that it was highly unlikely that I would never get around to it. When you finally admit that - it can bring serious relief - although it's also very embarrassing.

Wish it hadn't taken me to decades to learn to proceed cautiously when exploring a new interest, and let the interest "prove" it's longevity before spending serious money on it.

When we cleaned out our house getting ready to sell - I had to deal with a huge amount of stuff from discarded hobbies. What a waste! Glad I know better now.

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Re: Conspicuous Consumption
Old 08-12-2006, 11:02 AM   #29
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Re: Conspicuous Consumption

Quote:
Originally Posted by Martha
I am embarrassed to admit it was a Merker XR4Ti.
Ok, that is stretching the definition of "sports car" a little far!
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Re: Conspicuous Consumption
Old 08-12-2006, 11:54 AM   #30
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Re: Conspicuous Consumption

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Originally Posted by audreyh1
Otherwise people tend to behave like a little child who feels "denied" or deprived when he makes a choice.* I suppose this comes from our childhood when someone else made the choices for us and handed out the goodies.* But as adults, we have to manage our own "inner child" and lay out the real tradeoffs that we are making.
That's an interesting point. Remember back when you were a child and adults would tell you that you could do X, Y and Z (make your own decisions, drive, drink alcohol, etc) only "when you grew up"? Well, to a child, "when you grow up" is an eternity away! Similarly, when you are 18, it's hard to imagine that some day you will be 48, 58 or even* (eek!) 78 and you need to plan for it.

In some situations and societies, it may even be rational behavior. Suppose you were born in Germany, China or Russia in 1895.* All three appeared quite stable at the time, each in its own way. And yet over the following 50-75 years you would live through enough wars, revolutions, civil wars, private and state sponsored violence to make any idea of orderly planning and retirement pretty much fanciful.

Even in America, which escaped the worst excesses of the 20th century, there was the Great Depression, which saw many people's hopes of rational retirement planning undermined if not destroyed. I have read some post-Depression letters where the writers scoffed at the very notion of saving money because it could be "gone tomorrow".

Quote:
In other words the thinking is more like - "Gosh, I would love this toy X, but it's really going to cost me Y in terms of consequences".* Then you can make an informed decision as to whether you want to pay that cost.
I have found that my "universal exchange rate" is "extra days at work". If I spend $100, which delays my retirement by a couple of days, is it really worth it? Sometimes it is, but usually it isn't.

Quote:
A lot of people see cost of things only in $$$ terms.* Things often cost a lot more than $$$.* They cost in time, effort, maintenance, space, distraction.* You have to take all of that into account.
Kids who have just graduated from college seem to be particularly bad at it. I remember having a really hard time calculating the total cost of ownership of the house that I was renting in my early 20s. And I thought I was good at math*
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Re: Conspicuous Consumption
Old 08-12-2006, 03:15 PM   #31
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Re: Conspicuous Consumption

When I moved to the Bay Area after college, I realized that with real estate so expensive the true cost of ownership for most items is the space they take up. For instance, I would have liked to buy some huge tower speakers for my stereo, but I calculated that the speakers would need a few square feet of real estate each, and real estate rented for about $10 per square foot per year at the time. So if the speakers would be costing me at least $50 per year just for the space they take up.

And that's just the start, there's also the hassle of protecting them from people running into them, worrying about whether they'll get stolen, adding them to the insurance, paying for depreciation, dealing with girlfriends who think they make my place look tacky :-)

I ended up with smaller "tabletop" speakers for my stereo system.

This kind of analysis is very useful for bulky items... Yes I could buy that piece of exercise equipment I saw on late night TV for only a few $19.99 payments, but storing it might require $200 worth of real estate per year.

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Re: Conspicuous Consumption
Old 08-12-2006, 04:17 PM   #32
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Re: Conspicuous Consumption

Nice to see Rand quoted here ... Dagney was very quotable ... great book, 'Atlas Shrugged'.* Classic read, especially for those looking for the balance between freedom and government.

My wife was always better at LBYM than me, but she trained me, generally.

Now our "excesses" tend to be on eBay, where we're buying kayaks now ... will get two for the price of one.* And, if and when we tire of that sport, we can sell for probably 80% of our investment.* eBay is very helpful for LBYM.* We've bought used books for years, used cars, even used clothing.* It all depreciates very quickly anyway, so where possible, we try to buy low, sell low when it comes to personal property.

I think it was the "Millionaire Next Door" that convinced me that driving an old Ford pickup was a pretty good thing to do ... when someone kids me about it, I just think of how we own it free and clear, and how our portfolio improved because of such decisions.

I think it is ironic that it is often those who can least afford it who tend to go the conspicuous consumption route.
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Re: Conspicuous Consumption
Old 08-12-2006, 05:39 PM   #33
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Re: Conspicuous Consumption

Quote:
Originally Posted by free4now

I ended up with smaller "tabletop" speakers for my stereo system.

This kind of analysis is very useful for bulky items... Yes I could buy that piece of exercise equipment I saw on late night TV for only a few $19.99 payments, but storing it might require $200 worth of real estate per year.

Pardon me for being nitpicky, but wouldn't that only be true for the marginal costs of renting more space? I'm assuming your landlord doesn't have a couple extra sq ft that he can miracle into your appt? I'm assuming you aren't having to rent a whole new appt for your speakers?
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Re: Conspicuous Consumption
Old 08-12-2006, 07:42 PM   #34
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Re: Conspicuous Consumption

Quote:
Pardon me for being nitpicky, but wouldn't that only be true for the marginal costs of renting more space?* I'm assuming your landlord doesn't have a couple extra sq ft that he can miracle into your appt?* I'm assuming you aren't having to rent a whole new appt for your speakers?*
Of course.* The actual real estate expenditures are lumpy and usually get adjusted when you move, remodel, or buy outside storage.

But it would be a serious mistake to think that because the expenses are lumpy they don't count.* That's the same fallacy as "This trip is free because I'm using my frequent flyer miles",* or "Because my car is paid for, insured, and maintained, I only have to pay for gas to drive my car".

If you have more space than you need, then you bought that extra space at some time in the past and the fact that you are only now filling it might be an indication that you have been wastefully underutilizing it for a while in the past.
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Re: Conspicuous Consumption
Old 08-13-2006, 05:23 AM   #35
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Re: Conspicuous Consumption

I've always found that "stuff" that requires skill (sometimes significant skill) has been the most rewarding for me. New gear for my favorite sporting activity (and associated travel) are probably my biggest consumption. It's worthless stuff unless you have (or develop) the skill to get the benefit. I usually don't upgrade until I've developed more skills or worn out the stuff. And I get the exercise-health benefit, always a big plus.


Passive "stuff" always bores me, so it's alot easier to aviod. That is unless I make it active. I have a little sports sedan (WRX). What makes it worthwhile is actively autocrossing (organized racing) and working on it. Otherwise it's a hunk of metal that gets me from A to B.
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Re: Conspicuous Consumption
Old 08-13-2006, 12:08 PM   #36
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Re: Conspicuous Consumption

Quote:
Originally Posted by free4now
...If you have more space than you need, then you bought that extra space at some time in the past and the fact that you are only now filling it might be an indication that you have been wastefully underutilizing it for a while in the past.
Yes we do home swaps with other retirees and one thing they seem to have are the handcuffs that come from having too much space and having it all filled. A mjor barrier to them downsizing is getting rid of all the stuff.

Yet they love our place (a penthouse that we donwsized into). And we even provide them with closet and drawer space that they cannot provide to us when we swap. Fortunately they have spare bedrooms that we can use as walk-in closets.
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Re: Conspicuous Consumption
Old 08-13-2006, 12:36 PM   #37
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Re: Conspicuous Consumption

I think the urge to buy stuff is a lot like an appetite for a particular food. Like French fries. Typically I never eat them and don't have any interest in them. But I notice if I have them a few times in one week I will start craving them. The less I have the less I want.

I used to love to go clothes shopping, and had a hard time limiting my purchases to one or two items, I wanted it ALL. Once I got out of the habit, I completely lost interest. I can walk thru the same department stores and have no interest in the stuff whatsoever. Same with antique malls.

Part of the change in mindset was the conscious goal to FIRE, but even more, I think it was the desire not to be surrounded with more stuff than I need/want/use.

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Re: Conspicuous Consumption
Old 08-13-2006, 12:43 PM   #38
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Re: Conspicuous Consumption

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Originally Posted by Sheryl
I think the urge to buy stuff is a lot like an appetite for a particular food.* Like French fries.* Typically I never eat them and don't have any interest in them.* *But I notice if I have them a few times in one week I will start craving them.* The less I have the less I want.
Good way of putting it. I find the same for me. I used to like going to the antique places and getting a particular type of glassware. It became popular and the prices went way up. I had to stay away from antique places for a long time. Now I can go and I don't get too tempted.

It is harder for food because it isn't so easy to avoid.

Power of habit.
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Re: Conspicuous Consumption
Old 08-13-2006, 02:31 PM   #39
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Re: Conspicuous Consumption

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I used to like going to the antique places and getting a particular type of glassware.* It became popular and the prices went way up.* I had to stay away from antique places for a long time.*
Same with me! I collected Hall China teapots and water pitchers. It was fun for a while to search for them, find a bargain - but when the prices went up to $100 each or more, I quit. When I get some time (like when I finally retire) I will probably sell them on e-bay because I've lost interest in dusting them.
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Re: Conspicuous Consumption
Old 08-13-2006, 03:59 PM   #40
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Re: Conspicuous Consumption

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Just think of all the stuff in the McMansions that won't last as long as the 30 year Mega Mortgage.* The super sized SubZero Stainless side by side and the Industrial strength Mega range with matching pot filling water spout will all be resting in the scrap yard long before the the payments are over.* How many times will the carpeting be replaced while the first piece is still on the books of the 30 and long yardage mortgage?* How many furnaces and ac units and roofs will you have before the first ones are paid for?

Just imagine buying a $250 water tank and paying to have it installed on a 30 year loan!!!!* *

And then you get to pay to have it hauled away.* *
You are so right on point with this UncleHoney... Most people don't know how much a house really costs them in daily living expenses. Challenging the notion of keeping a home is like a sacred cow - to think any other way is considered heresy.

There was a recent Wall Street Journal piece that came to the conclusion that keeping a home up to standards with repairs can easily exceed the initial cost of the home by four times. We wrote a commentary on that for The Motley Fool in July : http://www.retireearlylifestyle.com/cost_of_working.htm

And conspicuous consumption has been bred into us over the years through advertising and creating appetites for things we don't need. We say Retire to Simplicity http://www.retireearlylifestyle.com/...simplicity.htm and reap the rewards in many ways...

Kcowan:
Quote:
A mjor barrier to them downsizing is getting rid of all the stuff.
And it doesn't get any easier... Things seem to collect and pile up even without effort at doing so. Even with periodic cleanings and lettings-go, stuff just seems to want more stuff around it! yikes!

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