Comments on: Exercise for the reader http://earlyretirementextreme.com/2007/12/exercise-for-the-reader.html Financial independence, frugality, self-sufficiency, ecology, capitalism, and voluntary simplicity Fri, 21 Nov 2008 18:59:14 +0000 http://wordpress.org/?v=2.6.3 By: Jacob http://earlyretirementextreme.com/2007/12/exercise-for-the-reader.html#comment-7 Jacob Thu, 13 Dec 2007 15:30:00 +0000 http://earlyretirementextreme.com/2007/12/exercise-for-the-reader.html#comment-7 Yes, it assumes constant rates of lifelong consumption. If that does not hold, it becomes much more tricky. However, you can average over longer periods. Suppose you only eat ice cream in the summer. Then take the cost of that ice cream and divide it by a year. Then apply the formula. Yes, it assumes constant rates of lifelong consumption. If that does not hold, it becomes much more tricky. However, you can average over longer periods. Suppose you only eat ice cream in the summer. Then take the cost of that ice cream and divide it by a year. Then apply the formula.

]]> By: Benjamin http://earlyretirementextreme.com/2007/12/exercise-for-the-reader.html#comment-6 Benjamin Thu, 13 Dec 2007 06:30:00 +0000 http://earlyretirementextreme.com/2007/12/exercise-for-the-reader.html#comment-6 The problem here is that you assume constant rates of consumption (if indeed a hypothetical lifelong subscription to the good were offered.) <br/><br/>If, however, it is simply a way to make one see how long a given good at a certain price point must last (e.g. I want to buy this single malt that costs $$$, if I plan to consume it in 30 days, the lifelong subscription cost according to this formula is not something I would buy into. But if it lasts 60 days...), then it's indeed an interesting consideration. The problem here is that you assume constant rates of consumption (if indeed a hypothetical lifelong subscription to the good were offered.)

If, however, it is simply a way to make one see how long a given good at a certain price point must last (e.g. I want to buy this single malt that costs $$$, if I plan to consume it in 30 days, the lifelong subscription cost according to this formula is not something I would buy into. But if it lasts 60 days…), then it’s indeed an interesting consideration.

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