When delving into a new endeavor (house owner, car, sport, computer, … ) it is often recommended to buy a “beginner” version or a “starter unit”. The idea, as it goes, is to see if one is “really” into this new activity before committing a lot of money. Now, ab initio this sounds a good idea, except that it is an expensive thing regardless. There should be better ways to figure this out. The best way I have found is to start with units that cost time or commitment rather than money.
For instance, it very common to decide to get in shape and then order/buy some (cheap) exercise gadget. However, poor equipment rarely brings satisfaction. Instead what I do is to set a trigger in the form of commitment. For exercise, I would say, do not buy anything until you can run 5k straight, do 10 pull ups or 20 push ups or whatever you consider reasonable. This should be something that will take a month’s work to accomplish. After that point I would say commitment has been demonstrated and a purchase can be made.
At this point I would buy the best equipment I could ever see myself using. For instance, with the bicycle, there would be little difference for me between buying a $3000 bike and a $1500 bike. Even if I had a million bucks, I would not have the skills and strength to take advantage of the $3000 bike. The difference between a $750 bike and a $1500 bike would be equipment limited though. Therefore I would get the $1500 bike as the first bike although if you are only going to use it sporadically, I would consider needs vs wants and go a cheaper one, like this $1.38 mountain bike.
This avoids the upgrade malaise as there is no need to replace existing equipment with something better. It is simply not possible when you already own the best. This strategy has saved my thousands. Yes, so I’m wearing shoes that cost more than $200. However, these are very old shoes, so annual costs are closer to $20. Also, 10 year old $200 shoes look better than new $20 shoes any day.
It takes quite a while to replace one’s possessions with the best. Money has to be saved and also one has to wait until the old things wear out (or maybe that’s just me). After a decade, though, one will end up with a collection of really nice stuff.
There is less use of resources which is an added benefit.
Even better, should one decide to sell it, it tends to have a fairly high used price. For the very best, the used price is actually higher than the new price for a corresponding new item. This is true for HiFi equipment for instance.
See also “on minimizing depreciation expenses”
Much thanks goes to CR and GH for the donations!
Originally posted 2008-07-27 15:23:40.