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This quote gets posted over and over ad nauseum on reddit and HackerNews and always seems to just get accepted as truth, but realistically the entire theory dep

This quote gets posted over and over ad nauseum on reddit and HackerNews and always seems to just get accepted as truth, but realistically the entire theory depends on the relative numbers between the two things being compared. The theory makes no sense if good boots cost 5x as much as shitty boots but only last 2x as long. If the cost of most things depended only on quality then I'd find it more convincing, but especially when we're talking about consumer electronics, things like brand reputation, novelty, and user perception matter a lot.

shados 9y ago
A rich person can buy the cheap option. A poor person usually cannot buy the expensive option. Of course the rule doesn't apply to everything, but it applies to "enough". Buying a house is often much better financially than renting (in high cost of living areas, usually by a factor) Hardwood furniture can last several generations. Plywood stuff...not so much. Mutual funds have much lower fees if you invest a larger amount of money. Banks and credit unions give you more, cheaper services if you have more money. Borrowing money is cheaper the better off you are. You can get a better job if you can afford to be on the market for longer. And so on, and so forth. There are exceptions (my cheap ikea couch has lasted 10-15 years, while a fancy hardwood table we got started falling apart after just a few years), but you just have more options if you can afford more expensive stuff. Some of those options are vastly more cost-effective. Being poor is very expensive.
- meow1032 9y ago
  If the point of the quote is to say that "sometimes the more expensive option is better value" it's accurate, but also is obvious, and doesn't really mean anything. To be clear, I don't think it's strictly wrong, just that it adds nothing of value to a conversation. It just gives a very specific example of when a rule holds. It's kind of like if the employment statistics come out, and they show improvement, but someone comments that they just got laid off that week. They aren't wrong, but they're also not adding anything to the conversation.
  - nothrabannosir 9y ago
    > If the point of the quote is to say that "sometimes the more expensive option is better value" it's accurate, but also is obvious, and doesn't really mean anything. That is not the point, and the comment you’re replying to gave some very real, serious examples as to why not. Cost of living alone eats an incredible amount of your budget unless you’re very well to do, so there, immediately, you’re out of “sometimes” territory. We’re already in “the majority of most people’s budget” land. Then you have payday loans, any kind of loan in general, late fees, etc: all of these are costs to low liquidity. Unexpected expenses cannot be absorbed if you have no cash nor assets to sell. Being poor is expensive; this is not a random anecdote, it’s a fundamental character flaw in our society that has been consistently identified and documented. Google “the cost of being poor” for more reading material than one could process in a lifetime. If you’re talking about the specific example in the quote, alone: it’s an illustration, to make a complex and ugly point understandable and palatable and easy to digest. It’s not a random data point: it illustrates the mechanism by which being poor is expensive. That’s not straight forward to intuit, hence this example has merit.
    - ekianjo 9y ago
      > Cost of living alone eats an incredible amount of your budget unless you’re very well to do, this has not been true for a long time by now. If it were true there would be no mass market for tourism and no budget for so many people to buy iphones every year or two. By far we all earn way more than what we strictly need to live, even in your first jobs in your twenties.
      - kiliantics 9y ago
        You've obviously never had to work at somewhere like Walmart
        ekianjo 9y ago
        is walmart representative of 75 percent of jobs out there?
- zeth___ 9y ago
  >Buying a house is often much better financially than renting (in high cost of living areas, usually by a factor) Not any more, especially in the global cities. You are better off investing your money on the stock market.
  - shados 9y ago
    If I had the choice between no housing whatsoever and stock market, sure. Unfortunately being homeless kind of sucks so the choice is between being and renting. The former is cheaper if only because I don't have to deal with massive rent increases every year. I literally bought my place because I was about to get priced out of the city by my landlord.it took only 2 years for an equivalent unit in an equivalent location to cost me less (including mortage, taxes, maintenance, HOA) than the unit I was renting now goes for.
    - zeth___ 9y ago
      Sorry, can you clarify what you mean? I don't understand what you mean by "cost me less"?
      - PJDK 9y ago
        Not the OP, but mortgage payments will stay fixed over time (assuming interest rates stay the same). Rents increase with demand for housing. Having also recently bought a house, my repayments are comparable to rent, and double up as an investment.
      - shados 9y ago
        I literally mean "cost me less" (the numbers below are bogus but the proportions are correct, just so people who know me don't get too much insight into my finances, haha) When I last rented (in a very high cost of living area), my rent was 2500 and I was faced with a 300/month increase on the renewal of my lease. I bought a place in an area that is roughly an (almost) as high in demand. Much nicer, 3 times the size. The mortgage was 2000/month. Add taxes and HoA and It's about 3000/month. There is some maintenance and I have to pay for my own repair, so my housing budget is about 3500 a month. That was several years ago. I can look up the listing for the apartment I used to rent (large building, lots of units on the same floor with the same plan and they have a website). It hovers between 3000 and 3500/month these days. Except I can deduct about $5000/year in taxes from my mortgage interest and the property taxes (though starting this year I won't be able to do the later anymore because of caps). And on that 3500/month I pay for housing, about $1500ish goes in principal. So effectively, the place costs me about 1500-1600/month. Add that property value is up drastically in the area over the last few years, and I'm living here somewhere between "for free" and "at a profit". That's a heck of a lot cheaper than renting. There was the matter of the downpayment. I got pretty lucky in some of my stock investments, but the above is hard to beat (and the only reason I have so much money to invest IS because of how much cheaper my housing is now compared to what it would be). Oh, the condo association is letting me stick a solar array on the roof, which is also a fine investment even with the new tariffs. Landlord wouldn't have allowed it. If I ever need to leave or cash in, I can flip the place on the market in a day (well, plus like a month for the closing I guess). I can rent it too for a sweet added profit. All in all, renting is expensive as hell.
- fingerlocks 9y ago
  Just a nitpick, but I think you meant particle board instead of plywood. High quality plywood is composed of several thin sheets of hardwood in which the grain of each runs perpendicular to it’s neighbor. This makes is stronger than pure hardwood with far less warping and cupping over time.
  - shados 9y ago
    Yeah, As you can tell I'm no woodworker :)
- aaronblohowiak 9y ago
  Plywood stuff can last. particleboard on the other hand..
Can_Not 9y ago
You raise a good point, but I'd say the problem is that determining if the more expensive one is _actually_ better is really difficult, there's lots of marketing blurring everything, even going so far as fake reviews, shill comments, etc. You thought you found a quality product but Walmart (or the brand owner, or the brand's new parent company) decided to use cheaper materials to increase margins (possibly even once per year!). The source of trustworthy reviews yesterday somehow "monetized" itself into giving outstanding 5 star reviews quoting phrases like "buy for life", "it's worth spending extra for the quality" when it's literally the same unfit for use garbage you can get unbranded for dirt cheap on a Chinese clone of Amazon. Counterfeit goods on Amazon is already a big problem. Most likely, the person who can afford the pricier boots and tells you they last longer than yours just needs to use them less, but justifies his decision because it was actually true back in his father's day. Economic inequality is a huge issue right now, sure. But information assymetry is also doing a lot of damage. I can get a spec sheet on 2 motherboards and get about all the information I need from them for a purchasing decision. You can't do that with boots at Walmart in this scenario.

shados 9y ago

A rich person can buy the cheap option. A poor person usually cannot buy the expensive option. Of course the rule doesn't apply to everything, but it applies to "enough". Buying a house is often much better financially than renting (in high cost of living areas, usually by a factor) Hardwood furniture can last several generations. Plywood stuff...not so much. Mutual funds have much lower fees if you invest a larger amount of money. Banks and credit unions give you more, cheaper services if you have more money. Borrowing money is cheaper the better off you are. You can get a better job if you can afford to be on the market for longer. And so on, and so forth. There are exceptions (my cheap ikea couch has lasted 10-15 years, while a fancy hardwood table we got started falling apart after just a few years), but you just have more options if you can afford more expensive stuff. Some of those options are vastly more cost-effective. Being poor is very expensive.

meow1032 9y ago
If the point of the quote is to say that "sometimes the more expensive option is better value" it's accurate, but also is obvious, and doesn't really mean anything. To be clear, I don't think it's strictly wrong, just that it adds nothing of value to a conversation. It just gives a very specific example of when a rule holds. It's kind of like if the employment statistics come out, and they show improvement, but someone comments that they just got laid off that week. They aren't wrong, but they're also not adding anything to the conversation.
- nothrabannosir 9y ago
  > If the point of the quote is to say that "sometimes the more expensive option is better value" it's accurate, but also is obvious, and doesn't really mean anything. That is not the point, and the comment you’re replying to gave some very real, serious examples as to why not. Cost of living alone eats an incredible amount of your budget unless you’re very well to do, so there, immediately, you’re out of “sometimes” territory. We’re already in “the majority of most people’s budget” land. Then you have payday loans, any kind of loan in general, late fees, etc: all of these are costs to low liquidity. Unexpected expenses cannot be absorbed if you have no cash nor assets to sell. Being poor is expensive; this is not a random anecdote, it’s a fundamental character flaw in our society that has been consistently identified and documented. Google “the cost of being poor” for more reading material than one could process in a lifetime. If you’re talking about the specific example in the quote, alone: it’s an illustration, to make a complex and ugly point understandable and palatable and easy to digest. It’s not a random data point: it illustrates the mechanism by which being poor is expensive. That’s not straight forward to intuit, hence this example has merit.
  - ekianjo 9y ago
    > Cost of living alone eats an incredible amount of your budget unless you’re very well to do, this has not been true for a long time by now. If it were true there would be no mass market for tourism and no budget for so many people to buy iphones every year or two. By far we all earn way more than what we strictly need to live, even in your first jobs in your twenties.
    - kiliantics 9y ago
      You've obviously never had to work at somewhere like Walmart
      - ekianjo 9y ago
        is walmart representative of 75 percent of jobs out there?
zeth___ 9y ago
>Buying a house is often much better financially than renting (in high cost of living areas, usually by a factor) Not any more, especially in the global cities. You are better off investing your money on the stock market.
- shados 9y ago
  If I had the choice between no housing whatsoever and stock market, sure. Unfortunately being homeless kind of sucks so the choice is between being and renting. The former is cheaper if only because I don't have to deal with massive rent increases every year. I literally bought my place because I was about to get priced out of the city by my landlord.it took only 2 years for an equivalent unit in an equivalent location to cost me less (including mortage, taxes, maintenance, HOA) than the unit I was renting now goes for.
  - zeth___ 9y ago
    Sorry, can you clarify what you mean? I don't understand what you mean by "cost me less"?
    - PJDK 9y ago
      Not the OP, but mortgage payments will stay fixed over time (assuming interest rates stay the same). Rents increase with demand for housing. Having also recently bought a house, my repayments are comparable to rent, and double up as an investment.
    - shados 9y ago
      I literally mean "cost me less" (the numbers below are bogus but the proportions are correct, just so people who know me don't get too much insight into my finances, haha) When I last rented (in a very high cost of living area), my rent was 2500 and I was faced with a 300/month increase on the renewal of my lease. I bought a place in an area that is roughly an (almost) as high in demand. Much nicer, 3 times the size. The mortgage was 2000/month. Add taxes and HoA and It's about 3000/month. There is some maintenance and I have to pay for my own repair, so my housing budget is about 3500 a month. That was several years ago. I can look up the listing for the apartment I used to rent (large building, lots of units on the same floor with the same plan and they have a website). It hovers between 3000 and 3500/month these days. Except I can deduct about $5000/year in taxes from my mortgage interest and the property taxes (though starting this year I won't be able to do the later anymore because of caps). And on that 3500/month I pay for housing, about $1500ish goes in principal. So effectively, the place costs me about 1500-1600/month. Add that property value is up drastically in the area over the last few years, and I'm living here somewhere between "for free" and "at a profit". That's a heck of a lot cheaper than renting. There was the matter of the downpayment. I got pretty lucky in some of my stock investments, but the above is hard to beat (and the only reason I have so much money to invest IS because of how much cheaper my housing is now compared to what it would be). Oh, the condo association is letting me stick a solar array on the roof, which is also a fine investment even with the new tariffs. Landlord wouldn't have allowed it. If I ever need to leave or cash in, I can flip the place on the market in a day (well, plus like a month for the closing I guess). I can rent it too for a sweet added profit. All in all, renting is expensive as hell.
fingerlocks 9y ago
Just a nitpick, but I think you meant particle board instead of plywood. High quality plywood is composed of several thin sheets of hardwood in which the grain of each runs perpendicular to it’s neighbor. This makes is stronger than pure hardwood with far less warping and cupping over time.
- shados 9y ago
  Yeah, As you can tell I'm no woodworker :)
aaronblohowiak 9y ago
Plywood stuff can last. particleboard on the other hand..

Can_Not 9y ago

You raise a good point, but I'd say the problem is that determining if the more expensive one is _actually_ better is really difficult, there's lots of marketing blurring everything, even going so far as fake reviews, shill comments, etc. You thought you found a quality product but Walmart (or the brand owner, or the brand's new parent company) decided to use cheaper materials to increase margins (possibly even once per year!). The source of trustworthy reviews yesterday somehow "monetized" itself into giving outstanding 5 star reviews quoting phrases like "buy for life", "it's worth spending extra for the quality" when it's literally the same unfit for use garbage you can get unbranded for dirt cheap on a Chinese clone of Amazon. Counterfeit goods on Amazon is already a big problem. Most likely, the person who can afford the pricier boots and tells you they last longer than yours just needs to use them less, but justifies his decision because it was actually true back in his father's day. Economic inequality is a huge issue right now, sure. But information assymetry is also doing a lot of damage. I can get a spec sheet on 2 motherboards and get about all the information I need from them for a purchasing decision. You can't do that with boots at Walmart in this scenario.