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Owning nothing is now a luxury, thanks to a number of subscription startups

nytimes.com

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Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#71

Post by baroffoos »

JMTQp8lwXL wrote: post #68
lscharen wrote: post #20

“It is quite likely that, when you lived in America, you leased everything. You never owned anything, but someone else did and you had to pay for every single thing you used. That's another form of resource ownership that concentrates wealth.” — Manna, Chapter 5 — https://marshallbrain.com/manna1.htm

I'm still not convinced this is good for companies. They think everyone will stick around and keeping paying, unwavering loyalty month-after-month, when in reality, many people cancelled their HBO subscription after Game of Thrones was over. It doesn't really solve the volatility problem for business income. When the next downturn hits, guess what will be the first thing to go? Frivolous subscriptions.

Maybe this is why they are moving to subscription furniture. You may be quick to cut your movie subscription but not your bed or fridge subscription.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#72

Post by tracer4201 »

JMTQp8lwXL wrote: post #68
lscharen wrote: post #20

“It is quite likely that, when you lived in America, you leased everything. You never owned anything, but someone else did and you had to pay for every single thing you used. That's another form of resource ownership that concentrates wealth.” — Manna, Chapter 5 — https://marshallbrain.com/manna1.htm

I'm still not convinced this is good for companies. They think everyone will stick around and keeping paying, unwavering loyalty month-after-month, when in reality, many people cancelled their HBO subscription after Game of Thrones was over. It doesn't really solve the volatility problem for business income. When the next downturn hits, guess what will be the first thing to go? Frivolous subscriptions.

We watched Chernobyl after GoT and then cancelled.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#73

Post by fromthestart »

JMTQp8lwXL wrote: post #69
apatters wrote: post #58

Earlier quoted context omitted.

Renting things is a financial tool and it can save you money. The calculation is simple. You estimate the difference between how much something costs and how much you can sell it for once you're done using it. That's your real cost to own it. Compare that number to the cost of renting it for the same time period. If the cost to rent is lower, renting is a better deal. For larger and more involved transactions (especi…

In an efficient market, shouldn't the cost to own and cost to rent be roughly the same? Otherwise, everyone would rush to the clearly cheaper option.

No, because of the time value of money. Money now is worth more than money later. Having all of your toys today vs saving for a couple years to buy a home. [1] has a somewhat explanation but the same conclusion.

1. https://www.investopedia.com/terms/t/timevalueofmoney.asp

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#74

Post by adrianN »

JMTQp8lwXL wrote: post #69
apatters wrote: post #58

Earlier quoted context omitted.

Renting things is a financial tool and it can save you money. The calculation is simple. You estimate the difference between how much something costs and how much you can sell it for once you're done using it. That's your real cost to own it. Compare that number to the cost of renting it for the same time period. If the cost to rent is lower, renting is a better deal. For larger and more involved transactions (especi…

In an efficient market, shouldn't the cost to own and cost to rent be roughly the same? Otherwise, everyone would rush to the clearly cheaper option.

I think most markets are not efficient in that sense because people don't have perfect information and are not perfectly rational.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#75

Post by cs02rm0 »

JMTQp8lwXL wrote: post #69
apatters wrote: post #58

Earlier quoted context omitted.

Renting things is a financial tool and it can save you money. The calculation is simple. You estimate the difference between how much something costs and how much you can sell it for once you're done using it. That's your real cost to own it. Compare that number to the cost of renting it for the same time period. If the cost to rent is lower, renting is a better deal. For larger and more involved transactions (especi…

In an efficient market, shouldn't the cost to own and cost to rent be roughly the same? Otherwise, everyone would rush to the clearly cheaper option.

Logically yes I think it would be close, depending on how you objectively define close. Humans aren't always logical though and that low monthly repayment without requiring you to save up can look really tempting.

At least with something desirable like a car, where some parts of the world have seen a significant shift towards renting.

No idea how well it works for beds, but it wouldn't surprise me if there's margin there too.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#76

Post by lotsofpulp »

baroffoos wrote: post #39
dawhizkid wrote: post #37

Earlier quoted context omitted.

Well most of these companies are startups, not megacorps. Just like everything you should do the math...if you only plan to live in a city or apartment for 1-2 years then renting a furnished apartment (either officially furnished or DIY with one of these startups) could make sense. The alternative in my experience is buying a lot of cheap Ikea furniture that's a pain to buy/put together/toss that may or may not come…

This article pushes the idea that this is not just for people planing to leave soon but for anyone who wants to live the luxury life which is just ridiculous. Also megacorps have been pushing for this as well, for example the trend to pay a huge monthly fee for your phone and plan which forces you to essentially buy a new phone every 2 years.

What definition of “force” are you using? What is stopping someone from finishing paying the monthly cost of the phone after 2 years and then not signing a new contract to lease a new phone?

Every single mobile provider in the US makes it clear how much mobile service is if you want to pay for just the mobile network, or to lease the phone and the mobile network. Apple offers a monthly payment plan that is equivalent in cost to paying upfront for the same phone and AppleCare+.

All of the information is clearly available for the lease vs pay upfront, and mobile network vs mobile network + phone calculation.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#77

Post by adrianN »

Bombthecat wrote: post #47
chrisco255 wrote: post #26

Renting an apartment vs owning a house is not necessarily a bad financial move. Depends on a number of factors. For instance, if you anticipate moving within a certain time frame, between closing costs, mortgage fees, commission, etc...it can cost more to own in the first 3-5 years, especially if prices are stagnant. Also, there are hidden costs of home ownership not necessarily factored in for, like repairs, mainten…

Especially in Germany, where there is a new law coming out every five to ten years where you need to isolate your house or build solar or replace your old gas heater etc etc etc. Its all in the name of environment protection. But makes owning a house more of a risk then anything else..

I wish such laws existed in Germany, but I never heard of them. It's still legal to build new houses that depend on fossil fuel for heating and are poorly insulated, even though we need to become carbon neutral in the next fifteen to twenty years if we want to stay below 2° of warming. The Denkmalschutzbehörde can still prevent you from upgrading your windows and adding insulation to your home.

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#79

Post by yibg »

bitcoinmoney wrote: post #32
pembrook wrote: post #11

Earlier quoted context omitted.

Or on the flipside, I've got some contractor/consulting buddies who regularly pull down $200/hr bouncing between Tech companies in the Bay Area and Seattle and big banks in NYC. Not owning anything allows you to go where the work is and keep your net worth in assets that produce actual income (like index funds and bonds), instead of sitting around collecting unemployment during a dry spell because you're encumbered b…

400k/year doing what?

There are lots of stories (and also some info) on engineers working at FAANG making ~$400k a year or up. Granted these are not your typical engineering jobs, but they do exist and in not so insignificant numbers; say it's 1% of engineers (made up number).

I am curious though as to the distribution of freelance / contract rates. Is $200 / hour also 1% of engineers? More? Less? Financially for the same person what's actually a better route? For someone that can get $400k a year at google, is that better or worse than the contract route on average?

Re: Owning nothing is now a luxury, thanks to a number of subscription startups

#80

Post by JMTQp8lwXL »

baroffoos wrote: post #71
JMTQp8lwXL wrote: post #68

Earlier quoted context omitted.

I'm still not convinced this is good for companies. They think everyone will stick around and keeping paying, unwavering loyalty month-after-month, when in reality, many people cancelled their HBO subscription after Game of Thrones was over. It doesn't really solve the volatility problem for business income. When the next downturn hits, guess what will be the first thing to go? Frivolous subscriptions.

Maybe this is why they are moving to subscription furniture. You may be quick to cut your movie subscription but not your bed or fridge subscription.

I'm sure businesses will experiment with renting all sort of things and see what sticks. The market for less serious rentals (such as entertainment) is probably much bigger than furniture.

Knowing I'm renting a sofa, and that if I spill something on it, I'd be responsible sounds far too stressful (maybe I'm not, but I'd have to find the answer to that). Also, do they deliver and pick up the furniture when I'm done with it? Do I pay extra for that? I have questions about the model. Consumers tend to steer away from things they can't understand.

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