Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Dont think of price, think of cost per use

sergionajera.com

Post reply on HN
Print view View original

101–110 of 185 posts

Re: Dont think of price, think of cost per use

#101

Post by lbriner »

Tijdreiziger wrote: post #91
ukoki wrote: post #70

Earlier quoted context omitted.

You've perfectly described one half of what makes me uneasy about "boots theory" which is the added risk of making fewer, larger purchases. The other half is that I find that often the more expensive choice does not have as much quality as needed. Boots theory depends on finding product choices where quality (ie durability, ie expected lifetime) increases faster than price. But my personal experience is that quality…

I have heard the advice to ‘buy twice’. The first time you buy a tool (e.g. boots), you’re really just trying it out, so buy a reasonably priced type. If you end up using the tool so often that you want a better one, then go ahead and buy the best type you can afford.

Yes, I was told the same. Lots of us have bought e.g. expensive power tools or electronics gadgets that we have hardly ever used!

Re: Dont think of price, think of cost per use

#102

Post by golemotron »

BeetleB wrote: post #24

This is completely backwards. Always think in absolute dollars and not in rates. $1000 is $1000 whether the cost per use is pennies or tens of dollars. Thinking in terms of rates is how people would fall for predatory installment purchases in the old days (you can have a new computer for just $2.5 a day!) The other obvious problem is looking at cost absent of a market. It's not just how much it is worth it to you, bu…

> Thinking in terms of rates is how people would fall for predatory installment purchases in the old days (you can have a new computer for just $2.5 a day!)

Or SaaS.

Re: Dont think of price, think of cost per use

#103

Post by tallanvor »

BeetleB wrote: post #24

This is completely backwards. Always think in absolute dollars and not in rates. $1000 is $1000 whether the cost per use is pennies or tens of dollars. Thinking in terms of rates is how people would fall for predatory installment purchases in the old days (you can have a new computer for just $2.5 a day!) The other obvious problem is looking at cost absent of a market. It's not just how much it is worth it to you, bu…

It's not backwards, but nothing is black and white.

An example of where looking at the cost per use makes sense is a gym membership. --If I consider the gym is worth, say, $5/visit and it costs $50/month, then I know I have to go at least 10 times a month to feel like I'm getting what I'm paying for.

On the other hand, yeah, my phone is not something that I'm going to try and figure out a cost per use, not the least because each use has a different intrinsic value to me (contacting someone is more valuable than checking the news, at least for me).

Re: Dont think of price, think of cost per use

#104

Post by webjunkie »

kqr wrote: post #87

A related idea is depreciation. You haven't lost $700 by buying a pair of skis. You have exchanged $700 in cash for at least $500 in a pair of skis that is now previously owned. So you might lose, say, $200 immediately for the privilege of buying something brand new. And then another $100 if we include up-front the effort to sell them to someone else. But the rest of the money is still there, in the shape of skis. As…

I like that thinking. It also became clear to me when moving. You can actually sell good furniture that you don't want anymore, and get quite some money back. And if you are considerate in which furniture you buy, you can assume you'll also get money for it, should you not need it anymore. Thus for example, a purchase of a $2000 designer table might not be that huge, if you use it 5 years and get $1500 for it afterwards, you only paid $100 per year to have the table you wanted.

Re: Dont think of price, think of cost per use

#105

Post by kqr »

tallanvor wrote: post #103
BeetleB wrote: post #24

This is completely backwards. Always think in absolute dollars and not in rates. $1000 is $1000 whether the cost per use is pennies or tens of dollars. Thinking in terms of rates is how people would fall for predatory installment purchases in the old days (you can have a new computer for just $2.5 a day!) The other obvious problem is looking at cost absent of a market. It's not just how much it is worth it to you, bu…

It's not backwards, but nothing is black and white. An example of where looking at the cost per use makes sense is a gym membership. --If I consider the gym is worth, say, $5/visit and it costs $50/month, then I know I have to go at least 10 times a month to feel like I'm getting what I'm paying for. On the other hand, yeah, my phone is not something that I'm going to try and figure out a cost per use, not the least…

> then I know I have to go at least 10 times a month to feel like I'm getting what I'm paying for.

This is also dangerously close to going backwards about it. Figuring out how much you need to do something purely to "get your money's worth" out of it is the sunk cost fallacy!

It's better to start from how many times you want to go to the gym, multiply it with your desired cost per visit, and then see if this total exceeds the cost of the membership.

I know that's what you were suggesting, but the way you presented it seems to me, well, backwards!

Re: Dont think of price, think of cost per use

#106

Post by allgreed »

BeetleB wrote: post #66
godelski wrote: post #54

Earlier quoted context omitted.

I don't think you're necessarily disagreeing. There's a factor that neither you nor the author are considering: value/$. Author is implicitly assuming that the higher cost equates to a higher value (clearly this is never a linear relationship). So my friends call me the cheapest person they know, but I also think like the author. If there is something I am going to use a lot and the added value helps me, then I'll sh…

> With your phone, if all you care about is texting and making calls, yeah, you're not getting any added value paying more. If that's all you care about, paying $400 like I do is silly - you can get it much cheaper. The $400 phone I get takes fairly good photos (it's one of my main criteria in deciding on phones). Sure, if I want great photos, I'll have to pay more. I've decided that an extra $1100 over 3 years is no…

I’m not sure I follow your argument about ESPP.

It’s almost always the case that maxing out your ESPP contribution is a good idea instead of getting the money earlier and investing it in something else. It might even be worth getting a loan and still maxing out the contribution should you require more cashflow (because 10% loan is still cheaper than missing out on ~90% return). But the t return is limited to your max contribution percentage * your salary, therefore you still need to think about what to do with rest of your money.

How making more money in absolute terms in some other investment invalidate the above?

Re: Dont think of price, think of cost per use

#107

Post by chiefalchemist »

Helpful. But this mental model can be improved.

A McDonald's meal is an expense.

A mobile device, you can argue, is an investment.

The device can return daily joy*. A meal is, special events with friends aside, a soon forgotten one-off.

* The device can also be a distraction and a time-suck. That needs to be factored in.

Re: Dont think of price, think of cost per use

#110

Post by Tenoke »

lelanthran wrote: post #72
godelski wrote: post #54

Earlier quoted context omitted.

I don't think you're necessarily disagreeing. There's a factor that neither you nor the author are considering: value/$. Author is implicitly assuming that the higher cost equates to a higher value (clearly this is never a linear relationship). So my friends call me the cheapest person they know, but I also think like the author. If there is something I am going to use a lot and the added value helps me, then I'll sh…

> With your phone, if all you care about is texting and making calls, yeah, you're not getting any added value paying more. If all you care about is texting, making calls, playing the occasional game[1], browsing the web, doing mobile banking, listening to music, watching videos, using social media, responding to work emails, viewing the occasional PDF, word processed document or spreadsheet sent over email, screenca…

I read on my phone that has 525 dpi and it seems to make a difference (I only found myself comfortable reading all books on my phone on my previous one which had similar dpi without noticing). Your $400 phone likely has half the dpi, worse screen in general and worse camera for a start. Just because you don't benefit from a better phone it doesn't mean nobody does.

And if you are bringing up games, wordle is an odd choice given that it's among the lightest popular games. My counter example is diablo immortal which just came out and I played some to check it out. I'm not convinced it would run well on your phone.

Post reply on HN