As a generally smart person with disposable income, I am unable to figure out how to find/purchase higher quality products that are not optimized for obsolescence. Increasingly it seems that _everything_ is as cheap as possible: expensive products are not higher quality, but are instead designed to appeal to the premium market segment.
Largely everything has been solved so instead of some ultra expensive coffee maker just buy a Moka pot, and buy old/used stuff. Every 'scene' alive has associated gear, and of that gear, a small fraction is revered by the ultra-nerds. Find the ultra-nerds and follow them. They really don't like when their stuff breaks.
I've bought a ton of old stuff off eBay and similar sites and antique stores especially with this mentality. I can likely toss a grenade into my living room and most of my stuff will survive. I know my WWII sonar recorder will survive.
I bought a BMW 325is from 1988 and I've put well over 150k miles on it since I bought it a few years ago. Nothing leaks, nothing breaks, nothing squeaks, and it still gets 7.5L/100KM. A 36 year old car I got for $7k. One weekend, a Bentley manual, and youtube, and I was able to fix up the throttle body, replace ball joints, update my steering rack, and offset my wheels how I wanted. (On the flip side if I get into a crash I am insta-dead).
Like I wanted good outerwear but as you said, it's all premium market segment stuff without the quality. So I asked my friend who does bike-packing year round and lives outside what he wears and he gave me an entire notebook of gear, prices, longevity, and especially weights. I've had that jacket for 16 years now.
Same with laptops. Cheap modern $500 laptop, or ancient Thinkpad I can upgrade in an evening for $250, that will last me 10x longer? Infinite examples of this.
Had a very similar conversation with a plumber last winter. Pipes exploded because of the cold and flooded the basement. Plumber came over to fix the issue and we talked about the tools while working.
Paraphrased statement was something like "The company that makes these tools could make a high quality product that was rust, corrosion, and abrasion resistant. Except they don't. They make me a cheap wrench, that's planned for obsolescence, and rusts after a few months on the job. The company I work for could buy me a high quality set of tools. Except they don't. They buy me whatever's cheap and don't especially care that they have to buy it again in a year. And then they expect me to go to your house and care."
My dad told me that tools were expensive, and were lucrative targets for theft. I inherited that mentality, but over time I realized that tools had gotten rather cheap. I buy tools from the pawn shop, they're cheap as dirt. For example, I bought an electric chain saw for $10. It works fine. A nice toolbox for $5. I can't see a market for stolen tools these days.
That seems so counterproductive, especially in Formula 1. Isn't the objective to have the least stops in the pit stop area? Have the fewest reasons and the longest lasting tyres so you never need to take a pit stop time penalty?
Joel - it really is a challenge to find high quality products even at high prices. Moreso at high and reasonable prices. I.E. getting your money’s worth. I hate being ripped off and have spent a lot of time researching producers and manufacturers to identify high quality products.
What I’ve found works is to locate special interest forums where experts talk about the best products, and to look for “whole products”. What I mean by that is to find products with as few “processed” or mass manufactured components as possible. Certainly there are exceptions to this, but as an example compare the copper pots and pans made by https://duparquet.com/ with the “ingredients” used on a typical pan you’d find at Wal-Mart.
The 3mm copper pan costs quite a bit but is made with real materials and skilled human labor. (No affiliation)
The Wal-Mart pan is the cheapest “metal” possible sprayed with a chemical coating and some generic styling and branding Homesense or something.
Certainly you can find some more affordable pots and pans with similar features as the website I shared, but you have to be careful.
Almost all electronics will by definition be planned obsolescence. A pan to cook meals? Like cities and good architecture we figured out how to make great pots and pans, knives, and more a long time ago and there isn’t a whole lot left to do.
Unfortunately population growth has led to a need for cheaper and crappier products especially in the west to maintain a perceived level of lifestyle.
Because in a general way you can't say "I want X that will work perfectly until time Y". Instead, Xs are made my a process. That process can cost more or less: more meaning better quality ingredients, higher quality processing, tighter quality controls, whatever. This all yields end results are on a spectrum of quality - a likelihood that the item will last Y time within Z margin of error.
As chain is only as good as its weakest link - many systems will fail with a single broken element. And every time one of those elements breaks, I have a new problem with which to deal. Spend my precious free time figuring out how to do it myself? Try finding someone who will fix it for me, and hope they aren't going to just rip me off?
The example of a home lasting long is especially wild to me. In the US at least, the home is one of the major mechanisms of increasing wealth over lifetime and inter-generational wealth. People frequently buy homes in order to build equity.
Having homes that only last a few decades means that they are worth significantly less, and/or require significant repairs and remodels after relatively short time. I know that when I bought my home, which was made circa 1920, I was really happy that, while old, I could be fairly confident it wasn't about to fall over.
> In the US at least, the home is one of the major mechanisms of increasing wealth over lifetime and inter-generational wealth.
I just don't buy that. Most people who do that seem to ignore the heavy costs of owning a house in the meantime: taxes, repairs, maintenance, insurance, commissions, upgrades, lawn care, pest control, utilities, alarm systems, etc.
I've serially owned houses over the decades. Sometimes I'll look at what I sold them for, when, and compare with their current zillow value. The return on every one is less than if I'd invested the money in the stock market, and that's NOT counting all those major ongoing costs I listed. It's just on the price.
The wealth is also generated by multiplying purchasing power by leveraging against an asset with a mortgage (e.g. when else does a regular person get a $XXXk loan).
Let me put it this way. None of the houses I've bought were bought as an investment. I bought them as places to live in and enjoy. I've lost money on two of them, quite a bit.
Keep in mind that if your house burns down, your generational equity goes up in flames.
The point is that your question should not be "have I made a profit on these houses relative to an index fund" like a speculator.
Your question should be "would I have made a profit on these houses relative to an index fund if I had kept them rented out to tenants 100% of the time at market rates?".
The core to living in a residence you own shouldn't be the asset value, it should be the living. If you're neglecting the market rate for that quality of life in favor of focusing on asset appreciation, you're approaching homeownership in a backwards manner that is ultimately destructive.
I mean, it’s not a foregone conclusion that you’ll do better than otherwise. You could buy when prices are high and sell when prices are low. There is an ongoing calculus also about how long you need to live in a house before you end up saving money; it’s something like, if you sell your house within 5 years buying, assuming prices are equal, you’ll loose money bc of various purchase costs.
I pay less for my mortgage than I did for my apartment, probably approximately 85%. That was last in 2016; in general, I understand that locally rent prices have gone up since then. Of course my mortgage hasn’t, but let’s set that aside. Also, my house is much better than my apartments were, so.
Anyway, the issue is that you have to live somewhere, rent vs mortgage. That’s the difference to consider.
Nothing is a foregone conclusion when investing. And yes, you need a place to live. And the mortgage is only part of your cost to live there, see my previous post.
I just had to fork out a big chunk for a new roof, and another large expense removing a very large tree that decided to lean towards the neighbor's house.
> In the US at least, the home is one of the major mechanisms of increasing wealth over lifetime and inter-generational wealth.
That's mostly because of land values, not building values. And it's largely not a natural occurrence, but it's due to NIMBYism and property tax regimes designed so that young people will pay for all the services used by retirees.
This is wild. If what you said is true, then there would be no appreciable value to be extracted by flippers. Their entire schtick is built around what you are saying being untrue.
I’m sure you have reasons for believing this, but I cannot fathom it.
Put another way, look at what empty lots sell for, and compare that to what a similar lot with a (not dilapidated) house sells for, in areas where the land values would be similar.
The only exceptions I could imagine perhaps being the places with crazy property values. But, the US is large (so, not just San Francisco)
The 'move in' appeal comes into play. While the land/___location may be great - places with the lime green toilet and 70's shag carpet will require renovations to be considered current. The flippers are doing the work - usually the unusually dated bits - for less than what the buyers would think that remodeling would cost. (and they are often correct) That delta is why flippers can make it work. At a certain price point, folks expect a house to be finished.
We picked up a house that needed updates. A few miles from work (were I to drive in) and on a lake. When we looked at the house, it showed terribly. We had replaced our bathrooms and a few other 'major' things in our previous house, so what might scare some folks is a few hundred to a few thousand at home depot and some possibly long weekends. Chunk by chunk, we've been making the house the way we want it.
I should be doing some drywall this long weekend. Way to dang cold to go out and pick up supplies.
I'm happy to believe that flippers are mostly deluding themselves.
> Put another way, look at what empty lots sell for, and compare that to what a similar lot with a (not dilapidated) house sells for, in areas where the land values would be similar.
Interesting. I can’t speak to how it works in other countries; in the USA so much context is loaded into home ownership. I don’t know the Japanese “sticks and carrots”.
The one factor I could imagine is if cost of land is so expensive that anyone who could afford it is going to be wanting to do a ton of customization anyway.
Are you talking about rural Japan, not just e.g. Tokyo? What systems exist in Japan that make the building worthless?
That's not by definition, although it is how social security works.
Retirees have assets but not income (or they have low income). Younger people are the other way round. So depending on how governments use income taxes vs sales taxes vs property taxes it changes who pays for things.
California is the worst about this because of Prop 13, which basically means if you don't move then your property tax is much lower than it should be and newer residents pay for you.
Who else would pay for retirees, if not the non-retirees?
Most of their assets are paper value, because they are located in stocks, their only home (and they have to live somewhere), etc… that if sold en masse would simply get pennies on the dollar or require expenditures elsewhere.
For the same reason I want a cast iron skillet to last. Why would I buy cheap garbage cookware and throw it in the dump every few years when a nice dutch oven, skillet, stainless steep pans (etc.) will last me for life and be nicer to use?
Given that I myself bought a house built in 1900 with original wood floors and loved it, I don't think it's unrealistic for someone thirty years from now to want the same. Our needs are unlikely to have changed much... if they don't want it, they can sell it or tear it down. That's up to them!
Why wouldnt you want a house that lasts? It will retain value better, require less maintanance, and yeah, maybe you want to pass it on to future generations. Makes sense to me
As a generally smart person with disposable income, I am unable to figure out how to find/purchase higher quality products that are not optimized for obsolescence. Increasingly it seems that _everything_ is as cheap as possible: expensive products are not higher quality, but are instead designed to appeal to the premium market segment.