One financial lesson they should teach in school is that most of the things we buy have to be paid for twice. There’s the first price, usually paid in dollars, just to gain possession of the desired thing, whatever it is: a book, a budgeting app, a unicycle, a bundle of kale. But then, in order to make use of the thing, you must also pay a second price. This is the effort and initiative required to gain its benefits, and it can be much higher than the first price.
My Steam library says hello…
I don’t know if this is to mean you only paid for your games once, or if you’re like me and have a ton of older games you bought again to have on Steam because they don’t even have CD-Keys to be added manually from an original purchase (like Doom 1995).
I took it to mean that they’re like me and buy a bunch of games but never put in the time to play most of them.
You paid half price! Nice!
I feel like there’s a lot more to this than “pay it twice”. If you’re talking purely in dollars, then you’ll want to consider maintenance and upkeep over the expected lifetime of the object and compare that to alternatives. Additionally, everything has an opportunity cost because no resource is limitless and you could have allocated it elsewhere. Finally, emotional and other intangible benefits are something that most people have a very difficult time quantifying.
If you want to say “consider more than just the purchase price” then I’m with you.
That’s a great point, although I think the opportunity cost can be considered as part of the first and second payments the article talks about.
Maintenance is a third cost, I’d agree. The minimalist community likes to talk about the idea that your belongings own you.
Hello there, and welcome to our community! I hope you like it in here.
Could you please include some body text as to why should people know this, and how would that help them? It’s our second rule. Thank you :)
Example?
I can buy as many books as I want but it doesn’t do me much good unless I invest time to actually read them
I don’t love this example because enjoyment of the object isn’t really a cost. If I buy a book or a videogame or a movie, the time it takes to enjoy the media is the value, not the cost.
If you’re talking about maintenance and upkeep on your car, that is a different type of cost that has to be weighed against the cost and time expenditure of a bus pass or whatever your alternative was.
In other words I feel like this is a catchy phrase that kind of falls apart once you start to dig at it.
Exactly. It’s a deepity.
I can see the phrase working if we talk about the entire chain from production to end consumer. I go to the store, I buy something. The store had to also buy that thing so they could sell it to me. Right there, it was already paid for twice. Just not by the same person/entity.
Anecdote: As a younger adult, I amassed a decent library of books, and at the time I felt it was worth the ongoing “cost” (and, for that time, it was). As an older adult though, having had to move this collection from house to house several times, I’m very much feeling that secondary cost to the point it’s starting to not feel worth it for me to keep them.
I haven’t gotten rid of any books yet, but I’ve stopped buying new books and I’ve been going to the library instead. That way, I get all the benefit of the book without any of the space/weight considerations.
Not OP but my example would be the last 2 books I bought. They are still sitting unread and I have not gotten the full value out if them yet as I haven’t taken the time to consume them. Also education, I paid tuition and now I am working to keep my grades up so I can get the value from that.
I really don’t think everything is this way. I buy a shirt, I put it on. Not much to invest there.
But some things are definitely this way as anyone who has brought Ikea furniture home can tell you.
If shirts were single-use items, I would agree. But I would say you pay every time you wash and iron it, and put it back to wear again.
I think everything is this way for sure. Certain things take up less space (mental or physical) but everything you own does take some sort of ongoing effort to maintain.
In the example of a shirt, there’s washing it, but there’s also simply storing it. In most cases, the effort and space a shirt takes is far outweighed by the benefit, but if you don’t wear a particular shirt then it becomes a burden simply to keep it stored. This is most noticeably felt when moving to a new house.
You can buy cheap shoes and save money, but you’re going to pay for it when they fall apart fast and your feet hurt.
You can save money and eat fast food, but you pay for it with your health.
You can save up and get the nicer car, and you pay less for it in the long run with upkeep.
You can save up and get the nicer car, and you pay less for it in the long run with upkeep
Unless it’s a Mercedes
BMW maintenance is a nightmare too.
Not saying I necessarily agree with this sentiment for “everything”, but from a purely monetary point of view, here’s a few example that I assume follow the spirit of this line of thinking:
- Cars; you must pay for maintenance & fuels
- Homes; you must pay for upkeep & utilities
- Computers; electricity costs, and you could even go so far as to say the software you use
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This is a fascinating and enlightening perspective, thank you for sharing.
Good point. I didn’t think long term enough.
How about a bag of chips or a cigar?
The second price of eating junk food that isn’t great for you long term and tobacco is carcinogenic so your second price is death.
The price for each of that is a tiny chip of your health.
