Posted by Dave on July 27, 2010
In the past couple of weeks, I have had a couple of discussions related to “things” my wife and I were looking into buying. In both cases, the question of the purchase came down to the question of function versus form of the thing we are looking at.
The first item we were looking into buying was a charcoal barbeque. We decided to purchase a simple Weber model that had a 22” grill that cost $120. It came with a 2-year warranty and reviews on it were highly positive from what I could see. Prior to purchasing it though, I noticed a smaller portable grill that cost $30 that I asked my wife if she would think about buying – turns out she was not a fan at all. I asked her why, and she stated that it would be ridiculous to have to be squatting down to cook on the grill and would just look silly. My question to her was basically whether the meat that we wanted to eat (cooked on a barbeque) would still end up cooked, which it obviously would – for $30 compared to $120.
We ended up buying the larger, more expensive model mainly because it would be inconvenient to cook for a larger group of people on the smaller, cheaper barbeque – which is probably when we would use it the most.
In the same vain, we are looking for a freezer to put the half of a cow we recently bought and will be ready by the end of the summer. We need about a 9 cubic foot freezer to accommodate the cow, as well as the pig that I want to buy at some future point. There have been several of these listed on kijiji at approximately $50 – $100 depending on the listing (tax free). A new model will end up costing $400 plus taxes. Initially, my wife (who seems like she is being picked on here, but as always is the one that I have these kind of discussions with) was against getting such an appliance, as a 5 or 10 year old freezer does not look as nice as a new one, and it would be going into our basement living area rather than a dusty corner somewhere. [Editor's Note: Another consideration is the amount of energy a new one would use vs the old one. Don't save cash up front to pay it out in a lifetime of energy costs.]
In this situation, I think we will end up buying used. A freezer is a very simple appliance, and a new one is not significantly more efficient than a used one – we could buy 4 used freezers for the same price as a new one. To make it look nicer, or more fun we’ll probably paint it with chalk-board paint, which would allow my wife to draw all over it (which is something she enjoys doing).
Those are two situations where the alternative would do exactly the same thing as a newer, more expensive model and cost significantly less. I think at least keeping an alternative in mind can allow for significant savings on purchases, rather than just going out and buying the shiny new thing. Obviously, neither one of these purchases are life or death in nature (both are what I would classify as luxuries) but do stand as an example of looking for something that carries out the same function that you’re looking to carry out.
Do you have any examples where you found a cheaper alternative? Did it work out, or do you wish you would have gotten the exact thing you initially wanted?
Posted by Robert on July 26, 2010
Although I’m a stockbroker, I don’t think everyone should invest in the stock market. There is no “one size fits all” solution to invest for the future. But I have noticed one thing in common among successful investors: they own what they know.
An entrepreneur owns her business. She works in her business, she understands her business and she has control over her business. If she wants a better return, she can change her strategy, hire different people or increase her offerings. She will have a reasonably good idea of the value of her business and she’ll be willing to sell only for a fair price. Otherwise, she won’t worry about the price people are willing to pay to buy her business, because she’ll be focused on earning a profit.
A stock market investor owns stocks. He knows how to read companies’ financial reports, he knows what common indicators to look for and he knows how to question management. He is comfortable owning a variety of businesses and he probably has a good idea of the value of each. He is unlikely to panic and sell his shares during a crash and unlikely to overpay during a bubble, because he understands each one.
A real estate investor owns real property. Whether she’s a real estate agent or a landlord or a developer, she is familiar with the local market for real estate. She understands what people value and what they don’t, she understands the difficulties of buying, selling and renting and she’s willing to borrow large amounts of money to make a profit in the real estate market. She’ll have clear ideas about the value of her properties, and she will only be willing to make a deal that seems reasonable to her.
A collector has knowledge about certain items. Whether it’s sports cards, coins, stamps, old cars, art or anything else, he understands the rarity and value of certain objects. He also knows who else is in the market and is able to buy and sell profitably.
It is possible to profit by buying, owning and selling a variety of things. People who have little or no knowledge are less likely to profit. People who have no knowledge at all should “invest” in safe vehicles such as GICs, savings accounts and savings bonds. This way, they are guaranteed a return with certainty and don’t risk losing money by making a mistake. Then, little by little, the saver can learn about and start investing in one area. As their knowledge and confidence grow, it makes sense to allocate more and more capital away from savings toward investment.
What do you know about? How does it affect your investing?
Posted by Canadian Dream on July 23, 2010
With summer time here I’m spending a lot more time outdoors with my kids, so I thought I would share some of our favourite afternoons of fun which don’t have to cost a lot.
- The Park – My kids are currently obsessed with going to the local school play structure so we have been going at least a few times a week. We often just walk over take a drink and snack and spend a hour or two playing games like tag or how far can you go and not touch the ground. Cost $0. Cheap Add On: Slurpee run – walk to your local 7-11 or other store and pick up a treat/drink on the way home for $5 to $10.
- The Library – This is a weekly event in our house. Often I drive over since we often do this with other errands, but sometimes we walk as well. Beyond picking up our holds we also pick out a few movies for the kids, read a few books, take out a few books, play with the toys at the library and then play at the park located outside. Then come home and immediately put a movie in for the kids to watch. Cost $0. Cheap Add On: Pick up some ice cream from the grocery store $3 to $5 or 40 Timbits for $5.
- Water Fun – Now this one can be done in several grades depending on the effort/money you want to put into it. Option a) Running around in the sprinkler at home. Who knew watering the lawn can actually be fun? Cost $0. Option b) Hit up the local spray park and run around. Cost $0. Option c) Hit up the local outdoor/indoor pool. Cost $11 (at least around here).
- Museums/Galleries/Science Centers – Playing tourist in your own backyard can be fun and my kids love to see new things, so this makes for a great afternoon event for us. Cost Free to $30 depending on which one you go see.
- The Lake – Find a friend/family member with a cabin and get a invite out for the afternoon or the weekend. Be sure to ask to see if they need anything and be prepared to help out with chores. We do this fairly often over the summer as my parents literally live at the lake for the summer so if we want to get a visit in we often need to go see them. Cost $40 to $100 or more (depends on gas, what you bring out: food & drinks, etc).
So what do you do for fun over the summer? If you have an idea please share.
