CPU will make your wallet fatter. and it's got nothing to do with computers.

As the weekend approaches and a weekend of glee is upon us, I want to share a cautionary tale on shopping.

Read this cracker. 10 xbox games sitting idle is the same as not going for a weekend holiday to Hawaii. I'm not kidding. Intuitively you and I would rather have a weekend in Hawaii lazing on a beach than a pile of unused stuff, but realistically, we all have a pile of stuff somewhere, and it comes from our relationship with buying stuff.

I use a simple concept when I buy new things. Cost Per Use. CPU. To justify a purchase to own something, the CPU has to approach zero. I like to use my things so much that by the time it's broken, given away or sold that it's pretty much cost nothing per use. Here are some examples:

Clothes - I hate unused clothes, every piece of clothing I own must have a cost per wear approaching zero. So if I buy a $200 jacket it better be lasting at least 20 years. That's a long time for a jacket to last. Alot of my clothes end up being of a multi use or utilitarian nature. It makes you think twice about buying that really nice shirt when the cost per use is in the hundreds of dollars. More if it's on credit.

Video Games - I abhor owning video games. Counter intuitive for a gamer like myself? Well it isn't. In the gaming industry there is a term called an 'attach rate' which is the number of games sold for every console. For the console to be worth losing money on (and Sony and Microsoft are losing money on every console sold) there needs to be a correspondingly high 'attach rate'

What this means is that consoles are great value for money, but games aren't. So owning games I don't play has never made sense to me. I only ever have one or two games at a time, and once I'm done with them, they're off to Ebay. The loss I make between purchase and sale is my cost for having played it for however long, and the cost per use generally starts to approach zero (because I used to game a lot).

Why CPU rocks.

CPU changes our behaviour towards purchasing stuff, it's not about owning stuff anymore, it's about use and enjoyment. I don't mind paying $7 to rent a dvd rather than pay $29 to own it outright, because the utility I get out of a dvd, is the one night watching it. I'd love to find a person with a large library of dvds that has watched them all twice.

One of the biggest paradigm shifts for me was over my ownership of books. Cost per use for most of my books is the cover price, which is ludicrous, $30 to read something once? I now use the library, why buy when I can borrow, and my cost per use hits a whopping free.

It also turns decisions into no brainers when it comes to experience. The thing with experience, whether it's exotic holidays or deep learning, is it's in constant use while you are paying for it. That 30 euro a kilo fiorentina steak, in Florence, cooked rare in front of me, in a crowded trattoria... worth every penny.

So next time you look at something you just must have. Take 10 seconds, ask yourself... what's the real cost per use? And if it is really valuable, spend with all your ability and happiness!

Have a great weekend!

Flickr cred: John Pannell

Comments

[Misa]

This is why I'm willing to pay for Netflix and Paperspine (if you haven't heard of this last one, it is a book rental service, very much like Netflix for books). My CPU for both of these is probably less than a buck. If went by my hourly use? WAAAAAY less than a buck. Whereas if I spent the same money buying a book or a DVD... well, how many times am I REALLY going to watch it? Not many.

[john from Nifty News & Decent Deals (decentdeals.net)]

I agree completely on CPU. I also like factoring in my Cost Per Hour. A video game might be pricey at $50, but if I get 50+ hours into it then the enjoyment price is practically free. They could have charged me $200 for The Orange Box (PC) and I'd still come out ahead right now.

You make an equally valid point on renting games - so far I have 7-10 Wii games that I bought because they were "cheap." I never play them. That's just expensive clutter. Apart from the upcoming Mario Kart, my plan is to rent all Wii games first. That includes No More Heroes and Brawl.

-John
Nifty News & Decent Deals

[Richard Yong]

Hi A.J.

That's a really great idea. I'm in Australia and have only just started seeing 'RedRoom' DVD vending machines, Netflix is also trying to start up here.

I also really like the book ideas as well I'll check out worldcat.org, I'm already finding books that I want to read, almost 90% aren't at my local library. I'm considering joining up with the state library which is massive, or as an alumni member at my old university. Another good resource when it comes to buying books you want to keep forever, but not in a library is in digital pdf/reader versions from the Ebook websites out there.

Cheers,

Richard

[A.J.]

Great advice. If you want to save money even further on DVDs, go to RedBoxes. They're in a ton of grocery stores, and if you're like most people and watch it the same night you rent it, assuming you return it the next day, it only costs $1. The selection isn't as great, but it has almost all new DVDs, so there's always something good to watch.
And if they don't have the book you want at the library, there's two things you can do. First, try worldcat.org to find another library that has it. Or, instead of buying it new, try Amazon.com, where you can get a cheaper used version 99% of the time.