Economics done wrong - or: how we save money at the wrong end

[Zwiebelchen]

I just had this discussion with a friend of mine, about how he always buys the discounter products at the grocery store and the clothes he wears, but then invests only in the most expensive of electronics.

How do you guys feel about this? Isn't it weird that people usually try to save money in all the wrong places and then throw money out nonsensical at products they are likely not to keep very long?

I can't understand how people can walk into an IKEA or furniture shop and then buy the cheapest bed they offer. I can't understand how people can buy eggs from battery farming, when certified Bio eggs are only 50 cent more a box, but will drive by car to the college that is only half a mile away instead of cycling. I can't understand how people can invest thousands of dollars into super expensive cat-food, but mostly eat junkfood themselves all day.


Is it just me, or is mankind not setting their priorities right?
Let's take the bed example. How can anyone in their right mind not invest into a high quality mattress? The differences are huge (seriously; go to a mattress store and compare a 50$ mat to a 500$ mat if you never did that before. You can thank me later). And yet people seem to mostly save their money on it. We are spending one third of our life in bed. Isn't it worth investing into a good nights sleep?
Isn't it worth investing a little bit more into quality clothes without hazardous dyes or good shoes that are good for your feet? You are wearing clothes all day, it's worth it for health reasons alone.
Isn't it worth investing into Bio-food if you can afford a new flatscreen TV? Keep in mind that even discount T-shirts are sold at a big profit margin. By buying discount items at unreasonably low prices, you are supporting modern slavery, environmental damage, health damage and unethical loans.


Get your priorities right, folks!

 

[Zombie]

It's because people purchase stuff based on product marketing and social recognition.

 

[Zwiebelchen]

It's because people purchase stuff based on product marketing and social recognition.

Then again sanity is what sets us apart from animals. There are a lot of educated people that should know better and yet won't.

 

[Zombie]

Then again sanity is what sets us apart from animals. There are a lot of educated people that should know better and yet won't.

Too bad modern libero-individualism doesn't exactly teach us we're supposed to behave any differently from animals. A property companies very much benefit from and like to exploit.

 

[Mechanical Man]

That 50 cents can be a big difference. 50 cents here, 50 cents there, you can easily save 50 euros a month this way. If you have like 300 euros of budget that can be huge. Those are consumable products and you cannot afford to buy them expensive. While more permanent things like electronic can be worth investing more, because they are also most likely to last longer if you spend more.

If you don't have 500€ currently and you need bed/mattress asap, that 50€ is better than nothing still.

 

[Nuclear]

Get your priorities right, folks!

Your friend has the right priorities, electronics come first.

 

[Zwiebelchen]

That 50 cents can be a big difference. 50 cents here, 50 cents there, you can easily save 50 euros a month this way. If you have like 300 euros of budget that can be huge. Those are consumable products and you cannot afford to buy them expensive. While more permanent things like electronic can be worth investing more, because they are also most likely to last longer if you spend more.

If you don't have 500€ currently and you need bed/mattress asap, that 50€ is better than nothing still.

I'm not really talking about people that simply can't afford any big investment. I'm more talking about the double-standards here, especially from those that could afford the extra 50 cents a week for bio eggs.

There is a somewhat fucked up definition of value deeply anchored in our minds. Luxury is good. Anything that is for fullfilling the primary human needs isn't. Food, sleep, health... I don't understand how anyone can consider these as disposable and always go for the bare minimum.
More than just once I've seen people running around with a brand new iPhone, despite being unemployed. And then they start to complain about how they aren't able to afford quality food and have to go for discounter meat. Something is terribly wrong here in terms of priorities.

 

[Mechanical Man]

Maybe they got that iPhone as a gift from someone, I doubt he just spent 700€ for it, although if he keeps it for 5 years may be even okay. Even I spent 700€ on new computer while being unemployed, but I don't regret it.

 

[Dr Super Good]

Most people in the UK buy everything on credit.

 

[Chaosy]

If I buy a uncomfortable bed it'll be harder to oversleep. I call it life hack.

OT: I am kinda like your friend. I usually buy the cheapest stuff unless we're talking about stuff that I actually want, even if I need clothes, it's not something I want to spend money at. If I can find a plain-black T-shirt for 6$ than I am buying it rather than spending it on some semi-expensive T-shirt because of the producer being famous or because it has some fancy print.

I buy the cheapest bed too, mainly because I don't need a royal bed that costs 500$. I can sleep on the sofa or on a mattress without any problems at all so I don't bother to buy a expansive one.

 

[Zwiebelchen]

If I buy a uncomfortable bed it'll be harder to oversleep. I call it life hack.

OT: I am kinda like your friend. I usually buy the cheapest stuff unless we're talking about stuff that I actually want, even if I need clothes, it's not something I want to spend money at. If I can find a plain-black T-shirt for 6$ than I am buying it rather than spending it on some semi-expensive T-shirt because of the producer being famous or because it has some fancy print.

I buy the cheapest bed too, mainly because I don't need a royal bed that costs 500$. I can sleep on the sofa or on a mattress without any problems at all so I don't bother to buy a expansive one.

I'm not talking about buying expensive brand products. I'm talking about the often neglected middleground that usually offers the best value to money ratio.

People seem to go for extremes when it comes to money. They either buy the most expensive stuff, or the cheapest stuff depending on their view of importance.
What they mostly never do, however, is buying good value for money, supporting a reasonable industry that is not exploiting their employees or jeopardizing health and environment through exceptional cost pressure. Do you know how much of that 6 dollar T-shirt actually go to the factory workers and cotton farmers? I'll tell you: 1%. That's 6 cent. Split through multiple people involved in the process.
http://www.statista.com/statistics/271981/percentage-of-earnings-from-t-shirt-sales/
75% of the 6 dollars are marketing and retail cuts. The extreme price discount does not come from the retailer. It comes from minimum wages, exploitation and unecological cotton farming.

There is scientific evidence that a high quality mattress does wonders for your health (especially for your back) and sleep depth. Sleep depth is actually an often neglected part by many people. You can sleep for 1-2 hours less a day and still feel way more rested if you have proper sleep depth.

 

[Chaosy]

I'm not talking about buying expensive brand products.

I figured it was more or less the same on the topic that you pay the least possible. Beds are more expensive depending on the producer too, even if it might not be on the same scale as clothes and cars.

What they mostly never do, however, is buying good value for money, supporting a reasonable industry that is not exploiting their employees or jeopardizing health and environment through exceptional cost pressure. Do you know how much of that 6 dollar T-shirt actually go to the factory workers and cotton farmers? I'll tell you: 1%. That's 6 cent. Split through multiple people involved in the process.

Most people don't seem to care about those who they don't know. Not really our business to do so either.

Even if you feel like you want to support all those people in the poor countries, get realistic even if you donated every single dollar you earned for a year you would would help 0.0001 of those in trouble. Likely it's just momentary help too, like allowing them to buy more food for a little while.

I know I am sadly egoistic :-/

 

[Mechanical Man]

It's not that expensive price means the workers work in better conditions. It could mean just the retailer just gets more money. iPhone is a good example.

 

[Deathcom3s]

Opportunity cost, my dear friend.

What benefit is really gained by spending .50 cents more on a can of food?

Now, what happens when you skimp on electronics and purchase some cheap knock off? It usually doesn't work, or work properly, and the money is subsequently wasted. Might as well spend more money on something that will last longer, than spend less money on something that will die much faster and need to be replaced. In the end, you were better off buying the better product.

But yes, a lot of people have very screwed up priorities. This can be explained by the luxury cars in trailer parks. They live in a dump, but at least they drive to their crappy 9 to 5 day job in a luxury car, right? Absolutely silly, in my opinion.

 

[Mechanical Man]

The car is perfect thing to show your status. Things like clothes or watch aren't that important, because there are many similar products, which are indistinguishable from original product, while a house, which is even expensive, you can't show it when you are around, while with the car you can cruise around and show yourself. In these cases, first impression is everything, most people judge from first impression and cars give it best.

 

[GhostWolf]

OP is based on the assumption that something that costs more is better, that's not a good start.

 

[Orcnet]

It depends on the person's salary or how the person manages to control the usage of money, let's say if he's rich or has enough investment then why not purchase retail items? and why not stop there? he can also purchase cheap or discounted products to invest more from others.

 

[Zwiebelchen]

OP is based on the assumption that something that costs more is better, that's not a good start.

If you think that is the message, you have probably came to the wrong assumption.