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Random Thoughts on Various Articles

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I thought I'd try something new and comment on a few articles in one post. The common thread in all this is that I feel a lot of people can learn from them.

JLP asks Who Pays $300 for a purse. From a financial decision, I can't really see it making a lot of sense. However, I realize that to some people $300 is like 30 cents - they just have that much money. One person mentioned that a designer purse is really no different than a $1000 TV or jet ski. My argument is that a $1000 TV typically functions better or has additional features than a $250. Also there's not a $30 jet ski version, unlike the designer purse.

Free Money Finance says that moving can make you rich. I wouldn't argue that point and his math is solid. However, I found that moving to a place with a higher cost of living is making me rich. San Mateo County in CA is supposed more expensive than the Boston suburb I used to live in, but I've found it to not be the case for me. My fiancee's and my salary is significantly more to make up for the cost of living and we have found ways to keep the costs of living the same.

The Frugal Duchess tells us why she doesn't order pasta when she goes out to eat. I can see the logic of not ordering the cheap food and helping out the restaurants high margins. However, she says she likes the experience of being served at a restaurant. Couldn't she enjoy eating out twice as much if she did get the pasta instead of worrying about the restaurant? I'm not so sure that a restaurant really wants you to order the pasta after all. They want to get the most money out of everyone that walks in the door. I think they'll be happy to sell you on a steak that costs them $5 if they can get $10 from you.

Last updated on October 27, 2006.

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4 Responses to “Random Thoughts on Various Articles”

  1. Foobarista says:

    As for location, FMF seems to have a “thing” on that topic. The math is right in a sense, but an implicit assumption behind the “housing math” is “all things being equal”. Salaries are definitely not equal, and lifestyles, amenities, environment, etc obviously vary hugely from place to place.

    For myself, I like being in a tech company where I make a salary in the high hundreds, and also like to be able to spend New Year’s Day on the beach. You likely won’t do either of these in Michigan.

    Also, as you mention, “expensive” places can vary hugely from one to another: housing is expensive in Silicon Valley, but many other things are cheaper. For example utilities are cheaper here because of better weather even if unit prices are often higher.

  2. Thanks, that’s exactly what I’m noticing. We realistically can’t own a home like we’d like here, but we turned our old places into investment properties. We are still in the real estate game and I think, in the long term (30 years or even more), it’s a place I want to be. So we are renting here, but the rent is no more than it was in the suburbs near Boston. So a couple of years ago, I was renting and now I’m still renting, same price, but with a lot more money, fewer utilities (as you mentioned), fewer transportation costs (public transit for my fiancee is paid for by here company), fewer food costs (I get free lunch and dinner if I’m working).

    Really the only downside, and this is a big downside, is that my friends and family are back in the Boston area. Still I view the move out here as temporarily for my fiancee’s next military promotion – at that point we can look to transfer – if I haven’t completely fallen in love with the weather.

  3. Thanks for the mention.
    Give me steak or salmon.I get more for my money. By the way, the restaurant owner used to love pasta orders because of the super-high profit margins.

  4. I have to say it’s tempting to sell 50 cents of pasta for $12. That’s a 2300% profit after cost (not counting overhead and all that), but it’s still only a profit of $11.50. However, if they can get a steak for $6 and sell it at $25 it’s only a 316% profit (if I’m doing my math right here), but it’s a net gain of $19.00 for the restaurant. I don’t know much about the restaurant business and my numbers may have been made up (I’m assuming it’s possible to get a $6 steak in bulk), but I’d rather squeeze $19 out of everyone that walks through the door than $11.50. Maybe the overhead of refridgerating the steak and preparing it cancel out these profits, but I doubt it unless my numbers are way off.

    For what it’s worth, I get the steak almost every time as well. The exception is the Olive Garden where I get the chicken parm, but fill up on the breadsticks and salad. I end up eating most of the chicken parm for two more meals (adding my own pasta and sauce to stretch it as necessary).

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