Tag: economics

October 2, 2024 – Getting Rich By Acting Poor

October 2, 2024 /

Now that is sensational. I also am not claiming to be getting rich but I am using a technique that rich people use. That would be don’t spend excessively on things that don’t matter. Since getting rid of my Mustang four years ago now, my vehicles keep getting older with more and more miles.

We have kind of poked at replacing the Navigator but the price of newer to new cars has become astronomical. We were thinking something around the Explorer size but going from no car payment to $900/mo for six years seams untenable. So we keep kicking the can knowing that the day will come that we need to bite the bullet and replace at least one vehicle.

Having been an owner of cheap cars, I have developed a philosophy that cheap cars are a good thing. Let’s think about it for a minute. If I paid $1000 for a car and it lasted two months, that would be $500/mo or half of what I would pay for an Explorer. This is not paying for things that do not matter. I am paying for transportation, not style points and that is half the cost of something new.

Of course, at some point having to replace a car every couple of months can be a hassle. That being said, at this price point you can afford to be choosy. So, maybe a $2500 car that lasts a year is really $200/mo. This is a far cry from new car prices. Think about it, all time beyond that is a bonus.

One thing my summer in Portland taught me is that a Navigator L (for long) in the city is a hassle. It is hard to find a parking spot and maneuver in tight spots. My tactic is try to get farther away from the door and hopefully find more open spots. Otherwise, it is multiple back-up, pull forward until I inch into a spot with traffic piling up behind me. But, going farther from the door is hard on the patient that can barely sit in the seat for the ride in the first place. However, you go with what you got.

Since I was under five during the last fuel crisis, the truth is I haven’t paid a whole lot of attention to operating costs. That being said, I won’t deny when you hit the cut-off limit of $125 for fuel it stings a little bit. With only me driving, I typically only had to refuel every two weeks so it was bearable. But, I could do a lot better than 12MPG as well.

About six months ago, my dad called me and said that he was thinking of buying a new car. His reasoning was that he wanted to make sure that he wasn’t stuck with only EV’s as options. He is also 78 so it probably will be his last car. But he asked me if I would be interested in buying his old car. I said sure.

My youngest son is a driver now and so he has taken over my pickup which has been my primary vehicle since I sold the Mustang. My wife just started driving again after stopping at the end of last year. That left us coordinating schedules much more tightly than we have ever done as a couple because we have always had a vehicle per driver. Adding another inexpensive vehicle seems like the right ticket.

It’s not all sunshine and roses because everything has a cost. Just possessing the car has registration, insurance and maintenance costs. So, truly acting poor would be to make due with what we have. I mention this because it should be considered when making this decision. I am still paying something for the privilege of convenience. My hope is that lower operating costs will offset the additional cost of ownership somewhat.

I wont drag out the negotiations and all of that. But, I ended up taking the possession of the vehicle a little over a week ago. I was telling him about my philosophy of cheap cars and he said ‘You agree with Warren Buffet then’. I didn’t know that, but I guess that I do.

End Your Programming Routine: I cant help but throw my opinion in. I think a lot of people are car poor because their image is more important than their budget. I come to this conclusion because I know what cars cost and I also know that our household income is pretty high. I also know that my newest car is 14 years old and has 240,000 miles. Adding an inexpensive car offers more flexibility and will extend the longevity of what we have and no car payment. Me and Warren Buffet agree.

February 23, 2023 – When Cheap is Expensive

February 23, 2023 /

Way back in college, I wanted to purchase a .357 magnum revolver. Things are a little bit different now then they were back then. With the proliferation of plastic frames and Metal Injected Molding (MIM) along with Computer Numeric Controlled machining, some firearms have have gotten a lot cheaper. The truth is, there are a lot of models that can be purchased for less than what I did in the middle 1990s.

I really wanted to purchase a Ruger GP-100 but I was $50 short, so I ended up buying a Rossi M971 for $450 instead of a Ruger at $499. I really have only had two complaints. One is that the same Rugers are selling for $800 now whereas my Rossi is selling for $300-400 used (read bad investment) and the second is that parts and accessories are far and few between.

Recently, I was at the range and the rear sight broke off. I have no idea how that happened. I don’t think it was dropped, I speculate that the plastic just became brittle over time. My replacement is metal, I am hoping that this is the last time it has to be replaced because it may not be replaceable in the future.

Don’t take this as gospel but Rossi is a Brazilian brand. It is now owned by a Brazilian conglomerate Taurus Armas which owns brands like Taurus, Rossi and Heritage. They got their start copying Smith and Wesson and Beretta handguns (originally under license). Once those patents expired and agreements ended, Brazilian copies started appearing in the US markets, hence there are a lot of similarities of a Rossi and a Smith and Wesson revolver.

The reason any of the above is relevant is because about a year after I owned the revolver, my roommate was handling it without my knowledge and dropped it an broke the front sight. At that time, Rossi was it’s own brand and the distributor handled all of the parts. They sent a replacement, free of charge. Since the acquisition, the distributor no longer exists and Taurus USA does not sell parts aftermarket. This would be for a product that they no longer make. In fact, Rossi has become a rifle/shotgun brand only. So, I doubt they have parts in the first place.

But, despite the similarities, there are some differences. I am not going to go into that right now, but what it really means is that aftermarket support is really scarce. For instance, I can find replacement sight blades for Smith and Wesson at $13. I found one local manufacturer base in South Dakota. He was selling a replacement sight at $38 plus shipping and I was happy to pay it.

The way it installs is different too. In the Smith and Wesson it is all largely done with a screwdriver. I needed to purchase a 1mm punch to drive a tiny pin out. This of course cost me $35 dollars. The first time I used it, I broke the drive pin because 1mm is tiny and that metal is hard and therefore brittle. So, I purchased replacement drive pins in a six pack at $15.

What I am getting at here is that I am now $100 and two months into this. I suppose I could have taken it to a gunsmith. I doubt that would have saved me any money, maybe some time. Here again, this is probably a quarter of what the firearm is worth. But without it, it is almost worthless so it has to be done.

If we were talking about a domestic brand like Ruger or Smith and Wesson, first of all this probably would have never happened. But, if it did there are parts available. Gunsmiths can do the work or even the factory. This is the argument for buying the F-150 or the Toyota Camry or the Whirlpool. When there are lots of them made then there is future support likely. Of course there was no way of knowing that the Rossi brand would get scarfed up and discontinued. But initial price and reputation have to play a factor in those types of decisions.

End Your Programming Routine: I am super grateful that Jack First Inc is in business to help keep me going. I am not saying that I was pennywise and pound foolish but had I waited and bought what I really wanted, I don’t know that I would be writing about this subject. I certainly would be happier with my investment value and never wondering what-if. I can’t say that the revolver has ever treated my bad, is inaccurate, not reliable or anything like that. It is just cost a lot of time and money to repair. Maybe this is my foreign sports car?