Author Topic: Overheard at Work  (Read 13252488 times)

russianswinga

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Re: Overheard at Work
« Reply #19000 on: November 03, 2017, 05:28:44 PM »
(The idea of paying $450k for a house makes my skin crawl.)

The idea of paying $450k for a house sounds amazing.

Truer words were never spoken. We have slightly outgrown our two-bedroom condo, it is currently worth $340K (likely more since we completely remodeled it, doing most work ourselves)
Mainly, I'm now getting remote work opportunities and could really use a home office (an extra bedroom) in addition to our current two.
3bd condos are $4-500K, houses 5-600K, this is a 45 min commute from work.
Within 15 minutes of work, houses start at $1 million for a 1960's fixer upper with the same livable area as my condo. That's southern California for you!

I guess I'll put in a desk in the master bedroom and make that my office.
« Last Edit: November 03, 2017, 05:31:13 PM by russianswinga »

RidetheRain

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Re: Overheard at Work
« Reply #19001 on: November 03, 2017, 05:38:29 PM »
My coworker (early 20s) told me today that's she's going on a road trip with some friends for the next few days. I asked her where she was going/ where she's staying etc. They are planning to tour small towns in the southwest US but haven't booked hotels. I asked why since you can often get deals online expecting her to tell me that they were going to decide based on when they were tired of driving. Turns out she hasn't booked anything because she only stays in hotels that cost >$100/night and sometimes it's hard to find one.

It's like she's afraid of getting a deal. Small towns are going to be cheaper, right?

mustachepungoeshere

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Re: Overheard at Work
« Reply #19002 on: November 03, 2017, 08:13:32 PM »
Colleagues started complaining yesterday about how much they're spending on food.

One got Uber Eats six out of seven nights this week.

The other beat that - Uber Eats seven out of seven, and said it's $60-$70 a night for her family of four. :o

zolotiyeruki

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Re: Overheard at Work
« Reply #19003 on: November 03, 2017, 10:11:10 PM »
The other beat that - Uber Eats seven out of seven, and said it's $60-$70 a night for her family of four. :o
So $420-490/week just on dinners!?  Holy smokes, we feed our family of eight three meals a day for half that!

mustachepungoeshere

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Re: Overheard at Work
« Reply #19004 on: November 03, 2017, 11:05:18 PM »
The other beat that - Uber Eats seven out of seven, and said it's $60-$70 a night for her family of four. :o
So $420-490/week just on dinners!?  Holy smokes, we feed our family of eight three meals a day for half that!

Her head would explode if I told her that.

My colleague also buys lunch and coffee every day.

The one who "only" had Uber Eats for dinner six nights in a week buys breakfast and lunch every day, and recently said she's looking forward to Christmas holidays because she spends less money when she doesn't have to come to work.

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Re: Overheard at Work
« Reply #19005 on: November 04, 2017, 12:00:10 AM »
My coworker (early 20s) told me today that's she's going on a road trip with some friends for the next few days. I asked her where she was going/ where she's staying etc. They are planning to tour small towns in the southwest US but haven't booked hotels. I asked why since you can often get deals online expecting her to tell me that they were going to decide based on when they were tired of driving. Turns out she hasn't booked anything because she only stays in hotels that cost >$100/night and sometimes it's hard to find one.

It's like she's afraid of getting a deal. Small towns are going to be cheaper, right?

It also sounds like your coworker is intentionally paying the last minute rate for the same room and believing it is a better product. While confining yourself to the rooms that no-one else has wanted to book yet.  A Veblen hotel room.

CW on Monday: Hotel ABC's most expensive room is $80, must be shit.
CW on Tuesday: Hotel ABC's most expensive room is now $120, must be great.

Could you suggest that there is an exchange rate for southwest small towns?

Freedomin5

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Re: Overheard at Work
« Reply #19006 on: November 04, 2017, 12:47:04 AM »
I was chatting with a coworker today about retiring early. Her response: "But that's such a waste of your degree since you worked so hard for it! You should at least work twenty years for it to be worth it!"

In my mind, I was thinking, "But that would be such a waste of my life!"  Basically, her point was that because I worked so hard and so long to get the degree, I should work even harder and longer to make use of it. I don't know, something just doesn't compute here.

Actually, if you do the math, the sticker price of my degree(s) was $100,000 (before factoring in scholarships and assistantships). My first full-time job after graduation (which I got solely because of my degree) had an annual salary of ~$130,000. So really, I broke even after one year of work, which means I only had to work one year for my degree to be "worth it". My breakeven point is actually quite a bit lower because I had scholarships. Obviously, hers is not the metric by which I measure how long I should be working.

shelivesthedream

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Re: Overheard at Work
« Reply #19007 on: November 04, 2017, 05:49:28 AM »
My coworker (early 20s) told me today that's she's going on a road trip with some friends for the next few days. I asked her where she was going/ where she's staying etc. They are planning to tour small towns in the southwest US but haven't booked hotels. I asked why since you can often get deals online expecting her to tell me that they were going to decide based on when they were tired of driving. Turns out she hasn't booked anything because she only stays in hotels that cost >$100/night and sometimes it's hard to find one.

It's like she's afraid of getting a deal. Small towns are going to be cheaper, right?

It also sounds like your coworker is intentionally paying the last minute rate for the same room and believing it is a better product. While confining yourself to the rooms that no-one else has wanted to book yet.  A Veblen hotel room.

CW on Monday: Hotel ABC's most expensive room is $80, must be shit.
CW on Tuesday: Hotel ABC's most expensive room is now $120, must be great.

Could you suggest that there is an exchange rate for southwest small towns?

Agreed. I read that and thought that it's one thing to insist on only staying in hotels with certain features (pool, minibar, nice restaurant... whatever else it is that hotels have that makes them fancy), but quite another to insist on paying a certain amount. What if they got to a Premier Inn and paid $100 for a $25 room? Would that make it better? My minimum hotel standard is a private bathroom. That can be found in hotels across the entire price range. I'm not going to pay £100/night when I can find a hotel that's £50/night that fits my requirements.

LennStar

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Re: Overheard at Work
« Reply #19008 on: November 04, 2017, 05:58:49 AM »
My coworker (early 20s) told me today that's she's going on a road trip with some friends for the next few days. I asked her where she was going/ where she's staying etc. They are planning to tour small towns in the southwest US but haven't booked hotels. I asked why since you can often get deals online expecting her to tell me that they were going to decide based on when they were tired of driving. Turns out she hasn't booked anything because she only stays in hotels that cost >$100/night and sometimes it's hard to find one.

It's like she's afraid of getting a deal. Small towns are going to be cheaper, right?

I don't think you will be able to find a "hotel" in a "western" country (or anywhere were death from starvations isn't normal) that hasn't got that.

What I find strange with all the "star" rating is that the TV size and type and number of chanels plays such a big role.
I mean yes, if I am there on business and all alone I might watch TV every evening to relax from work, but do I need 200 chanels on an XXL TV for that?
It also sounds like your coworker is intentionally paying the last minute rate for the same room and believing it is a better product. While confining yourself to the rooms that no-one else has wanted to book yet.  A Veblen hotel room.

CW on Monday: Hotel ABC's most expensive room is $80, must be shit.
CW on Tuesday: Hotel ABC's most expensive room is now $120, must be great.

Could you suggest that there is an exchange rate for southwest small towns?

Agreed. I read that and thought that it's one thing to insist on only staying in hotels with certain features (pool, minibar, nice restaurant... whatever else it is that hotels have that makes them fancy), but quite another to insist on paying a certain amount. What if they got to a Premier Inn and paid $100 for a $25 room? Would that make it better? My minimum hotel standard is a private bathroom. That can be found in hotels across the entire price range. I'm not going to pay £100/night when I can find a hotel that's £50/night that fits my requirements.

ACyclist

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Re: Overheard at Work
« Reply #19009 on: November 04, 2017, 09:16:11 AM »
Co-worker travels to Europe every year.  He has an impressive looking passport.  He constantly gives me crap about not being well traveled.  I've only been to a 3 foreign countries.  I do travel a ton, but it is camp style trips so I can bike. We have an older travel trailer. He also looks down his nose at me, as I am not highly educated.  My job is an office worker.  He has a Ph.D.

Recently, he overshared about his financial position. He is in debt up to his eyeballs with student debt, home debt, and credit card debt.  Over the years, I have tried to gently mention that spending less is a way to less stress and a shorter working life. He said his student loans are at high interest, his loan is a 30 yr, and that he may be losing his job soon.  .

Meanwhile, after his admission, he still shows to work with a Grande Starbucks cup in his hand, and food from fast food places. His wife doesn't work, doesn't make him lunch, and isn't looking for gainful employment to improve their situation.  His eldest is in college, and his youngest is a teen. 

Can't help but see flaws in his planning and problem solving.

Helvegen

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Re: Overheard at Work
« Reply #19010 on: November 04, 2017, 09:51:00 AM »
Meanwhile, after his admission, he still shows to work with a Grande Starbucks cup in his hand, and food from fast food places. His wife doesn't work, doesn't make him lunch, and isn't looking for gainful employment to improve their situation.  His eldest is in college, and his youngest is a teen. 

Can't help but see flaws in his planning and problem solving.

Seems like the least she could do. I WOH FT and it takes me about 30-40 minutes on a Sunday to make a bunch of freezer sandwiches for the week for husband and daughter. Just grab one out of the freezer and throw in the lunch box with some mostly prepackaged side items and fruit. I'll play devil's advocate a second and wonder if she didn't do it at one point or make the suggestion and he just either didn't eat them in favor of getting something out at work or ignored her about it. Regardless, she should have some awareness of their financial situation and how much risk it is to live on one income with lots of debt and no budget. Does she just sit on the couch all day with her fingers in her ears about it or what? Seems pretty ridiculous. I am all for SAH if you can afford it and/or there is some serious reason why you should (lack of (affordable) childcare, disability, etc). Neither seems to be the case here.

I can't imagine having a kid in college and still trying to pay off my own student debt. Let me guess, he is paying for his kid's college too?

marty998

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Re: Overheard at Work
« Reply #19011 on: November 04, 2017, 04:27:19 PM »
The other beat that - Uber Eats seven out of seven, and said it's $60-$70 a night for her family of four. :o
So $420-490/week just on dinners!?  Holy smokes, we feed our family of eight three meals a day for half that!

Her head would explode if I told her that.

My colleague also buys lunch and coffee every day.

The one who "only" had Uber Eats for dinner six nights in a week buys breakfast and lunch every day, and recently said she's looking forward to Christmas holidays because she spends less money when she doesn't have to come to work.

Hmm... wonder what happens when the delivery drivers screw up the orders...? Colleague of mine and I were working back late, we are entitled to order dinner after a certain time and he wanted to demonstrate how the delivery works through the app.

The guy couldn't find our office, and when we ran down the the street to the next block to find him (following his GPS location on the app), he handed over 2 burger and fries orders...without the burgers!

Needless to say I was not impressed

mustachepungoeshere

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Re: Overheard at Work
« Reply #19012 on: November 04, 2017, 04:30:42 PM »
The other beat that - Uber Eats seven out of seven, and said it's $60-$70 a night for her family of four. :o
So $420-490/week just on dinners!?  Holy smokes, we feed our family of eight three meals a day for half that!

Her head would explode if I told her that.

My colleague also buys lunch and coffee every day.

The one who "only" had Uber Eats for dinner six nights in a week buys breakfast and lunch every day, and recently said she's looking forward to Christmas holidays because she spends less money when she doesn't have to come to work.

Hmm... wonder what happens when the delivery drivers screw up the orders...? Colleague of mine and I were working back late, we are entitled to order dinner after a certain time and he wanted to demonstrate how the delivery works through the app.

The guy couldn't find our office, and when we ran down the the street to the next block to find him (following his GPS location on the app), he handed over 2 burger and fries orders...without the burgers!

Needless to say I was not impressed

:o

What happened? Is it a battle to get a refund?

And poor you. Fries aren't much of a dinner.

shanghaiMMM

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Re: Overheard at Work
« Reply #19013 on: November 06, 2017, 04:57:10 AM »

Actually, if you do the math, the sticker price of my degree(s) was $100,000 (before factoring in scholarships and assistantships). My first full-time job after graduation (which I got solely because of my degree) had an annual salary of ~$130,000. So really, I broke even after one year of work, which means I only had to work one year for my degree to be "worth it". My breakeven point is actually quite a bit lower because I had scholarships. Obviously, hers is not the metric by which I measure how long I should be working.

Two questions.

1) $130,000 straight out of university?! Holy crap. I just think that doesn't happen in the UK. Nice work!

2) What are you doing in China if you don't mind me asking?

Comar

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Re: Overheard at Work
« Reply #19014 on: November 06, 2017, 08:59:12 AM »
I have a samsung s4 phone that doesn't charge the battery anymore. Phone is old but works fine aside from the battery problem. Luckily my sister gave me her own s4 when she upgraded hers but the screen on that one is broken. So I use that phone as a charger and just switch the batteries when the one on my s4 is depleted. A little strange I know but really not a problem.

I'm switching batteries at work today and my coworker asks what I'm doing. I explain and jokingly add I'm also a cheap bastard. She looks at me sad and says "no I know you just don't have any money. People don't do this to save money they do it because they don't have any. Young people today just don't have any money (I'm 32 she is 67) everything is so expensive especially with kids (I have two boys). I bet you don't have a single isk saved. Not one." She seemed really worried about me. I just said "oh really?" and changed the subject.

ketchup

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Re: Overheard at Work
« Reply #19015 on: November 06, 2017, 09:01:38 AM »
I have a samsung s4 phone that doesn't charge the battery anymore. Phone is old but works fine aside from the battery problem. Luckily my sister gave me her own s4 when she upgraded hers but the screen on that one is broken. So I use that phone as a charger and just switch the batteries when the one on my s4 is depleted. A little strange I know but really not a problem.

I'm switching batteries at work today and my coworker asks what I'm doing. I explain and jokingly add I'm also a cheap bastard. She looks at me sad and says "no I know you just don't have any money. People don't do this to save money they do it because they don't have any. Young people today just don't have any money (I'm 32 she is 67) everything is so expensive especially with kids (I have two boys). I bet you don't have a single isk saved. Not one." She seemed really worried about me. I just said "oh really?" and changed the subject.
Yeesh.  Rude much?

MgoSam

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Re: Overheard at Work
« Reply #19016 on: November 06, 2017, 09:28:39 AM »
I have a samsung s4 phone that doesn't charge the battery anymore. Phone is old but works fine aside from the battery problem. Luckily my sister gave me her own s4 when she upgraded hers but the screen on that one is broken. So I use that phone as a charger and just switch the batteries when the one on my s4 is depleted. A little strange I know but really not a problem.

I'm switching batteries at work today and my coworker asks what I'm doing. I explain and jokingly add I'm also a cheap bastard. She looks at me sad and says "no I know you just don't have any money. People don't do this to save money they do it because they don't have any. Young people today just don't have any money (I'm 32 she is 67) everything is so expensive especially with kids (I have two boys). I bet you don't have a single isk saved. Not one." She seemed really worried about me. I just said "oh really?" and changed the subject.
Yeesh.  Rude much?

In a way I wish that your coworker was right. I've seen things that people do to save money when they are flat out broke and sadly I don't see many people in my age group doing them. If you clean to be broke you shouldn't be going out for drinks each weekend, nor should you be going out to eat multiple times a week and many more things.

ketchup

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Re: Overheard at Work
« Reply #19017 on: November 06, 2017, 09:43:05 AM »
I have a samsung s4 phone that doesn't charge the battery anymore. Phone is old but works fine aside from the battery problem. Luckily my sister gave me her own s4 when she upgraded hers but the screen on that one is broken. So I use that phone as a charger and just switch the batteries when the one on my s4 is depleted. A little strange I know but really not a problem.

I'm switching batteries at work today and my coworker asks what I'm doing. I explain and jokingly add I'm also a cheap bastard. She looks at me sad and says "no I know you just don't have any money. People don't do this to save money they do it because they don't have any. Young people today just don't have any money (I'm 32 she is 67) everything is so expensive especially with kids (I have two boys). I bet you don't have a single isk saved. Not one." She seemed really worried about me. I just said "oh really?" and changed the subject.
Yeesh.  Rude much?

In a way I wish that your coworker was right. I've seen things that people do to save money when they are flat out broke and sadly I don't see many people in my age group doing them. If you clean to be broke you shouldn't be going out for drinks each weekend, nor should you be going out to eat multiple times a week and many more things.
I think part of the problem there is that People These Days(tm) conflate "dealing with a crappy old smartphone" to "eating out of a dumpster" in terms of broke-ness.  As our society overall becomes richer, the perceptions of standards become higher.  Remember when a "big" (36"+) TV was considered impressive?

honeybbq

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Re: Overheard at Work
« Reply #19018 on: November 06, 2017, 09:48:38 AM »


Are you currently in Montrose? That's where I am now!




Not any more. But I lived there for 5 years. Wish I had held on to that townhouse.....

Dollar Slice

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Re: Overheard at Work
« Reply #19019 on: November 06, 2017, 09:54:07 AM »
I think part of the problem there is that People These Days(tm) conflate "dealing with a crappy old smartphone" to "eating out of a dumpster" in terms of broke-ness.

Heh. I was out Saturday night with some friends, and I took a photo which my friend complimented... "what kind of phone is that? Is that a Samsung??"  No, it's a Motorola circa 2014... :-P  And it still has better battery life than your iPhone. (I didn't say that part out loud)

RyanAtTanagra

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Re: Overheard at Work
« Reply #19020 on: November 06, 2017, 10:37:40 AM »
I think part of the problem there is that People These Days(tm) conflate "dealing with a crappy old smartphone" to "eating out of a dumpster" in terms of broke-ness.  As our society overall becomes richer, the perceptions of standards become higher.  Remember when a "big" (36"+) TV was considered impressive?

This is one of my arguments when friends complain about how it was easier for their parents and grandparents to save because life is so much more expensive now.  "No, it wasn't easier for them, you just spend money on things they couldn't afford or even dream of.  Try living like your grandparents lived and with what they had, I bet you'll save".  No cell phone, small tube tv (free on craigslist nowadays), no cable, single economy car, cook 3 meals at home every day, etc.

ketchup

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Re: Overheard at Work
« Reply #19021 on: November 06, 2017, 10:56:30 AM »
I think part of the problem there is that People These Days(tm) conflate "dealing with a crappy old smartphone" to "eating out of a dumpster" in terms of broke-ness.  As our society overall becomes richer, the perceptions of standards become higher.  Remember when a "big" (36"+) TV was considered impressive?

This is one of my arguments when friends complain about how it was easier for their parents and grandparents to save because life is so much more expensive now.  "No, it wasn't easier for them, you just spend money on things they couldn't afford or even dream of.  Try living like your grandparents lived and with what they had, I bet you'll save".  No cell phone, small tube tv (free on craigslist nowadays), no cable, single economy car, cook 3 meals at home every day, etc.
100%.  I don't have the data handy, but nearly everything has gotten cheaper (and better!) over time, with housing basically tracking at inflation (with some clear geographical exceptions), and healthcare and education being the only real off-the-charts outliers.  People don't like hearing that.  Just like how crime in this country has gone down by nearly every measurable metric.

Life is fucking awesome now and better than it's ever been, with this trend likely to continue into the future (granted that doesn't mean you can't have bad luck or fuck up).  Somehow it's easier to complain than to say that.

mm1970

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Re: Overheard at Work
« Reply #19022 on: November 06, 2017, 11:21:30 AM »
I think part of the problem there is that People These Days(tm) conflate "dealing with a crappy old smartphone" to "eating out of a dumpster" in terms of broke-ness.  As our society overall becomes richer, the perceptions of standards become higher.  Remember when a "big" (36"+) TV was considered impressive?

This is one of my arguments when friends complain about how it was easier for their parents and grandparents to save because life is so much more expensive now.  "No, it wasn't easier for them, you just spend money on things they couldn't afford or even dream of.  Try living like your grandparents lived and with what they had, I bet you'll save".  No cell phone, small tube tv (free on craigslist nowadays), no cable, single economy car, cook 3 meals at home every day, etc.

It's not either/ or.  You are correct that our parents and grandparents lived differently BUT -

- they weren't expected to have internet and a cell phone.   Because they didn't exist.  My children are required to have internet to do school work, and we need it for work.  We are also required to have phones.  (Yes, we are cheap and choose cheap plans...but we cannot eliminate these entirely.)

- housing in many (if not most) areas is more expensive now, compared to the typical salary.

- health care is more expensive


I've read a lot of books on the topic - The Two Income Trap (Elizabeth Warren and Amelia Tyagi) I think was the one that went into it the most.  Yes, a lot of things we buy now are actually cheaper than they used to be (in general: food, cars because they last longer, etc.)  But others cost so much more than they did a generation or two ago that the typical family has less discretionary income.


MgoSam

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Re: Overheard at Work
« Reply #19023 on: November 06, 2017, 12:07:59 PM »
In many ways social media has made it harder to save. It is a lot easier to be content with your house and your life when you don't see what your high school and college friends are making and spending it on, when you see that they're dating/married/kids and you are single. I'm not very good at staying off Facebook and I can feel myself getting down from time to time, and I'm someone that lives a fairly good lifestyle while saving a ton of money. I can't imagine it is easy for someone that has a ton of debt and isn't earning a good income.

boyerbt

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Re: Overheard at Work
« Reply #19024 on: November 06, 2017, 12:46:01 PM »
I think part of the problem there is that People These Days(tm) conflate "dealing with a crappy old smartphone" to "eating out of a dumpster" in terms of broke-ness.  As our society overall becomes richer, the perceptions of standards become higher.  Remember when a "big" (36"+) TV was considered impressive?

I thought about this the other day as a coworker was talking about (i.e. bragging) about his new 65" tv. Mine is about eight years old and is a 32" LCD and works just fine.

ketchup

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Re: Overheard at Work
« Reply #19025 on: November 06, 2017, 12:57:00 PM »
I think part of the problem there is that People These Days(tm) conflate "dealing with a crappy old smartphone" to "eating out of a dumpster" in terms of broke-ness.  As our society overall becomes richer, the perceptions of standards become higher.  Remember when a "big" (36"+) TV was considered impressive?

I thought about this the other day as a coworker was talking about (i.e. bragging) about his new 65" tv. Mine is about eight years old and is a 32" LCD and works just fine.
TVs in particular have gotten crazy cheap in the past few years.  I had a hand-me-down ancient (circa 1970s) tube TV growing up, then a $0.99 ~32" Goodwill CRT around 2012, and then this year I bought a giant 1080p 42" Sharp with built-in Roku... for all of $229.  I saw 55-65" 4K TVs at Walmart the other day and I think they were about $400.  Crazy.  I remember when a shitty 42" 720p LCD was like $6,000 and a "good" 27" non-HD CRT was almost a grand and weighed almost half of what I do.

Imustacheyouaquestion

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Re: Overheard at Work
« Reply #19026 on: November 06, 2017, 01:00:35 PM »
Staples and basic goods are as cheap as ever. Rice/beans/oatmeal/frozen veggies (simple meals cooked at home), basic clothing items, econobox cars, TV antenna, etc. If you purchased the same staple basket as your grandparents did, your purchasing power has probably gone way up. 

But our cultural expectation for what constitutes a good standard of living has increased dramatically. People define "the good life" as eating out frequently, drinking at bars, fast fashion, cars that are fun to drive, new furniture, subscription boxes, etc.

Health insurance and housing (in many markets) have gone way up in relative terms, but so has our demand for fancier housing (laundry rooms, dishwashers, granite countertops, garages, closet space, etc) as well as way more square footage per person.

This is one of the core messages of Mustachianism. When someone complains about having to cook at home, they're ignoring the incredible luxury of having enough food to eat that day. Someone complaining about their shitty beater car is probably still driving one of the most reliable cars ever manufactured. By almost any objective standard, basic living conditions on Earth are better than they have ever been for an increasing swath of the population. But you have to get off the consumerist treadmill of hedonistic adaptation first to realize that pursuit of more material goods won't make you happy.

DarkandStormy

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Re: Overheard at Work
« Reply #19027 on: November 06, 2017, 03:14:56 PM »
My coworkers know I'm into finance stuff, and sometimes come to me for advice. A coworker did just that a few months ago. I crunched his numbers, and informed him that his net worth was approx negative 300k (granted it was mostly mortgage debt). He tells me a few weeks later that he is seriously considering buying an 85k custom full-sized pickup (he already has a nice full-sized pickup)...This guy is new at our work, and is making 50k or so, tops. It's almost painful to watch folks do stuff like this.

If you're factoring in home mortgage debt in the -$300k you also have to take into account the asset (house) that he owns.  No one is $300k under water on a mortgage, right??

zolotiyeruki

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Re: Overheard at Work
« Reply #19028 on: November 06, 2017, 03:51:43 PM »
But our cultural expectation for what constitutes a good standard of living has increased dramatically. People define "the good life" as eating out frequently, drinking at bars, fast fashion, cars that are fun to drive, new furniture, subscription boxes, etc.

Health insurance and housing (in many markets) have gone way up in relative terms, but so has our demand for fancier housing (laundry rooms, dishwashers, granite countertops, garages, closet space, etc) as well as way more square footage per person.
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

RyanAtTanagra

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Re: Overheard at Work
« Reply #19029 on: November 06, 2017, 04:09:49 PM »
My coworkers know I'm into finance stuff, and sometimes come to me for advice. A coworker did just that a few months ago. I crunched his numbers, and informed him that his net worth was approx negative 300k (granted it was mostly mortgage debt). He tells me a few weeks later that he is seriously considering buying an 85k custom full-sized pickup (he already has a nice full-sized pickup)...This guy is new at our work, and is making 50k or so, tops. It's almost painful to watch folks do stuff like this.

If you're factoring in home mortgage debt in the -$300k you also have to take into account the asset (house) that he owns.  No one is $300k under water on a mortgage, right??
Well, he doesn't "own" the house, yet, the bank that holds his mortgage does. He had very little equity in the house, so he is 300k underwater.

No, if his house is worth 300k and his mortgage is 300k, it's a wash.  Yes he technically owns zero of the equity himself, but the house's value covers the mortgage.  You can't count the mortgage but not the value of what's being mortgaged.
« Last Edit: November 06, 2017, 04:11:27 PM by RyanAtTanagra »

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Re: Overheard at Work
« Reply #19030 on: November 06, 2017, 04:12:05 PM »
Just a short note that I'm going to miss adding to this thread as I'll be working from home as of today. I look forward to y'all's posts, I'll be living vicariously via my fellow Mustachians. Save On!

RyanAtTanagra

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Re: Overheard at Work
« Reply #19031 on: November 06, 2017, 05:05:40 PM »
My coworkers know I'm into finance stuff, and sometimes come to me for advice. A coworker did just that a few months ago. I crunched his numbers, and informed him that his net worth was approx negative 300k (granted it was mostly mortgage debt). He tells me a few weeks later that he is seriously considering buying an 85k custom full-sized pickup (he already has a nice full-sized pickup)...This guy is new at our work, and is making 50k or so, tops. It's almost painful to watch folks do stuff like this.

If you're factoring in home mortgage debt in the -$300k you also have to take into account the asset (house) that he owns.  No one is $300k under water on a mortgage, right??
Well, he doesn't "own" the house, yet, the bank that holds his mortgage does. He had very little equity in the house, so he is 300k underwater.

No, if his house is worth 300k and his mortgage is 300k, it's a wash.  Yes he technically owns zero of the equity himself, but the house's value covers the mortgage.  You can't count the mortgage but not the value of what's being mortgaged.
I'm sorry you guys are 100% correct. I wasn't thinking straight when I wrote that post. I should have said "he OWED 300k" instead of NW. My apologies.

Just make sure he knows :-)  If you told him his net worth was negative 300k he might have said 'fuck it!  too late now, might as well buy an 85k truck!'.

mm1970

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Re: Overheard at Work
« Reply #19032 on: November 07, 2017, 12:38:41 PM »
But our cultural expectation for what constitutes a good standard of living has increased dramatically. People define "the good life" as eating out frequently, drinking at bars, fast fashion, cars that are fun to drive, new furniture, subscription boxes, etc.

Health insurance and housing (in many markets) have gone way up in relative terms, but so has our demand for fancier housing (laundry rooms, dishwashers, granite countertops, garages, closet space, etc) as well as way more square footage per person.
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).


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Re: Overheard at Work
« Reply #19033 on: November 07, 2017, 01:22:29 PM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.

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Re: Overheard at Work
« Reply #19034 on: November 07, 2017, 03:20:45 PM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.

I'm going to point out here that part (not all!) of the square footage gain is due to more households embracing the work-from-home lifestyle. The number of single-family homes and apartments with a specific office/den in the floor plan is on the rise. According to Statistician Google, the number of people telecommuting is rising 10% faster than the rest of the economy and 45% of Americans report working from home at least some of the time

Imma

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Re: Overheard at Work
« Reply #19035 on: November 07, 2017, 03:51:38 PM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.

I think that one of the reasons the average size of the American home has gone up so much is because the available land is almost unlimited. You're always going to have places like Manhattan where everyone wants to live and are therefore extremely expensive, but the rest of the country is so vast that the land in itself isn't that valuable. I imagine building a home just *slightly*  bigger is hardly an increase in cost, just a few more bricks. I can see how it's tempting for people to just have that *slightly*  bigger home than the neighbours.

In contrast, where I live in Europe, 80% of the value of my property is probably the land. I have seen empty lots go for about the same amount of money as I paid for my home. Because the land is so expensive building a slightly bigger home is going to increase your cost massively - you'd need to buy more land for it.

My home is about 800 square feet and has three bedrooms. This is the standard 'older model' terraced home - it was built in the 1940s. Newer homes from the 70s onwards are probably closer to 1200 square feet. Anything over 1800 square feet is a mansion. My 800 square feet home stands on a 1200 sf lot, so any increase in size is hardly possible unless I'd buy out the neighbours. ( and this is an inner city neighbourhood with a bad reputation, not an expensive part of the country at all).

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Re: Overheard at Work
« Reply #19036 on: November 07, 2017, 08:35:00 PM »
A coworker just dumped unopened packs of food (crackers, cookies) in the trash today. expiration date sometime in 2018, at a quick glance. I was doubly mad as she didn't even care to sort her trash (plastic vs food).

It was also too awkward for me to dive into the trash (in a crowded area at the office) to salvage what could be salvaged.

JordanOfGilead

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Re: Overheard at Work
« Reply #19037 on: November 08, 2017, 06:24:34 AM »
I have a samsung s4 phone that doesn't charge the battery anymore. Phone is old but works fine aside from the battery problem. Luckily my sister gave me her own s4 when she upgraded hers but the screen on that one is broken. So I use that phone as a charger and just switch the batteries when the one on my s4 is depleted. A little strange I know but really not a problem.

I'm switching batteries at work today and my coworker asks what I'm doing. I explain and jokingly add I'm also a cheap bastard. She looks at me sad and says "no I know you just don't have any money. People don't do this to save money they do it because they don't have any. Young people today just don't have any money (I'm 32 she is 67) everything is so expensive especially with kids (I have two boys). I bet you don't have a single isk saved. Not one." She seemed really worried about me. I just said "oh really?" and changed the subject.

Funny enough, I had he exact same problem and used the exact same solution on both my Captivate Glide (an s2 with a fancy keyboard), my Rugby Pro (an s3 that you could bounce off of a brick wall without breaking it), and my s5 "Active" that couldn't withstand being in my pocket when I squatted.

Eventually I got smart and stopped buying Samsung phones.

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Re: Overheard at Work
« Reply #19038 on: November 08, 2017, 10:37:36 AM »
My boss and I were dealing with a difficult situation and she sighed and said to me "I hope I win the lottery one day."

And I had this moment of realization that even though she probably makes 2x my salary she probably doesn't have as much saved as I do. She has two kids that she sent to a fancy prep school bc it was family tradition and are now in college. Her husband is in a niche creative field and I get the feeling she makes more than he does, or at least has a more consistent income.

Before my husband and I started planning for FIRE I would have said "Yeah, me too!" but now...I was caught off guard and I just said "Ha!" and secretly felt bad for her.

Then she said "Hey, you better hope I win, I'll pay for your son's college!" And I immediately thought - we often wonder if we are putting *too much* in his 529. But I just said "Aww, thanks! We are saving some but also hoping the SUNY schools will still be free by then." If we weren't having a light hearted conversation, this might have given me away - in that the tuition is only free for students whose parents make 125K or less per year, and my boss knows my salary (~70K) and can probably guess my husband makes enough to put us over the top. However we'll probably be retired by the time he's 4 or 5 years old. But she probably wasn't calculating that in her head at the moment.

And then she made a joke about "Oh Sure! College will be free after I'm done paying for it for my kids!"

I think too much. :O

mm1970

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Re: Overheard at Work
« Reply #19039 on: November 08, 2017, 12:16:10 PM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.
The point I was making is that housing is more expensive.

*Some* of that is because the median house is bigger

*Some* of that is that individual houses that AREN'T getting bigger also cost more than they once did.

BOTH result in housing costs being higher than they "used to be".

For example, a local company is thinking of opening a new office "somewhere else", and they are pretty open to where.  It has to be:
- near a university
- near a major airport
- near a major customer
- cheaper than their two current offices (So Cal and DC)

- The one possible location recommended?  Boulder.  Yah, I looked up Boulder.  It's not cheap. 

HOWEVER, it is cheaper PER SQUARE FOOT, but what I discussed with the employee who mentioned it was this:
- cost for a house there, same as here.  Difference is, there are plenty of 800-1100 sf 2 BR homes here, built in the 1920s to 1940s.  Houses in Boulder are newer (thus, larger).  Same price gets you a bigger house BUT you can't find a 900 sf house.

YES some people like bigger, nicer homes.  But plenty of other people are just stuck because of whatever is available.

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Re: Overheard at Work
« Reply #19040 on: November 08, 2017, 02:52:57 PM »
As our society overall becomes richer, the perceptions of standards become higher.  Remember when a "big" (36"+) TV was considered impressive?

That whole concept really becomes interesting when you head back to the mid-twentieth century. In 1954 the average TV cost $200, or $1795 in today's money. A 21" color TV that year was a grand, or about what a new four door car costs at the time.

zolotiyeruki

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Re: Overheard at Work
« Reply #19041 on: November 08, 2017, 08:36:44 PM »
Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.
The point I was making is that housing is more expensive.

*Some* of that is because the median house is bigger

*Some* of that is that individual houses that AREN'T getting bigger also cost more than they once did.
Ah, thanks for clarifying!

kayvent

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Re: Overheard at Work
« Reply #19042 on: November 09, 2017, 04:08:03 AM »
This is very, VERY true.  From the 70's to the 2010's, median home sizes have increased from 1500ish sq ft to about 2500 square feet.  At the same time, however, we've seen the real cost per square foot drop dramatically.  My parents built their 3,000 sq ft house 30 years ago.  We bought a similar-sized house six years ago for about the same cost.  Not only that, but energy costs have been pretty much flat (in real dollars) while homes have become more efficient.

Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).
*Your* house is the same, but the *median* home size has certainly increased.  Does that cost/sqft account for inflation?  What I've heard/seen is that in areas with crazy housing prices (e.g. SF Bay), it's not so much the cost of the home itself as it is the cost of the land it sits on.
The point I was making is that housing is more expensive.

*Some* of that is because the median house is bigger

*Some* of that is that individual houses that AREN'T getting bigger also cost more than they once did.

I’ve theorized, with little evidence, that a contributing factor to home price inflation is unmustachian behaviours:

- (many) People don’t mind piling up debt or being house poor. Therefore, they are more inelastic to home prices

- I’ve heard on HGTV that the average homeowner lives in a home for 7-10 years. Some of those people who live for less than ten years in a home have twenty-five to thirty year mortgages with zero down. At a 7% interest rate (historically typical) only 15% of the principal is recovered after ten years.

- 0$ or low down payments. This triggers CMHC (or your country’s equivalent) which causes the previous point to be aggravated. 5% down payment on a home means only 11% of the principal is recovered after 10 years on a 25 year mortgage (5.5% after 7)

- People sell their homes to pay off debt

With these factors and others, I feel there is hefty pressure on prices for homes not failing whereas the resistance to home prices rising is alleviated by such things as (until recently) ever failing interest rates, long term mortgages, and government subsidies for mortgages (I.e. interest deduction).

So in summary, I think if we were all more mustachian, we could have the same size homes but be paying less.
« Last Edit: November 09, 2017, 04:10:10 AM by kayvent »

Just Joe

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Re: Overheard at Work
« Reply #19043 on: November 09, 2017, 08:07:39 AM »
With some of these new houses which have all the features of a McMansion including the price tag except the sq footage - I have to wonder if they are marketed like cars.

Its new! It has all the shiniest features! A warranty! And it'll appreciate (maybe). Low payments! Sign here....

Meanwhile just down the road is another neighborhood with home that have more sq footage for less money, far less traffic, and mature trees (shade which is important to me, our summers are hot), quiet.

I don't get it.

These new house owners aren't staying very long. One sold, one is for sale, and the other two might be close behind.

Imagine these to be very spendypants people: new house, new cars (customized $40K+ Jeeps), delivery trucks, time to move on to the bigger payment ---- er, house. ;)

Vast assumptions on my part I know. Not enough people playing the long game.

Dictionary Time

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Re: Overheard at Work
« Reply #19044 on: November 09, 2017, 08:10:34 AM »
Depends very much on location.

My house is pretty much the same as it was when it was built in 1947.  1146 sf.

Cost per square foot when it was built? $54
Cost per square foot in approx 1984 when prior owner bought it? $108
Cost per square foot now? $687

Other areas that I'm familiar with, where there's not a lot of sprawl /new housing, have been similar (albeit not that bad).

Are those inflation adjusted already?  If not, I put them in the CPI calculator and

1947's $54 =
1984 $262 =
2017 $620.

Maybe the big dip in the 80s is due to the high mortgage rates.

ketchup

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Re: Overheard at Work
« Reply #19045 on: November 09, 2017, 08:13:32 AM »
With some of these new houses which have all the features of a McMansion including the price tag except the sq footage - I have to wonder if they are marketed like cars.

Its new! It has all the shiniest features! A warranty! And it'll appreciate (maybe). Low payments! Sign here....

Meanwhile just down the road is another neighborhood with home that have more sq footage for less money, far less traffic, and mature trees (shade which is important to me, our summers are hot), quiet.

I don't get it.
I've got some of these near me.  I don't get it either.  Plenty of houses in my "less cool" older neighborhood have the same square footage as the brand new ones, and they're mostly updated too (same school district and just as suburbanly-far from the closest grocery stores/etc).  Only thing they truly have on my neighborhood apart from all being 0-5 years old is two car garages, but is that really worth an extra $200,000 to anyone (and I don't mean 700k vs 500k; it's more like 150k vs 350k)?
« Last Edit: November 09, 2017, 08:18:19 AM by ketchup »

zolotiyeruki

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Re: Overheard at Work
« Reply #19046 on: November 09, 2017, 08:49:39 AM »
With some of these new houses which have all the features of a McMansion including the price tag except the sq footage - I have to wonder if they are marketed like cars.
A couple weeks ago I was talking to a contractor friend who builds custom homes.  When building a home, the square footage of the house doesn't actually affect the cost very much.  The land still costs the same, the permit is the same, the utility hookups cost the same.  What really drives the cost difference between small homes and big homes is the number of bathrooms/kitchen(s), and the finishes.

Builders love to build big houses with few bathrooms--people generally expect a price of $X/sq ft, and since empty square footage is *really* cheap to build, the builder's profit margin goes up.

formerlydivorcedmom

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Re: Overheard at Work
« Reply #19047 on: November 09, 2017, 02:49:52 PM »
Not quite at work, but ...

My daughter is in middle school.  Every year in math class they have lessons on personal finance. Last year, they had to create a hypothetical budget and sort hypothetical bills into fixed costs versus variable costs.

My daughter and her teacher got into quite the argument on where electricity and water/sewer fit.  The teacher insisted that these were fixed costs.  My daughter was equally adamant that families control their usage and can therefore reduce their costs by as much as they need to.

The teacher laughed at that idea.

My daughter came home highly irritated because a) she didn't make a perfect grade, and b) "my teacher is an idiot"

dragoncar

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Re: Overheard at Work
« Reply #19048 on: November 09, 2017, 03:05:50 PM »
Not quite at work, but ...

My daughter is in middle school.  Every year in math class they have lessons on personal finance. Last year, they had to create a hypothetical budget and sort hypothetical bills into fixed costs versus variable costs.

My daughter and her teacher got into quite the argument on where electricity and water/sewer fit.  The teacher insisted that these were fixed costs.  My daughter was equally adamant that families control their usage and can therefore reduce their costs by as much as they need to.

The teacher laughed at that idea.

My daughter came home highly irritated because a) she didn't make a perfect grade, and b) "my teacher is an idiot"

There's usually some minimum fixed cost, assuming you aren't off the grid.  Connection fee, monthly minimum, etc.  There's there's a reasonable minimum consumption that you know you will never go under (e.g., you expect to always have a refrigerator and take a shower once a week = $x).  You can treat the remaining portion as variable.

But I sort of agree with the teacher that if I had to pick a category, I'd call it fixed because even for a frugal person it's not likely to change much on an annual basis.

DS

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Re: Overheard at Work
« Reply #19049 on: November 09, 2017, 03:13:35 PM »
Options too limited:

Definition: A mixed cost is an expense that has attributes of both fixed and variable costs. In other words, it’s a cost that changes with the volume of production like a variable cost and can’t be completely eliminated like a fixed cost.

https://www.myaccountingcourse.com/accounting-dictionary/mixed-cost

 

Wow, a phone plan for fifteen bucks!