[shados]

A rich person can buy the cheap option. A poor person usually cannot buy the expensive option. Of course the rule doesn't apply to everything, but it applies to "enough".

Buying a house is often much better financially than renting (in high cost of living areas, usually by a factor)

Hardwood furniture can last several generations. Plywood stuff...not so much.

Mutual funds have much lower fees if you invest a larger amount of money. Banks and credit unions give you more, cheaper services if you have more money. Borrowing money is cheaper the better off you are.

You can get a better job if you can afford to be on the market for longer.

And so on, and so forth. There are exceptions (my cheap ikea couch has lasted 10-15 years, while a fancy hardwood table we got started falling apart after just a few years), but you just have more options if you can afford more expensive stuff. Some of those options are vastly more cost-effective. Being poor is very expensive.

[meow1032]

If the point of the quote is to say that "sometimes the more expensive option is better value" it's accurate, but also is obvious, and doesn't really mean anything.

To be clear, I don't think it's strictly wrong, just that it adds nothing of value to a conversation. It just gives a very specific example of when a rule holds.

It's kind of like if the employment statistics come out, and they show improvement, but someone comments that they just got laid off that week. They aren't wrong, but they're also not adding anything to the conversation.

[nothrabannosir]

> If the point of the quote is to say that "sometimes the more expensive option is better value" it's accurate, but also is obvious, and doesn't really mean anything.

That is not the point, and the comment you’re replying to gave some very real, serious examples as to why not. Cost of living alone eats an incredible amount of your budget unless you’re very well to do, so there, immediately, you’re out of “sometimes” territory. We’re already in “the majority of most people’s budget” land. Then you have payday loans, any kind of loan in general, late fees, etc: all of these are costs to low liquidity. Unexpected expenses cannot be absorbed if you have no cash nor assets to sell. Being poor is expensive; this is not a random anecdote, it’s a fundamental character flaw in our society that has been consistently identified and documented. Google “the cost of being poor” for more reading material than one could process in a lifetime.

If you’re talking about the specific example in the quote, alone: it’s an illustration, to make a complex and ugly point understandable and palatable and easy to digest. It’s not a random data point: it illustrates the mechanism by which being poor is expensive. That’s not straight forward to intuit, hence this example has merit.

[ekianjo]

> Cost of living alone eats an incredible amount of your budget unless you’re very well to do,

this has not been true for a long time by now. If it were true there would be no mass market for tourism and no budget for so many people to buy iphones every year or two. By far we all earn way more than what we strictly need to live, even in your first jobs in your twenties.

[kiliantics]

You've obviously never had to work at somewhere like Walmart

[ekianjo]

is walmart representative of 75 percent of jobs out there?

[lopmotr]

It does mean something - there's asymmetry between rich and poor people's ability to buy good and bad items. The rich can buy either but the poor can only buy cheap. So even if only a few things had this boots effect, and everything else worked backward (cheaper item has better value per dollar) that would still skew the fairness in favor of the rich.

That assumes rich people actually participate. They could also just buy cheap things over and over because they can. I like to do that so I'm not too emotionally and financially attached to possessions, which becomes a liability and a worry.

[ekianjo]

Rich people dOnt always buy premiUm products in every single category of products. This was somewhat of an insight I learned when working in the FMCG industry.

[kaybe]

Wait that wasn't obvious for you?

[ekianjo]

No, it was not obvious to me since I have never been super rich before

[shados]

If it was so obvious only poor people would shop at wal-mart. That is not the case.

[fingerlocks]

Just a nitpick, but I think you meant particle board instead of plywood. High quality plywood is composed of several thin sheets of hardwood in which the grain of each runs perpendicular to it’s neighbor. This makes is stronger than pure hardwood with far less warping and cupping over time.

[shados]

Yeah, As you can tell I'm no woodworker :)

[zeth___]

>Buying a house is often much better financially than renting (in high cost of living areas, usually by a factor)

Not any more, especially in the global cities. You are better off investing your money on the stock market.

[shados]

If I had the choice between no housing whatsoever and stock market, sure. Unfortunately being homeless kind of sucks so the choice is between being and renting. The former is cheaper if only because I don't have to deal with massive rent increases every year. I literally bought my place because I was about to get priced out of the city by my landlord.it took only 2 years for an equivalent unit in an equivalent location to cost me less (including mortage, taxes, maintenance, HOA) than the unit I was renting now goes for.

[zeth___]

Sorry, can you clarify what you mean? I don't understand what you mean by "cost me less"?

[shados]

I literally mean "cost me less" (the numbers below are bogus but the proportions are correct, just so people who know me don't get too much insight into my finances, haha)

When I last rented (in a very high cost of living area), my rent was 2500 and I was faced with a 300/month increase on the renewal of my lease.

I bought a place in an area that is roughly an (almost) as high in demand. Much nicer, 3 times the size. The mortgage was 2000/month. Add taxes and HoA and It's about 3000/month. There is some maintenance and I have to pay for my own repair, so my housing budget is about 3500 a month.

That was several years ago. I can look up the listing for the apartment I used to rent (large building, lots of units on the same floor with the same plan and they have a website). It hovers between 3000 and 3500/month these days.

Except I can deduct about $5000/year in taxes from my mortgage interest and the property taxes (though starting this year I won't be able to do the later anymore because of caps). And on that 3500/month I pay for housing, about $1500ish goes in principal. So effectively, the place costs me about 1500-1600/month. Add that property value is up drastically in the area over the last few years, and I'm living here somewhere between "for free" and "at a profit". That's a heck of a lot cheaper than renting.

There was the matter of the downpayment. I got pretty lucky in some of my stock investments, but the above is hard to beat (and the only reason I have so much money to invest IS because of how much cheaper my housing is now compared to what it would be). Oh, the condo association is letting me stick a solar array on the roof, which is also a fine investment even with the new tariffs. Landlord wouldn't have allowed it. If I ever need to leave or cash in, I can flip the place on the market in a day (well, plus like a month for the closing I guess). I can rent it too for a sweet added profit.

All in all, renting is expensive as hell.

[PJDK]

Not the OP, but mortgage payments will stay fixed over time (assuming interest rates stay the same). Rents increase with demand for housing.

Having also recently bought a house, my repayments are comparable to rent, and double up as an investment.

[aaronblohowiak]

Plywood stuff can last. particleboard on the other hand..