Pay Too Much for everything

Some things fall somewhere in between. Your grandfather's watch is a marvel of mechanical engineering that will keep time adequately for centuries if taken to a watch-shop for maintenance every few years. That maintenance will cost more than buying a new timex would, and the timex will keep far more accurate time. Timex's are disposable. When the timex's battery dies it will probably cheaper to replace it than to replace the battery. However, their function is superior for all practical purposes. Many people currently enjoy the aesthetics of mechanical watches. They're currently enjoying a major surge of collectibility, but that wasn't the case twenty years ago and it may well not be the case twenty years from now.

The real trick is to figure out what can last and what should be treated as disposable. e.g. Say you're building a home theater. Amps have changed very little over the last 20 years. Preamps and receivers go obsolete every few years. If you spend $5000 on a Bryston amp it will easily last 20 years (that's how long it'll be under warranty!), but a Bryston preamp will be hopelessly unusable long before that 20 year warranty runs out.

There are also big variations in short-term durability too that aren't necessarily correlated with price. e.g. Macbook air's and the new retina pro's are gorgeous pieces of engineering, but they're made to be disposable. If you spill coffee on them they're basically done. You can't remove the battery and take them apart to clean them (proprietary screws) like you can with a much cheaper laptop and Apple won't lift a finger to help you. This is a case where our perceptions of what is durable and high-quality can actually lead us to buy something that won't last as long!

Using this, I've managed to buy better shoes, toasters, and even a car than I've ever had before, and at less than I would have spent if I hadn't done that research. The car ended up being the cheapest car made by that manufacturer, and I like it better than any other car I've ridden in or driven. (Admittedly, I haven't tried anything over about $50k, but I couldn't afford those anyhow.) I would never have found it if I used price as an indicator of quality, instead of reviews.

The key to reviews is to look over the good reviews. Look at the bad reviews instead. Find out what people hate about it. And then ask yourself: Does that feature matter to me?

My rice maker doesn't make brown rice well at all. Many people complained about that. However, white rice is the only kind I make, and it does a great job on that. So it didn't make sense to spend twice as much money on a better rice maker. I could have spent more money and gotten an objectively better rice maker. But why bother?

So no, I don't agree with paying too much or buying the 'best'. At all.

A $300 meal isn't 10x better - in terms of taste (subjective obviously) or nutrition - as a $30 meal. A BMW 3 Series is a better car than a Ford Focus, but looking only at the practical reasons to own a car, it's not even close to having twice the value.

In a lot of cases, brand names bring no value other than the brand. And while that can have a placebo effect, it's not more value. Medicine comes to mind as a great example. You are paying more for marketing and packaging than you are for R&D. The recent thread on memristors even highlighted that R&D costs are 1/100th of total cost, with marketing taking the lion's share.

Quality items appreciate while cheap items depreciate? No consumer good should be viewed as a financial investment. If something does appreciate in 50 years, it'll be more about luck than anything else.

  Many of the intangible pieces that make up the quality of a product or service
  go out the door when we’re getting a deal. They’re doing a favor and sometimes
  when we bargain, people resent us.

As for the relation between cost and quality, I agree with many here that it isn't clear-cut. But the relation does exist. You just need to be discerning, which is why the Op writes:

  Because we only buy quality, we are forced to wait until we can afford what we
  really want.  That wait time leads to better decisions, and it forces us to
  make due with what we have.

Lifetime guarantees are pretty much worthless because most people will forget they have one, lose the item or lose the documents related to it.

Top pay doesn't attract the best people. Top work attracts the best people because the best people have most likely realised that money doesn't really matter if you're working on something that doesn't provide meaning for you.

The sweet spot for quality is to figure out the approximate average price of the product you want to buy and then pay a little above that.

1) That paying more equates to higher quality. It doesn't. Your £30 t-shirt will fall apart every bit as quickly as your £3 multi-pack from Primark.

2) That you want to have something last a lifetime. Just last weekend, my dad was complaining about having no good jig-saws. Then followed up with "of course, I could buy a good one, but I only use them once every 5 years, so they're knackered when I need them anyway".

3) When you want quality, you can't just borrow it off someone else.

I'm not against paying more for something e.g. my uncle has expensive joinery kit because his day job is a joiner. I simply dislike the mentality of "I must pay top-dollar for everything", before you've evaluated what you actually want.

I'm sure other watches were purchased by my other great-grandfathers; to the best of my knowledge, none of those watches survived to the present day. It might be because they only bought cheap watches. But it might also be that they bought expensive watches and those watches broke or got lost. Looking solely at what survived to today tells you very little about what was purchased yesterday.

And I'm sure my great-grandfather didn't buy the most expensive watch possible. If it had come down to the choice of buying a watch which cost $10 more, or saving that money to give me $200 today, I'd take the money!

Another point I'd like to make is that cheap stuff can be totally awesome, especially if you don't need or want it to last a lifetime. Example: IKEA. My girlfriend changed her mind about the furniture she wanted in her apartment several times over the few years she was there, and was able to update the look to be exactly what she wanted for very little money. Compare that to the armoire I payed an ass load of money for that will surely last a lifetime, but doesn't really fit anywhere in my current home.

The reality is you can't rely on any single of these to be true, and as soon as you're willing to buy something and especially if you're willing to pay 10, 50 or 100% more than the absolute minimum you're the prime meat of the other half of the worlds who make it their business to ensure that it's not an equitable approach.

Our audience here is mostly programmers. Programmers should all know the golden rule of optimization: profile it first. Don't take it on intuition or faith that "this is what was slowing me down" unless you've measured it. The same principle applies in personal finance. Group together your expenses into some key logical categories -- "groceries", "tech", "rent", "retirement", "health", "nights out", and whatever else makes sense to you. Then add them up, do the maths. Know what you're spending and how it compares, and how the categories make up your monthly budget.

Frugality is generally quite good, but just like code, it's quite possible to overoptimize it into a time-sink.

Also, it's key that you see both the high-cost single-time expenses and the low-cost-but-everyday expenses and you get an idea for how they compare. Depending on how often you visit Starbucks, it might be a very good or very insignificant change to brew your own coffee at home; go on and measure it.

The single most surprising thing that I discovered about this process was that, even though I feel like I give money to beggars in the street "often" (i.e. whenever I see them and they ask) and give "a lot" (i.e. much more than is normally typical), the amount that I give actually works out to almost nothing on a monthly basis. Like, I'm poor and right now I have no proper employment (they don't pay you to do a Master's degree) and yet I can still afford to be generous to the people who are down on their luck, and it's just nothing when you compare it to the amount I'd save if I stopped drinking cola. I've got no income, but I'd still easily spend € 50 on food to throw a party for my friends, so long as it happens only about once a month, twice max.

First, I obviously cannot always afford the high price. When I bought the car I had checked the failure reports and decided it just wasn't worth paying an additional few months salary to get the failure probability down 2-3 percent a year (checked other parameters too, similar conclusions.) And yeah, I waited till a good deal was available to me.

Second, getting a quality item might cost even more of my personal time - finding out which one is actually good and searching for a local vendor isn't exactly free.

Third, maybe I don't even want an expensive item that lasts forever. Suppose I want to get into photography but don't really know if I'll keep this hobby. I'd intentionally google "cheap beginner dslr" and stick with the findings. Chances are that by the time it needs replacement I'll be ready for a more fancy gear or bored with the new hobby. Win-win :)

I think price is a poor estimator for quality since marketers know that price alone can signal quality, so it stands we need something beyond price.

How do we determine if something is quality when price is unreliable.

Higher price != Better Quality (not always anyway)

I use a lot of earphones, and they tend to break quite fast. Once or twice, I decided to move away from the usual 15$ models and pay 60$ for better brands, with good reviews, and everything. Did they last longer ? Of course not. They sounded marginally better, but nothing worth the price..

The thing is, price is an indicator of positioning. It's a marketing tool, and it's generally not correlated to quality. Buying the very cheapest is usually not a good idea, because the manufacturer probably did everything it could to actually beat competitors and propose the lowest price. But other than that, that's pretty much all you can know in advance.

Knowing what items are made of good quality and will last longer (and therefore are worth paying an extra for) is very hard. So, my reasoning on that is that I prefer to spend less money on something, since on average, it will live just as long.

For example, I'm buying a set of screwdrivers for a DIY job. I know I'll need screwdrivers for the rest of my life, I want to buy quality ones. I go to some big DIY store expecting a good range of screwdrivers. What I get is a selection of mickey-mouse screwdrivers (£5 for a set of 20) and some middle-of-the-road-but-overpriced screwdrivers (£20 for a set of 20). There is no "buy these and never buy another screwdriver again" set for £60-100.

You can get these, but it takes considerable effort to track them down.

I've found it's much better to avoid middle-priced things, most of the time. Usually, the cheapest option will meet your needs just as well.

But then you need to identify the things in your life that really contribute to your happiness, and then pay what's necessary for full quality in those.

I spend top dollar on fresh meat and vegetables and on my kitchen pans and chef's knives and olive oils for salads. But I have the cheapest vegetable peeler and spatula and paring knives and toaster and olive oil for frying.

I think the example given, for a golfer, was a crafted/precious golf tee over a trashy electronic putting game. (Ignoring, of course, the fact that the tee might easily get lost.)

e.g. My dad has 2 Bosch drills ( http://i.imgur.com/aCkaq.jpg ). Roughly 20 years old. When you hold them in your hand you just know that it'll last another 40 years. As a result I have a really difficult time taking any of the modern drills seriously.

Value = Benefits / Cost http://en.wikipedia.org/wiki/Value_%28marketing%29

Marketing comes into play. If not, items for sale would be using cost-based pricing.

A Mac and a PC would both can accomplish the same task. But one is more expensive than another. Being cheaper doesn't necessarily mean it won't last as long.

Tipping is one area that I don't understand about cultures that have them. Generally, I would expect the tip to be included in the price of the food. Why waste my time and have me figure out what amount to tip? Personally, I don't see the perceived value of tipping.

In some way, how much you pay is also determined by how you see yourself, or in some cases want others to see you.

To quote from the article: "People who constantly try to always get that great deal end up spending all their time chasing those deals and never actually get things done. I’ve seen people do this their entire lives, and it is debilitating."

You can say the same about people who spend all their time trying to constantly get "the best" product. Figure out a few things that are important to you and maximise these - whether on quality or price. For the rest, learn to accept "good enough" and get on with your life doing things that matter for you.

I've had such a good relationship at some of my regular restaurants to the point where I once had ups deliver a package to the bar for me when I was out of town. Other places, the staff starts comping your drinks. My best one was the manager at a restaurant giving me a blanket 20% discount on anything I buy (I tip at least 25% after they put in that discount).

In the long run, you get better service if you pay for it.

A $5 on a 2000 is 0.25% and a $0.50 on $20 meal is 2.5%

I usually eat at the same few restaurants all the time. They’re maybe 10% more expensive, usually locally owned, and the food doesn’t come out of a frozen pre-made bag before being tossed in the oven. I never tip less than 20%, and I’m not an asshole….at restaurants.

I don't understand this thought process. Why not pay 100% tip then? Is the 20% number somehow magical and affords the ability to be elitist? So if I tip 15%, which is the average suggested tip in Western Canada, I'm somehow an asshole???

For example, I wouldn't buy a Ferrari or even Porsche 911 (both high quality cars, no doubt, but expensive) when a Nissan GTR R35 performs just as well and costs less.

All three will last a lifetime with a bit of care (I hate how people just use their tech without any maintenance, then wonder why "the POS" broke down!), so why pay more (aside from the design)?

For example, I could go out and buy a $200 pair of sunglasses but depending on where I buy them they can either be poor quality (e.g. fashion brands, sunglass hut, etc) or exceptional (e.g. fishing shops, sailing suppliers, workman-glasses, etc).

You would expect reviews to give you an accurate way to tell but people often review a product by the way it makes them FEEL rather than about the product its self.

Other than that, it amazes me how people won't spend for quality in situations where it clearly is in their best interest for the long-term...

[1] if someone has the exact quote, I'll be thankful for it.

Also, the point missing is that you need to take care of your expensive gears. You need to put money into maintenance.

The challenge is automation and commodification pushes us towards the lowest common denominator. Look at airlines, being forced into price, not quality.