Take the productivity gains as pay increases, not just as increases in whiz bang

Not enough people take advantage of cheap prices of modern machinery. There are lower end cell phone and tablet models that allow you do essentially everything that the higher end models allow you to do at a fraction of the price. You can get pretty much all the functionality you need at prices ranging from 1/2 to 1/100th the price. Several points :

– The existence of smaller tablets obviate the need for a smart phone. I bought a cell phone for $5 and it allows me the same conveniences as phones that cost 100 times more. What I especially like about the $5 phone is that I don’t care too much if I lose it or break it. I really don’t see the point in buying a phone for more than $15. Also I prefer a phone with just two apps: making phone calls and an address book. I don’t want to read emails or other documents on a surface smaller than the size of my hand. That’s what a tablet is for.

– The only reason to buy an expensive Ipad I can see is for purposes of conspicuous consumption. (Okay partly for tech whiz-bang, etc.) That’s not exactly a minor reason — its the reason people buy most things. Even people who say they aren’t buying something for this reason generally are. But I wanted to have all periodicals and books at my fingertips everywhere there’s wifi, and the $200 Kindle Fire provides all of that at half the price of the cheapest Ipad.

– Cars can be driven much longer than people usually drive them. I drive a 14 year old Honda. It still runs well. I don’t think 10 years is old for a car anymore, functionally speaking. (This is one of those things that makes it difficult to estimate inflation and changes in living standards over time) . Also the Car Talk guys have shown that its generally wrong to think that buytming a new car is the better decision financially when your old car starts needing major repairs. Given the premium that new cars command, fixing your old car is almost always cheaper. (I think often people may use thus reasoning as a rationale because they just want a new car to experience a new car; if they went through the expenses they would realize its foolhardy.)

A lot of people could improve their standard of living by befriending a trusty mechanic and buying a car from him, rather than leasing a new car from a dealership. If you know how to find a reliable used car (not easy but doable) , then buying or leasing a new car bears a close resemblance to spending $4000 for gold rims, detailing and vibrating stereo equipment for an aging Lexus. Different demographics make these decisions but perhaps the reasons aren’t as different as sometimes imagined.

-Another thing: dont replace cosmetic things on the car. Occasionally, various ornamental pieces come off the inside of my car. This isn’t just due to age ; its also because I don’t treat things delicately. I don’t really care too much about this stuff so I wouldn’t think of replacing the pieces.

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