Living well on the trailing edge of Luxury

“The only constant in the world is change”

That old quote is amazing, because it is so true no matter how deeply you think about it.

What is even deeper is that it is credited to a guy in 500 BC, back when things were changing almost unfathomably slower than they are right now. Let’s review a little North American history in order to compound our amazement:

• For thousands of years, the natives of this continent lived a pretty constant lifestyle: hunting, skins, lots of cool techniques and tools, but only very small changes over hundreds of years.
• In the 1500s the Europeans started pushing their way in, bringing their farming and somewhat more complicated industry.
• It took “only” 300 years to get to the point of making things such as steam engines (in the 1800s).
• In the 50 year period from 1900 to the 1950s, people were shocked at the rapid introduction of things like cars, television, and washing machines. Technological change was much faster than that of the 1800s, but it STILL seems slow to us by today’s standards – 30 years later in the 1980s, televisions and washing machines were still pretty clunky.
• The next 20 years transformed the world even more quickly. In the 1980s, a few people got computers. In 1993, the Internet started to catch on. In 1999, everyone had several computers and internet access.. and cell phones had monochrome screens. In 2007, the Apple iPhone 1 stunned the technology world by taking everything previously invented and putting it in one sleek touchscreen tablet. In 2011, we are on our fourth version of the iPhone which makes the third version (from 2009) look like a hopeless caveman relic.. yet even the iPhone 4 is only months from being obsolete when the iPhone 5 comes out.
• And an update to this eight-year-old article from the perspective of 2019: Now we have the iPhone 10, gasoline cars have been made obsolete by Tesla and the human driver is the next thing on the chopping block, gigantic 4k televisions are the price of a fancy restaurant meal, Amazon has taken over almost every part of the retail world, and of course the exciting newer-than-new iPhone 5 from the previous bullet point is now so old-fashioned that a caveman would not even use it to fashion an arrowhead.

This long introduction is not the most concise way to get to my point, but it’s fun to remind you of this trend of acceleration so you can use it to your advantage.

You see, we humans are actually not very good at noticing accelerating trends. Maybe because all of our evolutionary history was spent in times of very slow social change.

So if you ask an average modern person about what things will be like 10 years in the future, they will look back 10 years in their life, estimate the amount of change that has happened in that time, and tack on that amount of change to the present world to guess what the future will be like. They will totally miss the exponential rate of change, which means the future will surprise them.

I like to have a chuckle occasionally at the “peak oil” movement’s projection of future oil demand. These people say, “Well, our oil consumption doubled over the last 10 years, so in future decades we’ll double again, and again, and aaugh, we’ll all die when there is a huge shortage in the year 2040!!”.

What they are missing is things like the acceleration of the solar panel – scientific novelty in 1954, widespread on every kid’s calculator in 1990, expensive but powerful system to power a house in 2000, affordable and widespread on millions of rooftops in the US southwest in 2011… dirt-cheap and the only way anyone gets power for anything in the exponentially near future. (Update, this prediction came true and now I generate more than all the power I consume in my life from a DIY solar array the size of a single car parking space)

And even my prediction will quickly sound hokey and old-fashioned because I can’t predict what unforeseen things will be invented the next few decades.

And now, finally. Getting back to the point for our students:

Because of this exponential change, our world is awash in almost-new consumer products. The hottest ones are in the stores, and the hottest ones from just a few months ago are abandoned in people’s drawers and garages. You almost NEVER need to buy anything new, because you can have an almost-new item for 25-50% of the cost out of one of these drawers. People are so accustomed to buying new things, that they are willing to almost give away their used things even when they are barely used.

In the 1980s, this type of shopping would be less fun: people kept their fridges until the handles fell off, and their Sony cassette Walkmans weren’t obsolete until years after they were bought and they started eating tapes. You’d replace it with a slightly smaller cassette walkman that had been upgraded to include red plastic instead of black. Cars had shorter, more maintenance-intensive lifespans. And there was no Craigslist, so moving used goods was a costly and time-consuming thing to attempt.

But today, and increasingly so in the future, we have reached a point where a rational consumer should see very little difference between new and used things – and you, rational consumer, should be buying very little new product.

I actually value used items more than new ones, because I like the idea that I prevented one new item from being manufactured in some toxic factory in Beijing. In the grocery store, we willingly pay more for Organic, Green, and Recycled things, but buying a used car, or fridge, or shirt, is actually cheaper than a new one even though it is much more friendly to the Earth!

I admit that I still buy new things occasionally, but only after working through this set of steps, which you can adopt too:

1. Feel desire to purchase new product: “Man, I sure want a minivan for my construction business!”
2. Analyze why you want the product – and if it would actually make you happier given your already-lacking free time: “I want the van because it will help me carry more tools and make me efficient. And I could use it for family vacations too.”
3. Try to shoot holes in your analysis: “I already have a borrowed rusty 1984 Nissan pickup truck that carries the tools just fine. Besides, if I buy a van, it will drain away the very money that I have been trying to earn. I’ll have to work more just to have this work van!”
4. Try to delay purchasing the product until after several milestones: “OK, I do need the van eventually, because the truck is taking me hours each week to load and unload due to limited capacity. But I’ll wait until after the new year, maybe even until spring since I won’t be working much in the winter anyway.”
5. If the desire to purchase persists, start shopping for the item on Craigslist. Find the best deal, and only once you have enough cash on hand to buy it with no loans, and without compromising any of your other money goals, go ahead and buy it.
6. If no suitable items come up on Craigslist after several weeks/months of searching, you may consider buying it New.

When I first wrote this article in October 2010, I was still not quite to step 5 with the van, and I would never get to #6 since there are plenty on Craig’s. But in February 2011, I eventually did make the purchase, and I was content knowing that I got what was somebody’s $32,000 dream luxury van in 1999, and is really amazingly close to being as useful as a 2011 van.. for the pocket-change amount of $4800.

Eight years later, this van has crisscrossed the continent with large loads of people and camping gear, and helped me complete hundreds of thousands of dollars of construction projects. And it’s still in superb condition, aside from some bleaching from the relentless Colorado sun. It was a great buy, and the satisfaction of its frugal origins just makes it even better.

That’s life on the trailing edge!