Does this count as an audio purchase?

**madmax** · 08-09-2003 09:32 PM

My garbage disposal quit today after 13 years. The typical yuppie would have called for service and had their $70 unit replaced with a top line $190 unit, paid a $60 travel call and paid $80 for the actual installation. $330 spent. I took the time and found a $189 upgraded unit for $110 including a sale and some coupons and went home and put it in myself in about 15 minutes for nothing. $110 spent.

Question: Does this mean I now have $220 free and clear to spend on audio equipment without having to qualify any expenditures to myself? I think it does...

madmax

**RuSsMaN** · 08-09-2003 09:33 PM

Abso-friggin-lutley.

Couple Coral 1m?

Cheers,
Rooster

**HBombToo** · 08-09-2003 09:36 PM

agreed

**madmax** · 08-09-2003 10:44 PM

woo hoo! now that is the kind of answers I'm looking for! So even doubling that amount is almost reasonable, considering my hard work???
madmax

**brettw22** · 08-09-2003 10:45 PM

Since you had to discount the price with some coupons, add that into the mix so you get the $220+coupon savings. Just because you saved it on the price of the disposal, doesn't mean that you take a reduction in audio expenditures.........

**madmax** · 08-09-2003 10:51 PM

Originally posted by brettw22
Since you had to discount the price with some coupons, add that into the mix so you get the $220+coupon savings. Just because you saved it on the price of the disposal, doesn't mean that you take a reduction in audio expenditures.........

If you calculate everything I think I already considered the coupons but I'll go with your momentum. I'm thinking I have over $400 to spend at this point? Lets go shopping!
madmax:D

**brettw22** · 08-09-2003 11:02 PM

If there's one thing that I do extremely well, it's shopping (it's in the genes). I'll be more than happy to help ya spend the money.....

**burdette** · 08-10-2003 12:35 AM

I assume you have a wife, or this wouldn't REALLY be a question.

It'll work for awhile. Then she'll realize you're handy and that that is one of your good traits.. and she can talk you up around the fire to the other females, so when you come back from the hunt she can look around at all the other women and smile knowingly, as you grab her by the hair and drag her off, grunting in anticipation.

Way to go, by the way, at doing it yourself. Fortunately or unfortunately, my wife now knows that I'm pretty damn serious if I whip open the yellow pages.

Even on the easy jobs, be sure to mumble a few words now and then about how hard it is.

**madmax** · 08-10-2003 07:55 AM

Originally posted by burdette
I assume you have a wife, or this wouldn't REALLY be a question.

I don't have a wife but it really is a question. It all comes from the fact that I have explained my theory to people (who are married) and they look at me like I'm crazy or something. I was just wondering if anyone else thinks this way.
madmax

**petrym** · 08-10-2003 03:44 PM

ummmmmmmm, no. ;)

**Frank Z** · 08-10-2003 08:40 PM

Yep! $220 for upgrades and an additional 10% for using coupons! :D

**Ron-P** · 08-11-2003 11:27 AM

You had it easy Max...I spent Saturday retileing the masterbath room floor, installing all new compression fit shut-off valves for the toilet and sink, re-installed the toilet, installed a pedistool sink and faucet.

The best parts, no leaks and no paying someone else to do it.

Peace Out~:D

**ken brydson** · 08-11-2003 11:46 AM

When you figured your labor cost, did you account for the fact that it was Saturday. Premium pay for weekends. Add a few more sheckles to the upgrade fund:)

**dorokusai** · 08-11-2003 11:48 AM

Actually, that amount of savings, adds up to well over $2000.... ;)

**burdette** · 08-11-2003 12:39 PM

If you're asking a serious question... then I think the answer depends on whether you use a budget. If you have a budget in place and a certain amount allotted for home repairs, then I'd think whatever you don't spend is free game. Of course, next month you may end up going over budget.

Otherwise, from a capital investment cash-flow perspective, no, you don't have any 'right' to buy anything. You made a choice about the repair and spent what you had to spend. That money is gone.. considered a sunk cost. Decisions about future purchases must be made in their own right. Do you or don't you, at this moment, have the cash/ability to make THIS purchase. Past purchases are irrelevant.

A real-world example that I give my students that sort-of illustrates the concept of sunk cost is a buffet restaurant. The new "investment" decision isn't a future cash flow, it is how you feel (different from your case in which the future cash flow really is a cash flow). Deciding to stuff yourself beyond what you'd usually eat in order to get your 'money's worth' is flawed logic because the money is gone, you've already committed the cash and can not get it back. Once you've paid the entrance price and can not retrieve it, then your next investment decision, i.e. how much to eat, should be based only on how you want to feel when you walk out.

Maybe an example that is easier to 'see' is if you have a car that is a money pit. Each time you face a repair on the car, you should consider ONLY one thing.. how much utility will I get from the car if I spend *this* money. To think ".. ah man.. I HAVE to have this transmission fixed because I just spent $500 last month to have the engine repaired." False. The engine repair is a past expense, you have zero control over that cash and cannot get it back, therefore it is irrelevant to the current decision. A lot of people spend money they shouldn't spend because they bring sunk costs into the decision process. Wrong wrong wrong.

**HBombToo** · 08-11-2003 01:01 PM

Originally posted by burdette
The engine repair is a past expense, you have zero control over that cash and cannot get it back, therefore it is irrelevant to the current decision. A lot of people spend money they shouldn't spend because they bring sunk costs into the decision process. Wrong wrong wrong.

This is not entirely true when considering a business plan. Trending past information regarding expendatures is vital on eliminating inefficiencies of that business plan. An immediate change to the business plan "CAN and WILL" in the long run save capital or make the business plan that much more robust.

This year alone I have adjusted the capital needs of my department almost every month and we saved quite a large sum for deloyment elsewhere. The efficient use of capital now will save you in the long run.

HBomb on business;)

**burdette** · 08-11-2003 01:28 PM

Originally posted by HBombToo
This is not entirely true when considering a business plan. Trending past information regarding expendatures is vital on eliminating inefficiencies of that business plan. An immediate change to the business plan "CAN and WILL" in the long run save capital or make the business plan that much more robust.

This year alone I have adjusted the capital needs of my department almost every month and we saved quite a large sum for deloyment elsewhere. The efficient use of capital now will save you in the long run.

HBomb on business;)

Absolutely good decisions NOW can and will affect the future, possibly saving you money in the long run. And, using past information on expenses to budget is valid, and I don't believe it violates the concept of sunk cost. I think that is different from using past expenditures as *justification* for current expenditures. Justification for current expenditures should be based on potential future benefit.
And of course, your obligation to continue to serve must be considered. A hospital can't avoid a cost regardless of history if it would impair its ability to continue to provide service. And you've an obligation to keep the system up and running.. as witnessed by how you spent your Saturday. You're just getting cocky because your TV is bigger than mine. We'll have to discuss this over beer whilst the wives shake their heads' and say "what are they talking about NOW?"

**HBombToo** · 08-11-2003 02:28 PM

Originally posted by burdette
Justification for current expenditures should be based on potential future benefit.

I agree 100% with this.

Originally posted by burdette

We'll have to discuss this over beer whilst the wives shake their heads' and say "what are they talking about NOW?"

I can't waite and my wife shakes her head continuously no matter what I say.. You saw that first hand :D

HBomb

**madmax** · 08-11-2003 03:09 PM

Originally posted by burdette
I think that is different from using past expenditures as *justification* for current expenditures. Justification for current expenditures should be based on potential future benefit.

What about past SAVINGS as justification for current expenditures which I think is more in line with my question?

Maybe the question is really "was it a savings over what I would have spent or an expenditure over what I expected to spend?

I like the car analogy. Personally I figure out what the car is costing me monthly (on maybe a 12 month average) and if it is more than the payment on another then I dump it.

madmax

**burdette** · 08-11-2003 03:23 PM

I guess what I'm saying is.. either you have the money for the audio purchase or you don't. You spent $110 on the plumbing fix... if you want to look at this the other way, you could have just gone without a disposal, which means ANY money you spent over what it cost to just put in pipe was too much, and you didn't save anything.

Doesn't seem like you should focus on phantom savings, rather look at money spent and money left. I know, I know.. this isn't the fun part.

Just forget all of this... the top Insinkerator commercial is $2500.. probably couldn't justify that.. next commercial is $600.. and it is so pretty... so your $330 estimate is way too low from the start. Plus, assume the plumber forgot a part and had to leave, adding at least an hour to the time. And when he first looked under your sink he whistled and said "wow.. haven't seen a connection like this before... what the hell IS that anyway?... hey, buddy, call my wife, tell her the vacation is back on."

**Double_S** · 08-12-2003 01:01 AM

:D :D Just the way I would see it. More $$ fo the home theater:)

**gidrah** · 08-12-2003 02:13 AM

And one thing you may have not considered is that anything you purchase will still be a liquidatable asset. If you make wise investments you aren't actually spending any money other than any interest you would've earned and any depreciation of said equipment. You could actually consider this as seed money with the intent of buying low and selling high. If it doesn't work you could right it off as a loss on your taxes.

BTW, that must be one hell of a disposal. Are you sure you didn't install a chipper?

**madmax** · 08-12-2003 11:50 AM

Sounds like gidrah has me figured out. I've done that!
madmax

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