For this post, I thought it’d be fun to look at the most expensive things I’ve ever bought in my life. By listing them together irrespective of category, I wanted to see the equivalence between different items or categories of items, and the opportunity cost of my dollars. Is a luxury item really the same cost as a household appliance? Let’s find out! Note that I’m counting physical goods only, not services or repair.
1) Six figures: Condo
Two years ago, I bought my condo for ~$250k. The city I live is not the nicest area of California, so the housing costs are not that high (that’s definitely a pro, but there are also cons of this area). My family gave me the down payment (thanks!!) My monthly payments are about $800 mortgage + $200 HOA + $200 property taxes. It’s about $300 less than renting in this area. I probably could’ve waited a year to put the down payment myself, but I’m glad I bought in earlier because the property has already appreciated by ~$30k.
Honorable mention: Although I’m not counting services in this list, I’ve done a bunch of small repairs around the condo. The most expensive was replacing the carpets, which cost $2000.
2) $5000: Car
Another necessary expense! I bought this car used 6 years ago when I was a grad student and got my first summer internship. The location was pretty remote, so I needed a car. I stalked Craigslist for a while but didn’t find anything good, but eventually found this seller on our local college bulletin board. I felt comfortable buying from the seller, because he went to the same college. The car came with 100k miles on it, but has been fairly reliable since then.
Honorable mention: When the AC broke in the middle of last summer, it cost $1300 to repair. The car itself is only worth ~$2000 at this point, but I figured repairing was still cheaper than buying a new car. Again, services are really a huge cost.
3) $1000-5000 level: Chanel bag, Macbook laptop, refrigerator
Laptop: My work basically involves sitting at my computer all day, occasionally punctuated by meetings and visiting the grad students in the lab. This laptop is reimbursed by my research funding, and I basically carry it around everywhere. Couldn’t live without it. Worth it? Totally.
Bag: The Chanel was a gift from my partner before we were married, back when we were first dating. He really wanted to gift me something, so I picked this out, and it was the first luxury item I ever owned. Would he buy the same thing for me now? “Honey, no way, we could buy two Google stocks with that kind of money” 😉
I probably get to use this bag a couple times a year (a few nice dinners, and whenever I travel). It’s definitely not worth it in terms of cost-per-wear, but who the heck cares? I totally enjoy using it!
Refrigerator: For some reason, apartment rentals in my area don’t come with fridges what the heck, right? Apparently this is a thing). So when I first moved in, I spent the first week without homemade food and spent all my time shopping online for a fridge and some big strong men to deliver it to me.
When I moved into my condo, it already had a fridge, argh! I sold that one on Craigslist to a very nice but rigorous family. When they came by to check it out, they left a thermometer and a glass of water in the freezer and came back the next day to verify that it was frozen 😮
5) $500-1000 level: Burberry jacket, smartphone, couch
Burberry trench: This jacket was a gift to myself for finishing grad school and getting my first full-time job. I already had a similar, cheaper trench coat, so I knew this would get a lot of use, especially out here in California where I have no excuse to buy anything heavier. So far, this has turned out pretty useful. I wouldn’t say it’s my most-worn coat, because it is a little fancier than the average Joe around here, but I do wear it regularly.
Smartphone: After I dropped my previous phone, it developed cracks in the screen. I tried in vain to continue using it, but stopped when little bits of glass started falling off and embedding themselves in my fingers I actually waited a month for a particular smartphone model to come out (Google Pixel), and used a dumbphone in the meantime, which was quite the experience and something I’ll blog about at some point.
Couch: It’s a couch. We sit on it every day 🙂
7) $500 level: Shoes, wallet, mattress, dishwasher, TV
At the $500 level, we have a bunch of items. In the household category, we have a TV, mattress, and dishwasher, all of which I consider these fairly useful. I sleep every day, watch TV almost every day, and use the dishwasher ever few days.
In the luxury goods category, we have these Salvatore Ferragamo Vara flats and a Prada wallet. The flats were the result of long deliberation (plus some influence by Franish), and the Prada wallet was a gift. The usefulness? The opposite! I used the wallet all the time, and the flats rarely. The flats ended up being too fancy for my lifestyle, and slightly too small. They’re on the donate list to my mom.
Analysis I: Mostly practical, with a sprinkling of luxury
So, all the stuff from the list above basically falls into several categories:
- Luxury goods
The first three categories I consider as good value and are things I use every day, or nearly every day. Therefore, I consider them as dollars well-spent.
The last category, luxury goods, is probably not great in terms of cost/use (except for the wallet, which I did use daily). Seeing the equivalences in the graphic was pretty fun:
- Chanel bag = Macbook = refrigerator?
- Burberry jacket = smartphone = sofa?
- Ferragamo shoes = dishwasher?
This really nails home the point that luxury goods are, well, luxury. Despite the fact that luxury items are handmade (or at least the Chanel is), the number of person-hours spent on a bag is presumably MUCH LESS than the number of person-hours spent designing a laptop and all the components within. I also use the luxury items less than my electronics or household appliances. So the cost per use is definitely higher. But you know what? I enjoy these luxury items and get a kick out of them whenever I do use them. So I consider the money well-spent.
Analysis II: A pyramid of items
As I was organizing this list of items, I realized they formed a pyramid. At the top, there are a few expensive items. At the bottom, there are a bunch of cheaper items. This makes sense; there aren’t that many super expensive items I need to buy, and I’d rather spend my money on multiple, useful ~$500 items.
I also noticed that the must-have / useful items are distributed equally throughout the pyramid. Housing is a must-have (1st row), as is a laptop (3rd row), refrigerator (3rd row), and a mattress (5th row). This was surprising to me, as I thought the most expensive items would be the necessary ones.
Finally, there are more luxury items in the bottom half of the pyramid. I have one expensive luxury item (the Chanel), and the rest are at the $500 mark or lower. This makes sense, because I can’t think of that many luxury items above the $5000 range that I actually want. (Sorry, not interested in Birkins!)
Overall, this was a fun exercise! It was surprising to me to see the distribution of must-have items throughout the pyramid, and to see the equal cost of a luxury good like a Burberry jacket with a sofa. It definitely makes me think more about the opportunity cost of each dollar.
I might write a follow-up post aboutthe top service and maintenance costs I’ve incurred, if it’s interesting to people. At the top of that list would be college tuition and US immigration costs.
What are the most expensive things you’ve ever bought? Do you get good use out of them?