avoiding churn

I found this excellent post at reddit and felt I really want to see this space grow here:

According to Millionaire next door author, Millionaires tend to marry once, stay in the same house for 20 years, and not be active stock traders.

The tl;dr for this would be that if you want to acquire wealth, AVOID CHURN. A divorce will require lawyering up paying courts etc. Then there is the new marriage to pay for. When you buy a home, there are realtor commissions, loan fees, inspections. When you sell, there are more fees not to mention the additional costs to get your home ready to sell.

If you buy a pan to cook with and only keep it for 3 years, when you buy another pan, you pay nearly 10% in sales tax.

One of the main secrets to being frugal and acquiring wealth is making good choices to begin with, but just as important is being content with those choices for long periods of time even though the grass may look greener on the other side.

What ways do you avoid churn in your life?

paul wheaton wrote:
If you buy a pan to cook with and only keep it for 3 years, when you buy another pan, you pay nearly 10% in sales tax.

Cast iron, cast iron, cast iron!   

Yeah, I was thinking about the cast iron skillet article too.

I'm thinking that my recent stuff about  buying a new laptop is, in a big way, about avoiding churn.

paul wheaton wrote:
I found this excellent post at reddit and felt I really want to see this space grow here:

Saw that on reddit as well.  It's a good topic, and seems like a subset of the "be happy with what you have" mentality.

There's also a good point to be made that when churn is inevitable - such as when you car or computer finally kicks the bucket - *that* is your best opportunity to buy quality and purchase something that will last.  But, when that time comes, we're normally too frazzled and stressed to make a sound decision, and we often go with the easy route, and we fail to properly research or shop around for price. Seems like a good example of when to stop and use protracted and thoughtful observation rather than prolonged and thoughtless action.

I like the idea of avoiding churn but frugality ought to have a more immediate pay off, I'm thinking, if it's going to be a lasting choice.  I recycle and do all these home-made/hand-made, repurpose-y things because I enjoy it.  And even though I enjoy a frugal lifestyle--and in doing so avoid 'churn'--, some choices are challenging because frugality often makes people feel pity for me (do you need money??) or chastened/angry by my choices (give it a rest you eco-nag and buy 'x' already--it's only $3 bucks!).  The main message that gets reinforced these days is buy, buy, buy!  Don't produce! Don't save!  Just consume!! And worse, if you're not consuming, you're not...as good as the rest of society.  The new iPhone ad perfectly captures that buy-buy-buy message and opens with "if you don't have the new iphone..." You can fill in the blank with all the ways you're considered out of step, out of touch, unhip, un cool.  The bottom line for me is that avoiding churn is good and anything that encourages more people to choose frugality is a grand thing.

Man! I can't agree more abut churn, and frugality in general. If you listen to conventional financial advisers they tend to point you toward having big accounts of both assets and debts (preferably managed by them and profiting them). I bought their story up till a few years ago. In 08 I canceled my 401k contributions & moved my savings into precious metals (just in time to avoid the stock market crash). I took the money I was no longer sending to wall street each month, and over a few years I paid off my mortgage. Now I'm debt free. I ran the numbers the other day and found that I'm living comfortably on only about 30% of my take home pay. Most of the rest is going into savings.
Money is still taken out of my check each month, for programs that promise they will pay off for me in the future. I don't buy it however so I've done what I could to minimize those deductions and took charge of my own financial future.
Another big money saver was avoiding marriage. As a young man I saw friends and coworkers thrown out of their homes, nailed with crippling debts and child support payments. It made me a bit Leary of the whole marriage thing. I'd also look at the single guys VS the married guys and I have to say (with a few exceptions) the single guys seem happier, far less stressed out, more energetic, far less tired, they have far more money and seem much more hopeful for a good future. About 16 years back (age 30), after weighing the pros and cons I decided to skip the whole marriage thing, and so far I don't regret the decision. The only way (I can see) to avoid a horrible destructive divorce with certainty is to opt out of marriage. In another time and place I would have made an awesome husband and father but in this environment it's just too risky.

@greenthumb - per your $3 comment - I wholeheartedly agree that all those little, "oh, it's only __" add up like crazy! I just tell people I'm weird and don't choose to do that. It helps a bit that I'm an accountant so people expect me to be frugal. (Though I'm still not nearly as frugal as I'd like to be.)

It's about choice. I get tired of folks who say "I can't afford that" when really, SO much of how we spend our money is choice. It's more empowering, too. You're deciding what you want and where your priorities are. That's a doable thing at almost any income level.

Amen on the cast iron! I have several pieces that get almost daily use, my favorite being a skillet I got from my aunt, who got it from my grandmother. The thing is probably 100 yrs. old and has a cooking surface like glass.

The only problem I have with my cast iron is that I can't decide who's worthy to get them in my will. 

For me it's not even about all the $3 purchases adding up, that cheap item represents so much hidden cost that is paid out elsewhere but ends up costing you just the same! Nothing is really worth that little, the rest of it's inherent value is being taken from somewhere and that is not frugal or bargain anything.
I have to say though, I packed up a couple of tote bins of too-big clothes for my kids the other day and wonder about the value of storing them until they fit. Really, it's all from the thrift store and can be purchased again for very little money, plus clothes come into our lives from friends with bigger kids all the time. Is it more costly to have to rent a space that is big enough to store this stuff or to buy it from a second hand shop as needed? I am thinking the latter.

My cast iron is rusty. My solution? Just don't cook! Saves on electricity too, lol.

Several years ago, a friend's sister was getting married, and my friend didn't have a suit to wear.  He couldn't justify the expense for something he would only wear one day.  He walked into the local dry-cleaners, and explained his situation.  They had several suits that they had cleaned, but nobody had returned to pick them up.  He found one that fit (fairly well), paid the dry-cleaning bill and walked out with a nice suit.  The dry cleaner had a back room full of clothes that had never been picked up.  He now does a lot of his shopping there.  He and the dry cleaner are both very happy.

John Polk wrote:
Several years ago, a friend's sister was getting married, and my friend didn't have a suit to wear.  He couldn't justify the expense for something he would only wear one day.  He walked into the local dry-cleaners, and explained his situation.  They had several suits that they had cleaned, but nobody had returned to pick them up.  He found one that fit (fairly well), paid the dry-cleaning bill and walked out with a nice suit.  The dry cleaner had a back room full of clothes that had never been picked up.  He now does a lot of his shopping there.  He and the dry cleaner are both very happy.

That's possibly one of the coolest frugality tips I've ever read.

In high school I bought a tuxedo for prom off of eBay.  It lasted me through at least 4 dances, and it cost the same as a one weekend rental. So, spent $100, saved $400.  Not quite the same, but it was a big win I thought.

    As part of my work I regularly check new building permits at City Hall. Those applying for permits come in two varieties. One. Large development companies with deep pockets. Two. Married couples who are getting along well and not planning to split up any time soon. Occasionally someone else builds a house but it's a rarity.

cast iron is great. We do most of our cooking in/on it. The one thing with buying "quality" I have found is that sometimes quality comes with a lower price tag than second best. This is really true with "value added" (I think of a lot of these as value removed) things. Bakeware is one of the worst. All the stores seem to only carry bakeware (sheets, bread pans, etc.) with the value added coating that costs very little to add but allows the price to be increased much more than the value of the coating. I don't want the coating (poison) which would cost me to remove it. So instead of paying $8 for one of those, I look for tossed (rusty is not too hard to clean), used ($1 or less each)... or the dollar store which has cheap uncoated stuff.... oil, it and it lasts forever. There are a number of things where I have found better things for cheaper and the dollar store seems to have the best selection.

Computers... I hate to say it, but buy the cheapest one... they are all junk just waiting to happen. Even custom they are generally made from the cheapest components. It only takes one sour cap to make the whole broken. They are not impossible to fix... but MB repair is not worth it. Power supplies are worth replacing though... and the one place buy pricey seems to be valid is keyboards. Key boards with real switches cost a lot, but last forever. I have one that has been through 20 to 25 years of computers. If you have an older computer that seems to work well, but seems slow... has viruses.... Put a linux on that is made for older machines. Look for software that uses less resources... there really are some good low foot print browsers out there... Dillo can access most sites just fine... doesn't do videos and such, but for reading content it is way faster than firefox etc and often renders graphics better than IE. Even firefox allows one to turn graphics off.

I don't know if there are industrial grade laptops out there worth looking at or not. they generally start around 5K. They tend to take drops and water a lot better and have better key switches. They also weigh more (metal case). I'm not wealthy... I have limited money it seems better to accept some churn in some things so that I can buy long lasting in other places... Hand tools can last a life time... even the best computer at any price is dead in 10 to 15 years... if it is older and still working... have you tried to run any newer software on a 386? Your time is better spent elsewhere. How soon before the 486 (very common only 10 to 15 years ago) is no longer supported... oh, M$ already doesn't support it... or even the old pentiums.

This link is to a 3.5 minute movie introducing an idea called "the Blue Economy".  Some of the things they describe are permaculture ideas of layering systems to get the most value from each action and also avoiding waste or churn. It is so exciting to see that people everywhere are thinking of ways to stay 'on the land' and do it efficiently. Here's the video link:

One kind of churn is buying a 'quality' replacement before the crappy thing you already have wears out.

I try to make do with what I have, but I'm also always asking myself if and how it fails.  Where does it tend to fray, unravel, shred, crack, lose its edge, become brittle, bend, snap, etc? Is it a result of bad design, shoddy construction, or poor materials? 

Does it require a lot of maintenance? Why?

Becoming aware of how things wear out or break is a good way to be prepared to buy quality when the time comes.   Not only can you have more time to research what true quality looks like, you can also do some deliberate planning and saving for an expense you can see coming.

Sometimes, when I contemplate things along these lines, I discover that what I have is good enough for my purposes.  I don't really need the 'quality' product.  Maybe all I need to do is apply a fresh coat of paint every now and then...

P.S.,
I love my cast iron pans too.  But I also love the stainless steel pans (All Clad) I bought more than ten years ago.  They're quicker to heat up (and cool down) than cast iron, and that gives me more control over my cooking.

But I will never ever again buy one of those cheap teflon-coated skillets.  I've never had one of them that didn't get all scratched up after a single year.

P.P.S.,
As far as electronics goes, I've learned to be more wary of the mechanical, moving parts than I am of the actual electronic bits.   Once you get past the "infant mortality" period where problems with the actual electronics get shaken out, it's the switches, hinges, plugs, etc., that seem to be where these products are most likely to wear out first.  (This includes hard drive failures.) 

For example, I had a tablet PC whose screen was mounted with one rotating hinge at the bottom.   The idea was that you could pivot it and fold it down on top of the keyboard to use it in tablet mode, or you could swing it up and configure the PC to use it like a normal laptop.  The problem was that the single, central pivot didn't provide enough stability: the screen would wobble slightly from side to side, and with time it got looser and looser.  Eventually it broke.

Another example: every laptop I've ever used eventually developed a problem where the power socket became loose and would no longer provide a solid connection when I plugged in the AC power adapter.  The usual design doesn't seem to provide enough strain relief to deal with the way these devices are commonly used.  It would work well enough if no one ever moved their laptop after plugging them in, or never tripped over the power cord. (Apple seems to have solved this problem with their magnetic plugs.) 

P.P.P.S.,
Every time you throw something away or see something thrown away is a good time to ask these questions about what makes things more or less durable.  A trip to the city dump or secondhand store can be enlightening!  

Corky wrote:
One kind of churn is buying a 'quality' replacement before the crappy thing you already have wears out.

I try to make do with what I have, but I'm also always asking myself if and how it fails.  Where does it tend to fray, unravel, shred, crack, lose its edge, become brittle, bend, snap, etc? Is it a result of bad design, shoddy construction, or poor materials? 

Does it require a lot of maintenance? Why?

this means making sure a "quality" replacement is not just more expensive. Great advice.
Just because I am willing to spend more, doesn't mean a manufacturer wants to make something last longer... it is better to add more buttons and whistles for that extra money. No manufacturer wishes to make something last forever. Possibly looking for industrial grade things, where daily use is expected to be the same in a few months as a lifetime in home use, might work. Also products where the market is growing so fast the maker can make good stuff because they can not make enough for the demand.

Sometimes, when I contemplate things along these lines, I discover that what I have is good enough for my purposes.  I don't really need the 'quality' product.  Maybe all I need to do is apply a fresh coat of paint every now and then...

And not to forget the dollar store and the second hand store. I find "better" products for less at both of these places.

P.S.,
I love my cast iron pans too.  But I also love the stainless steel pans (All Clad) I bought more than ten years ago.  They're quicker to heat up (and cool down) than cast iron, and that gives me more control over my cooking.

But I will never ever again buy one of those cheap teflon-coated skillets.  I've never had one of them that didn't get all scratched up after a single year.

I have only a few stainless pans I use as most don't work with our induction hobs. Oh, and we use some for camping too. My Yf complains that stuff sticks to the stainless but not to the cast.

Coated pans (of any type) are toxic both to the air and the gut. (my opinion) Used ones that have been burned and scraped/sanded/brushed are ok.

P.P.S.,
As far as electronics goes, I've learned to be more wary of the mechanical, moving parts than I am of the actual electronic bits.   Once you get past the "infant mortality" period where problems with the actual electronics get shaken out, it's the switches, hinges, plugs, etc., that seem to be where these products are most likely to wear out first.  (This includes hard drive failures.) 

Yup, I can get systems with good keys... hard disks are a problem... flash memory although more robust, only rewrites so many times.... so disks with moving parts is what we have. CDs... rewritable or otherwise last less than ten years. So what to do? Windows generally makes sure people are upgrading the hardware long before any of it dies.... But my 10/15 year old server died a month ago... power supply died. The drive was half gone too... I could only use 3G of 6. Still it was free from someone upgrading And the p300 was better than the dx66... also free.

P.P.P.S.,
Every time you throw something away or see something thrown away is a good time to ask these questions about what makes things more or less durable.  A trip to the city dump or secondhand store can be enlightening!  

Great advice! I haven't been doing this that much... spending more time looking around to see what I can do without. Now, to balance the two.

Just one example -- I had a pressure canner here that belonged to my grandmother and had seen many years of use.  It was, and is, still in good condition, but it has a rubber gasket which needs to be replaced every few years.  I happened to come across a pressure canner which seals without a gasket at a yard sale (paid $10 for it, and found new ones of the same kind for around $150!).  This one is also old and has seen many years of use, but it looks and works good as new, and will never need a gasket replaced!  I'm not getting rid of the old one, but if, someday, gaskets become unavailable, I'll still be able to do some pressure cooking/canning.  (As long as I can get lids for the jars!!)

Kathleen

I just watched a documentary called "Objectified", about industrial design.

At one point in the film, one of the designers being interviewed mentions that the really hard thing is to design something that actually gets better with age, as opposed to gradually falling apart and becoming unusable, or even simply lasting a long time.  He gave the example of his grandfather's leather briefcase, and the way its material had become so marvellously supple after years of use. 

The film then cut to another designer firing up an old Chevy truck.  Yeah baby!   

Some buildings age gracefully, others become an eyesore.

Cast iron pans definitely get better as they are used.

And permaculture, of course, is all about designing landscapes that become better with age.   

Can you think of any other things that fit this description? 

I can think of lots of things that last and that I've used for years (my favorite wool sweater, a set of Picardie glasses, a drill brace I inherited from my father along with miscellaneous other hand tools, and a set of history books by Will Durant)  But although they're layered with many fond memories, I'm not sure I can say they've physically improved.

I'm not a musician, but I've heard that some violins, for example, are like this.  Their tone improves as they age.

Corky wrote:
I'm not a musician, but I've heard that some violins, for example, are like this.  Their tone improves as they age.

Guitars are like this, though it depends on the wood the sound board is made from. My Simon & Patrick from Quebec, has a cedar top (my choice) and the aging happens quicker because cedar is soft. It may over age at some point mellowing to mushy. I bought it for contrast to my wife's guitar with the spruce top, hers will take longer to age and has a crisper sound. I tune mine down two semis as my voice works better that way... also my pickup covers part of the sound hole which lowers the body's resonant frequency so the lower tuning matches quite well.

Plywood guitars do not age.... they don't sing either. My first guitar was a plywood guitar. It sounded pretty good ... but when I picked up the one I have now, the whole body sings.

The finishing makes a difference... I have a Yamaha 12 string I got in 1981 with a spruce top... it doesn't seem to age. I think it is because the finish is so thick. It looks nice, but my cheaper guitar with thin matt finish sounds way better.

I hear Listers get better with age... Old Harleys are nice too.

I hear Listers get better with age...

For some reason I read that as listers = people on the list or forum, and thus permies.

Yeah, hopefully we get better as we age too. 

Kathleen - you can find reuseable lids now.  I saw them at Lehman's, and I'm sure they're available elsewhere.  They're new, so the bugs probably haven't been worked out yet.  I plan to buy some in a few years, after they've been out a while and the design has really been nailed down.

WildIrishRose wrote:
Kathleen - you can find reuseable lids now.  I saw them at Lehman's, and I'm sure they're available elsewhere.  They're new, so the bugs probably haven't been worked out yet.  I plan to buy some in a few years, after they've been out a while and the design has really been nailed down.

I've seen those reusable lids, and have wondered how reliable they were.  I think you are right -- best to wait a few years until they have a track record.

Kathleen

Me too, Denise.

I'm a bit of a pack-rat and have a garage full of stuff I couldn't bring myself to throw away, because it wasn't obviously worn out and it seemed like it  might be useful someday.

I'm still waiting for the aha moment when I find a use for an empty dental floss spool.  I'm sure it will come, because those little boxes are just too elegant in their design...

Kathleen Sanderson wrote:
I've seen those reusable lids, and have wondered how reliable they were.  I think you are right -- best to wait a few years until they have a track record.

Kathleen

Not sure if these are the ones you have seen at Lehmans:
http://www.reusablecanninglids.com/

ordered a batch recently.  they come highly recommended by folks who use them.  I'll find out soon!

  As I understand churn, it has to do with the cost and inefficiencies of constantly switching. Whether you're constantly moving up to a different cell phone  plan or regularly become dissatisfied with your apartment or neighbors which causes you to move quite often ,there are costs associated.

    In the advertising world it's important for them to present us with a huge array of product and services so that we may become enamored with those products and make a purchase. But in order for this to be effective we must also become dissatisfied with competing products and services which we already own.  So many of the ads are designed to make us unhappy with everything from our haircolor to our home insurance policy since this dissatisfaction is likely to lead to a switch or we could say it leads us to embrace further churn.


     The whole idea that women's clothing styles change every year is a product of advertising based dissatisfaction. In northern Canada many of the elderly Inuit women seem completely immune to these ads when it comes to clothing for extreme winter weather. They wear the same stuff that their mothers and grandmothers wore and since styles don't change, they don't end up buying a new coat every winter. Although they may own a very high quality set of caribou parka and snow pants with polar bear mukluks and mittens which is worth several thousand dollars on the open market, these items are cherished possessions which can last for decades when well maintained. These items are custom fit often by relatives who specialize in their manufacture and the owner would be considered a fool if they parted with perfectly good winter gear.       A stylish woman in the much milder climate of  Vancouver where ladies tend to follow the latest trends is likely to spend much more on winter clothing during her lifetime than these frugal women from the Arctic. They are often seen huddled together at bus stops trying to stay warm in clothing that was designed to make them look good rather than to keep them warm and dry. Sometimes it is a fine line between looking stylish and just looking dumb.

    Men tend to be drawn to vehicles which they don't need. Any ad that tells you they've reinvented the pickup truck is a lie. My 1980 truck does exactly what a brand-new one does. It moves things from here to there. I may not look stylish but I've had the thing for years and have thus avoided churn.

    I know a few guys who have experienced major problems, because they can never be satisfied with the women they've chosen. This sort of churn can cost hundreds of thousands every time you switch. Za Za Gabor once joked that she was one of the world's best housekeepers. "Every time I get divorced, I keep the house".

    I have known several young couples who determined that they were going to make their fortune by flipping houses. The plan expressed is usually quite similar. Buy a house which needs minor cosmetic work such as painting and rejuvenation of the landscape and then later sell it for a huge profit. Sometimes these plans were influenced by late-night television ads which promise great rewards in this field.

    Some of them made money when we were in a quickly rising real estate market and as people tend to be very proud of the work they've done, it would be easy to attribute this increase in wealth primarily to the improvements made to the property. In reality, much of the increase was simply due to market forces.

  During periods of stable prices many people who try this lose large amounts of potential gain to churn. I'm in a marketplace where an average home sells for about $550,000. It is not uncommon for a transaction of this value to cost $20,000 or more for real estate fees, lawyer fees, land transfer taxes, home inspection reports, appraisals etc... So if you do a real bang up job painting the interior, caulking all the windows, replacing the gutters, upgrading insulation, and replacing any number of other components and somehow managed to make the home worth $40,000 more than the purchase price plus the cost of all of these renovations, the actual increase to the homeowner is $20,000. Half of the net increase was eaten up with churn.

    This means that you made exactly half as much per hour spent on the project as you would have if all of these paper costs did not exist. I have a friend who specializes in major upgrades to homes in this market. He doesn't touch a house unless it is one that warrants more than $200,000 worth of improvements. This usually means lifting the house to create basement apartments, subdividing and creating a duplex or some other major undertaking which is beyond the skills of your average house flipper. Even with these major projects 10% of the total increase in wealth is eaten up by churn when he sells the units.

    That's why I believe that for the vast majority of us it makes sense to purchase a property where we truly wish to live and then only make improvements that suit our personal needs. With these speculative renovation projects people often do expensive things which are not necessarily important to the new buyer. Time and resources are wasted in vain attempts to beat the market.

  I'm sure there are many who have done well with housing deals in the past and I include myself in this group. But in today's rather flat market I'm not going to try anything which is likely to put a large percentage of the fruits of my labor into the BOTTOMLESS PIT OF CHURN.

paul wheaton wrote:I found this excellent post at reddit and felt I really want to see this space grow here:

According to Millionaire next door author, Millionaires tend to marry once, stay in the same house for 20 years, and not be active stock traders.

AVOID CHURN.

If you buy a pan to cook with and only keep it for 3 years, when you buy another pan, you pay nearly 10% in sales tax.

What ways do you avoid churn in your life?

I agree.  We need to focus not just on being frugal but considering quality and longevity as well.  Unless you NEED and I do mean NEED it right now save for high quality and longevity as well as lifetime guarantee replaced products if they are worth it.  We need to get back to buying quality that last or making it and passing it to our children so they can be a little bit ahead of the game and not have to buy, buy, buy and consume like crazy!!~!