Beginning around high school, one of my major core values was paying the least possible amount for everything. I was always trying to figure out how to get things for massive discounts or to orchestrate some complex trade so that I got whatever I wanted for free in the end. I got so good at it that my first real income-producing business was in high school when I was buying and selling Palm Pilots and Apple Newtons. I started that business with the purchase of a $70 Newton and never invested more outside money into it.
Being frugal can be good. At it’s best, being frugal is the practice of deciding whether you actually need something or not, whether it will be worth it to you, and carefully stewarding your money. Most people should probably be more frugal.
Over time, however, I realized that my frugality had turned into something different. I felt as though I didn’t win unless someone else lost. When I went to a buffet, it was important to me that I ate so much that the casino lost money on me. Either I was the sucker or they were the sucker, and I didn’t want it to be me. One of the best things at the Bellagio buffet was the pesto mashed potatoes, but I would only allow myself tiny amounts of them because I didn’t want to fill up on cheap potatoes.
My business immediately after the Newton trading business was professional gambling, which was very much a win-lose situation. The casinos were trying to force me to lose and I was trying to do the opposite to them. The experience of being a professional gambler was very valuable to me, both financially and mentally, but I wonder if it helped ingrain into me that idea of not wanting to enrich companies.
I’m not sure what changed my mind on this. Maybe it was just a natural product of maturation, maybe it had something to do with me selling things to people, or maybe I just became less poor and had the luxury of not having to fight for every penny.
I first realized that I had changed when my second favorite teashop in Budapest, Marumoto, shut down. I loved that place and it provided so much value to me, actually increasing the amount that I enjoyed Budapest by at least 5-10%. That’s a lot for one little tea shop! When they announced that they were shutting down, my first thought was that I would have happily paid double their prices if they would just stay open. I even talked to a local entrepreneur to see if he would help me run the tea shop if I bought it, thinking I could probably buy it pretty cheaply and just run it at break-even. To this day I think about opening a Japanese tea shop in Budapest just to recreate the magic of that place (and maybe even improve upon it!).
I subscribed to my first Patreon a few months ago, which is the ultimate example of unnecessarily paying for value. It’s just a few dollars a month, but I like the idea that if a bunch of us pay, this open source developer can have more freedom to work on whatever he wants. Subscribing made me want to find other Patreons to support. (Side note, people always tell me that I should start one. I used to not like the idea but now that I’m on the other side of the equation I’m considering it.)
A while back I was listening to a podcast and the host was talking about his friend who owned a mechanic shop. It was an expensive shop that was known for doing really good work. He had his guest guess how much money his friend made. The answer? About $85,000 a year. That’s a good income, but that’s not a ton of profit per customer. Due to how capitalism works, most things are priced not far from their value. If car repairs are expensive, that’s because it costs a lot to make car repairs, not because it’s an easy way to rip people off.
Earlier this year our boat needed a whole new engine, which cost about $10k. It sucks to have to replace an engine, of course, but I noticed that I didn’t really mind paying for my half of the repair. The marina pulled the boat to the dock, trailered it, brought it to their repair shop, replaced the engine, and then put it back in the slip when they were done. Instead of focusing on the cost, I focused on the value. I couldn’t build an engine. I couldn’t even get the old one out (in fact, thinking about it more, I have no idea how they pulled such a huge engine out through the hole in the deck). And on top of all that, I didn’t even have to go down in person once to deal with it. That’s a great compilation of value, and I’m happy to pay it.
I’m still frugal and I still like to get a good value, but now I want the person selling the good or service to me to get a good value, too. I pay for more services now and I feel better buying things than I used to. I think of it as collaborative– I’ll buy this product so that the seller is incentivized to keep doing what they’re doing and maybe even make better things down the road. Maybe everyone reading this already thinks this way, but it took me a while to get here and I find that it really reduces friction in how I think of spending money.
Photo is of the tea room of the tea school in Vegas. Classes just started again and I’m really grateful to be able to take them again. Incidentally, it occurred to me during the last class what an incredible value those classes are.