Everything I own is for sale, ask me and I will give you a quote.
I have to admit that sometimes it is hard for me, but I try not to hold too many sentiments in things, because ultimately, it's the memories with the people that are related to the thing that matters.
Resale value is how much money can you get if you put the item up in the market for sale. The resale value is fair because it doesn't factor any sentimental or functional value, but just how much the next buyer will be willing to pay for.
So just because your house worth 1 million according to the market or your painting worth 10 million just because your mom says so doesn't mean anything until you can find a buyer who is willing to pay that amount.
If the product is illiquid (can't be sold), or you plan to give it away eventually/ do not intend to sell it at all, set the resale value to zero.
Use the purchase price minus the resale value, and divide by the number of times you have used it. That's the utility cost. So utility cost is the cost of usage for every single time you use a product.
For example, I was looking for a proper work chair to save my back aching from long hours on a stool when I started to work from home and was shocked to realise that a decent office chair starts in hundreds and can go up to thousands. Even a basic office chair in the resale market start at $100.
After some research and waiting and a lot of luck, I managed to get a pre-loved-for-six-months leather chair at $80 from an expatriate who is leaving Singapore for good and is selling his stuff quick. The best thing is he stays around my neighbourhood so I even saved on the delivery by picking the chair up at his place.
To be honest, it wasn't in a perfect condition because of a shaky arm, but that is easily fixed with some tightening to the screw (which is sealed but in case some of you do not know, you can remove the seal with a tool or just use your nails to pivot if you have long nails without a pretty manicure to access to the screw) and I now have a fully functioning and comfortable chair to work in :)
If I were to use it every day and decide to sell it at a resale value of $60 after a year, my utility cost will just be:
$(80-60)/365 days = $0.05
So it costs 5 cents for me for every day my bum is on the chair. The longer I use the chair or the higher resale value I can fetch, the cheaper the chair will be.
In fact, the quality of the chair is really good and I'm good at taking care of my stuff, so it may even be sold at the same price I bought after a few years which means it would have effectively cost me nothing.
On the other hand, if I had bought a brand new office chair at $200 and sold it at $100 in the following year, it would still cost around $0.27 per day and that is still 5 times more expensive than the one I have gotten.
Now, it will be very difficult to track how many times you have used a product, so it's fine if you use an estimation, but the take away here is that the utility cost is lower if you use a product more often.
This means that something that has a higher price tag may incur a lower cost if you use it frequently, and something that is you got from a sale could be effectively more expensive if you hardly use it at all (anyone guilty of having clothes with the price tag still on it in the wardrobe)?
Since we have limited time, attention, and energy, there is only a limited number of things we can use at a time.
So what is the most expensive item you own? And what is the cheapest item you have? Please share it with me and many thanks for reading.
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