Investments That Have Paid Off, or Cost Me

Over the years I’ve made a number of good investments, and probably a larger number of bad ones. Yesterday, as I was making a cappuccino, I was thinking back to some of the good investments I’ve made, and also about a few of the not-so-great ones. While these investments weren’t in the stock market, they were investments none the less.

The Winners:

One of the best investments I’ve ever made was deciding to go to the first college I went to. Over the two years I attended the school I learned so much, and what I learned still impacts my day-in, day-out life today. (Total Estimated Cost: Two years and $19,000)

On a similar vein, I would say a trip taken during my second year in college would make the list. In March 1998 I had the opportunity to go to Israel for more than a week, to tour the Holy Land. The trip opened my eyes in many ways, and started my interest in studying the Abrahamic Covenant (an interest that continues today). (Total Estimated Cost: $1,500)

In August 2006, three months after I started dating the woman I would marry, I started shopping for engagement rings. From a number of conversations we had had, I knew that the love of my life didn’t really like flashy jewelry, and so I set out to find something simple, yet elegant. After a few weeks, and about 30 stores later, I found the ring for her. It was a 1/3 ct. Canadia diamond in white gold. While the commitment I made, with the giving of this ring, is priceless, the price paid for the ring was well worth the price to see the surprise on her face when I pulled it out. (Total Estimated Value: $1,900)

Leading up to our wedding we weren’t sure what route to take when it came to wedding photography. After putting some thought into it, and talking to a good friend of mine, we opted to go with a non-traditional route. Instead of paying the $700-3,000 that we had seen listed for photographers, we opted to buy our own camera and ask my friend to take pictures for us. We realized this was a big risk, but it was a risk we were willing to take. At the end of the day, not only did we get great pictures, we also owned a very nice DSLR (Sony A100 with 18mm-200mm lens). (Total Camera/Accessories Cost: $1,200)

Before I leave the Sony A100 aside, I’d also like to point out that having moved to Japan, if I had stuck with a film camera I never would have taken the 6,000-8,000 pictures I did while living there. (Estimated Savings for Film and Processing of 7,000 pictures: $3913)

Back in 2001 I made a small investment that paid for itself quickly, and continues to pay dividends. This investment is the cappuccino maker I mentioned earlier. After receiving some gift money for my 23rd birthday, I decided to buy the cappuccino maker. The first dozen or so cappuccinos were flops, and over time I learned I’m a little more particular in regards to what coffee beans I’ll use to make my cappuccinos, but it’s undeniable that this investment was worth the upfront cost. Compared to the $3-$5 a cappuccino or caramel macchiato at Starbucks, owning my own cappuccino maker and paying around $0.15-$0.30 per cappuccino (for supplies) is well worth the cost. (Purchase Price: $109 or approximately $0.05 per drink made)

Before returning to college in 2001, after a two-plus year break, I purchased a pair of Dr. Martens. Prior to that point I was wearing out shoes rather quickly, and so I decided to spend a little bit of money and hopefully be able to use them for a little longer. Over the seven years that followed, I probably averaged wearing my Dr. Martens five days a week. I wore them to school, for leisure, to work and just about everywhere else. Prior to moving to Japan I purchased a new pair of Dr. Martens to replace my old ones, which by that time had very little traction left on them, but I couldn’t bring myself to get rid of the old ones. I still have the old ones, and have worn them on a dozen or so occasions since returning from Japan. After I returned from Japan, I went back to visit the radio station I worked at out of college, and one of my former co-workers asked me where my Dr. Martens were. He joked that he’d seen me several mornings a week for the four-plus years I worked with him, and he’d never seen me wearing any other shoes. When all is said and done, I may have paid more for my first pair of Dr. Martens than any other pair of shoes I’ve bought, but they were worth the price. (Purchase Price: $99 or $0.05 cents per day I wore them)

The Losers:

Right out of college I got a job working in my field of study. A month after starting my job I decided that I wanted to buy a HDTV, and so I did. I researched them, looked at dozens of stores and finally decided to buy a 32” tube (as in not flat panel) HDTV. Over the five and a half years I’ve had the TV I’ve watched hundreds of hours of DVD’s on it, as well as cable TV (when I had it), and I’ve played hundreds of hours of video games. So, the question may be asked, why do I put this on the list of losers? Well, out of the hundreds, if not thousands of hours I’ve used my HDTV, I probably have only watched HD content for maybe 50 hours. And while standard definition signal looks good on the TV, I could have bought a SD 32” TV for probably $700-$800 less than what I paid for my TV. (Purchase Price with four year warranty: $1250)

Another loser among my investments covers a number of purchases over a number of years. As a result its total cost cannot be easily added, and so I will not put a dollar amount on it. These purchases were in the form of extended warranties. While not every extended warranty is a loser in my mind, in hind sight most are simply not worth the price. Two notable exceptions I would make are the warranties I got with my car, which added four years and 60,000 miles onto the manufactures warranty, and the four year accidental breakage warranty I purchased on our DSLR camera. I knew that we were going to Japan to live, and so I believe the cost was worth the repair bill if the camera would have been accidentally broken. But, in a dozen other cases, I was hooked into buying warranties on things such as hard drives, cell phones, printers, my HDTV and DVD players. Retailers can charge you up to 25%, or higher?!?!, for a warranty that in many cases doesn’t even cover things that tend to break down. On more than one occasion I have tried to have a product serviced under the extended warranty, only to be told that it would not be covered because the problem was a result of “normal wear.”

This first half of this one may get me in trouble with my wife. The next loser is books and DVDs. There are some books that I am glad I purchased, but most of the books I have bought I should have borrowed from a library. Years ago I wanted to build up a library of my own, and so I bought books that looked interesting. Most of the books I read, but looking back only a dozen or so were worth buying. Most of the books I have I could have gleamed what I could from them, and then returned them to the library. (Who knows, maybe my wife would agree with me after all). When it comes to DVDs, instead of spending the money I did to buy many of the DVDs I do, or have owned, I would have been better off paying $2-$4 to rent the movies each time I wanted to watch them. In only one or two movies case would I have spent more money paying such fees to rent the movie each time I wanted to see it, then I did by buying the film at a rate of $15-$20.

The last purchase I’m going to put into the category of losers is my car. I like my car, and it has served me very well. My car gets great mileage (35-39 MPG) and hasn’t had any major breakdowns over the 27 months I’ve had it. The reason I would put my car in the loser category is because I took out a loan to buy my car. Instead of buying a car I could afford, or even buying a slightly older car with smaller payments, I purchased a nice car and am still paying for it. In the past two years I’ve become more anti-debt, and as a result I would rather own an old car, and not have payments, than have a nice newer car and be locked into payments. In the future I hope to only buy cars with cash, and not have another car payment. (Total Cost of Car and Extended Warranty: $16,000 without interest)

Summary:

Looking back it’s easy to see some of the big winners and big losers in regards to time and money spent. But looking back I have an advantage that I didn’t have before—hindsight. My Dr. Martens could have worn out in 6 months, or my girlfriend could have rejected my proposal (by which time the ring was outside of the period in which I could have returned it), or our wedding photos could have been disastrous. While the winners listed above did turn out well, I realize that they just as easily could have been disasters, and could have made it on the losers list.

Something that has been beneficial for me in looking back at the purchases I’ve added to these lists is more of what I find in the losers list, rather than the winners one. The items on the second list were made more out of an attitude of entitlement than anything else. I owe it to myself to have a nice TV or a nice car, or a large DVD collection. I owe it to myself to have these things, even if I can’t afford them at this point and time. None of the items purchased are inherently bad, but rather it was my reasoning for buying most of them that make them losers as I look back. In several cases I traded a hope of future income for immediate pleasure.

Because of the way God made space and time I cannot go back and change the mistakes I have made in the past. However, if I am wise, I can use the lessons of the past to help me know what choices to make in the future.