Blog

Short blog posts, journal entries, and random thoughts. Topics include a mix of personal and the world at large.

Price sensitivity

The goal of President Trump’s tariffs threat is to bring manufacturing back to America, right? The downside of course is that things will become more expensive. Manufacturing didn’t leave America because of some evil corporate plan. The simple reality is that labor is cheaper elsewhere. Lowering cost of goods sold is a big lever to increase profits. Or have profits in the first place.

Tariffs are merely tacking those labor savings back onto the purchase price. There’s one for sure loser, and it’s the consumer.

For sure there are plenty of cheap crap coming out of China. But in the year 2025 it’s beyond pass time to acknowledge that China can also produce things of the highest quality. Did we forget the iPhone has been made in China since inception? The Apple smartphone is as precise a device as it gets.

“Made in the U.S.A.” still denotes a higher quality in people’s minds. Whether or not it’s actually true is up for debate. What is definitely true is that it’ll cost more compared to foreign-sourced manufacturers. I recently bought a barbell, and the unit made with American steel is $85 dearer than the Chinese-made equivalent from another company. The decision was easy.

Coming out of the high inflationary period of the pandemic, I am always looking for the best deals on anything. And doesn’t everybody? Who has the money to boycott Amazon (because big bad Bezos)? If a particular item is the cheapest on Amazon, I am buying it there. I do not have the income to support an artisan soap business at a farmer’s market. If you do, please go ahead.

I will live life as cheaply as possible, because everything else has gone up in price. Tariffs - if they come to full fruition - is only going to make it worse.

Splitting it four ways

Word on the street is DoorDash is partnering with Klarna to offer split payments. So now you can pay for that $30 (in total) delivery burrito in four easy monthly payments. Wonderful. I can finally afford to use DoorDash! Peasants who actually drive to the restaurants to pickup their own food: I cannot be you.

It’s hilarious to me that in response to high inflation, instead of abstaining from things that’s gotten too expensive, people are seeking methods to lower the initial cost! Can you really afford that couch if you have to split it over four months? I would argue no, though I understand the pressure. Even couches from famously inexpensive retailer IKEA are getting up there in price.

A used couch with curious provenance on Facebook marketplace it is.

Maybe our university can attract more students if it also partners with Klarna: tuition payments over many months. Oh wait, those already exists. it’s called student loans.

How another person spends their money (or borrows money to spend) is their business. These are consenting adults consenting to a purchase agreement. You cannot be victim of capitalism if you choose to participate. Of course we can’t not participate, but the bare minimum to subsist is not overwhelming. I get it, though: eating rice, beans, and chicken breast for every single meal is torturous.

So get that sushi takeout delivered via DoorDash! You deserve it. And by splitting it four ways using Klarna, you can afford it, too.

Too busy adulting

I recently loaned my car out to a friend for a few days. He’s back in town from spring break. Because I have a walk for a commute (thank the lord), the friend is free to use the car during my work-week.

Which is just as well because I otherwise would not be putting much miles on my BMW M2. Upon returning the keys to me, the friend marveled at how little I drive it. He can’t imagine owning such a fantastic machine and not drive it at every opportunity.

Welcome to true adulthood: you have to make choices on what you spend your time on. We don’t get a spring break. They also lied to you: you cannot have everything.

Soon as the weekend hits, the last thing on my mind is taking the M2 out of a leisurely cruise. There’s groceries to shop for, laundry to do, exercises to perform, and general life maintenance that I didn’t get a chance to do during the work-week. By the time that stuff gets done, well, it’s evening again. Perfect time to drown myself deep into YouTube land.

Never mind that gas prices and insurance costs are not getting cheaper.

Obviously, I can make driving the car a priority, but something else would have to go. (It definitely would not be sleep.) That’s not a trade I’m willing to do at this moment. In a hypothetical world with infinite money and infinite time cheat code, sure, there’s lots of things I would like to include in my repertoire of hobbies. But in this real world, I can only pick a few at a time.

We all do. Those who birthed kids but are still clinging onto some semblance of their prior life will only drown.

Not free shipping

A thing we take for granted in the online shopping age is free shipping. Thanks to Amazon, we’ve come to expect free shipping no matter what we buy, from the smallest everyday item to the bigger furniture set possible. Heck, if I buy a Tesla car online, I expect a Tesla employee to deliver the car to me, gratis. How is the guy getting home afterwards? That’s not my problem.

Of course, free shipping is most decidedly not free. Someone is paying for the teams of people driving those trucks and carrying those poundages, and it’s certainly not the retailer. The cost of shipping is baked into the margins the retailers have on the item sold. Any Shark Tank watcher would know, margins between landed cost and wholesale is typically enormous.

We are paying for shipping, it’s just that the norm is to bake it into the price of the product. Except on platforms like eBay. The auctions there are where the true cost of shipping can be seen. No individual seller can afford to “eat” the shipping cost just to placate the customer expectations. The economies of scale is non existent. Psychological test: is it more lucrative to hike up the price and offer free shipping, or lower the price and charge shipping a la carte?

The problem with free shipping is that it sets an unrealistic expectation that shipping should also be free if customers need to return an item. I’m sure Target can afford to absorb the cost to return a pack of pencils, but for something like an exercise bike? Probably not. But then the customer gets pissed once they see the actual costs to ship the bike, which they must pay if they want to return it.

Amazon is kind of genius in purchasing Whole Foods, thereby creating a physical location where Amazon shoppers can return items conveniently for free.

Not again!

I am incredibly peeved the insurance on my BMW M2 is going up once again. What is going on? I thought inflation has stabilized? A $180 increase for the next six month period, for a car I seldomly drive, and has had zero accidents on record. Worst of all, Progressive - the insurance company underwriting the policy - is the cheapest of all the major companies.

Contributing to the problem, a double-edge sword, is the M2 has kept its value really well. The lack of severe depreciation means in the event of an accident, the replacement cost remains high. Of course, it’s nice to have a low-depreciating car, in the event I do sell it in the future.

And sell it I just might if the insurance cost either keeps increasing, or doesn’t go down. I can afford to insure a high-performance sports car, but I kind of don’t want to anymore. Gone is the era of car enthusiasm where I would expend as much money as my (meager) income can afford to keep a car around. I’m in my having a lot of money saved in the bank as a cushion era. As the kids say these days.

The thing about hobbies is the opportunity to continually dump money into them is kind of endless. The photographer who can’t stop buying new cameras and lenses, or the car guy who can’t stop swapping cars every few years (that was me). Now that I am a year deep into weightlifting, I’ve been eyeing upgrades to the gear I am currently using. A better barbell would sure be nice to have.

Goods news about lifting gear is that most can literally last a lifetime. I mean, weights are weights. Plates and dumbbells don’t lose kilograms the more years you own them. A solid barbell can be passed onto your progeny. So can a power rack.

It’s simple, really: buy quality, keep forever.

Nice new fence you got there. It would be a shame if something happened to it.

Fairness, or jealousy?

Now that we essentially have an effective diet pill - Ozempic and its ilk, there appears to be some disgruntlement from those who lost weight the “right” way. The diet and exercise weight losers are saying the Ozempic users are merely taking a shortcut. And by taking a shortcut, they are a lesser people because they did not put in the long and consistent work necessary.

Those who summited Mount Everest would rightly jeer at a person who took an elevator up there instead. Those who work and saved diligently to pay off student loans would rightly condemn those got theirs loans forgiven by the government. That’s just how the world works: fairness is not a guarantee.

But I don’t think it’s about fairness. It’s simply jealousy. Those who diet their fat off are jealous of the possibility that Ozempic now offers, a possibility that they can no longer take (because they’re now skinny). The envious ones would have no qualms about taking the drug if they were to start all over.

Those who paid off their students loans are just mad the offer of forgiveness no longer applies to them. The government is giving out money, and they are not eligible.

Good news for them: federal student loans aren’t in danger of being forgiven anytime soon. Not with this administration, not with this Supreme Court. And honestly, why should all taxpayers subsidize a small group of people who chose to go to university? A group who are more likely to come from the middle class. Armed with a degree, a group with higher lifetime earnings on average.

The high school dropout earning minimum wage at a fast food restaurant should not be forced to have his tax money pay for that.

True cost of buying

If the economy is in the dumps, you know how they can spur spending? Give a tax holiday. Perhaps I’m the only one who thinks about this component? The sales tax is highly salient for me when it comes to big ticket purchases.

Remember in the early days of Amazon they did not charge sales tax? Those were the lucrative times. You can buy a television by the thousands of dollars and save hundreds on tax. Now I think we’re suppose to report that come tax time, but honestly, who the heck did that? Besides, doesn’t sales tax go to the state and city?

Never mind! As an employee of a state (at least until Elon Musk’s DOGE gets around to state public workers), I’m a big fan of the sales tax.

Look at buying a new car. The (let’s just say) $30,000 sticker price is not inclusive of the addition thousands in taxes the buyer must pay. Obviously it’s obscured by the mechanism of spreading it over multiple years in payments. (That’s how they get you!) I tend to look at it holistically: do I want to pay additional thousands to not even for the car itself?

What scares me from a mortgage (not that I can afford a house around here) is the amortization table. The amount of interests alone over a 30 year term is freaking outrageous. It seems more prudent to me to keep renting until I am able to pay a majority portion of a house in cash. Keep that money in investments in the meantime and let those interests come to me, instead of the bank.

The true cost of buying something significant is super important to consider.