Changing the way you think about prices (purchase, company, money)

[Houston3]

I always wondered why if I'm making $20.00 an hour why does it cost me $100.00 an hour to have my car worked on. I understand profit, but !

[Craig121]

Originally Posted by runningncircles1

What is the first thing you hear when someone tells you a price? "It costs XX dollars." At first glance, a number might SEEM enticing, but I think we should learn something from our bartering ancestors: use the value of our LABOR in place of just thinking of the price of an item in dollar amounts. No, I'm not saying get rid of currency, as any economist will tell you that it's extremely difficult to have an economy based on bartering.

What I am saying, however, is to use the amount of labor we perform over an amount of time and ask ourselves if something is worth it. I've been doing this for a while now, and I have definitely changed my consuming habits. For example:

Let's say you make $8/hr (like me... broke student, lol). You go to the mall with friends and you want to buy lunch. You see that it costs $5 dollars for Chinese food. At first, that may seem like a reasonable price. However, think to yourself this: that $5/$8/hr is equal to 37.5 minutes of work. Remembering how grueling that amount of time from your life was, is it STILL worth it? Sure, it may taste good, but will you be remember it in the future or is it just average? Is it an all time favorite? Etc. etc. It definitely won't last forever, so why trade in 37.5 minutes of your valuable TIME (which has more value/scarcity than money since you can't produce more of it) for it? Now, you go to the movies. It costs $10 where I'm at. That is 75 minutes of my life and labor to pay for an intangible movie. Will I enjoy the company I'm with? Is it a good movie? Why not wait for it to come out on DVD where I can own it, watch it many more times, or at least rent it cheaper? Last but not least, what about those jeans that are 50% off? Marked down from $30 to $15. That is 112.5 minutes of my life, almost 2 hours. However, I'll be able to use these jeans for a good 2 years if I don't wear them out. I like them. Are they worth 2 hours of my labor?

I think if we started thinking in terms of how much labor/time we put in to get our money instead of just the price tag itself, we wouldn't make such frivolous purchases or be so hasty to use credit (because we can use the pay rate to see how many hours we work to pay off accrued debt). Does anyone agree with me or am I just looney toons?

Its people like you who ruin people like me. SHUT IT.

[London Girl]

An interesting link on the cost/labor idea:

CynicusEconomicus: May 2009

[texdav]

Originally Posted by Houston3

I always wondered why if I'm making $20.00 an hour why does it cost me $100.00 an hour to have my car worked on. I understand profit, but !

The mechanic cost is only part oft eh cost of runing a auto repair shpo as most know. You pay for the guy that cleans up;the people that do the paper wrok ;the ones that answer the telephone and cost of the shop itself. Like in your job your probaly just a small cost too. You could always do it yourself; if you have the knowledge and the tools.

[Huckleberry3911948]

good post you are on to something. its dave ramsey stuff. the huge difference between paying for things and signing for things. when you pay you think.

[user_id]

Originally Posted by chet everett

Data from the "The Millionaire Next Door" shows that those with a orientation to savings rarely buy "luxury goods" and conspicuous consumers rarely become wealthy. Almost polar opposites...

Data? Its a bunch of hand picked examples to demonstrate what the authors wanted to say.

The picture painted in that book is pretty inaccurate. Most wealthy folks spend all sorts of money on luxury items.

Originally Posted by Houston3

I always wondered why if I'm making $20.00 an hour why does it cost me $100.00 an hour to have my car worked on. I understand profit, but !

The going rate for auto repair is like $60~$70 an hour. Depending on the skill of the mechanic the total costs to employ them is between $18~$50/hour, say on average around $25~$30 (Most shops only need one or two really high skilled folks, the rest can be low/mid skilled). But the owner of the shop also needs to pay for rent, insurance, equipment, advertising, etc. Billing at $70/hour is not generating large amounts of profit.

Although, you may get $20/hour your employer is paying more than that. There are a variety of costs, they pay 7% of your pay toward social security, there is unemployment, workman's comp, etc Not to mention any benefits you receive. People also under-estimated the operating costs of a business. The equipment costs alone are pretty costly.

[Craig121]

As a seller, the last thing I need is some bloody customer lowering prices, or comparing prices or racking up the amount of hours worked for the goods.

Its not on and if you were in sales, you would also tell the OP to shut it and every poster on here who carries on this sick thought pattern. Ya know, all this talk from you lot means that you don't have the money to spend, the recession must be hitting yous hard.

[tallrick]

The other thing to consider is how much of your labor is stolen for the unproductive classes via inflation. As for labor, if you compare your wage to a needless job, such as a lawyer, you can really see how the value of labor is transfered to the unproductive. If technology was implemented the lawyer would be forced to perform duties that actually improve society, not drag it down as today. A lack of inflation would deflate prices and reduce the need for labor altogether, giving all of us a higher standard of living.

[Craig121]

People never give up, do they.

[CosmicWizard]

I've been thinking like the OP for the past 40 years. sterlinggirls suggestions adds a whole new dimesnison that I hadn't previously considered. Gotta luv it. Thanks sterlinggirl.