#8- Contextual Valuation, Diminishing Returns - Part 1
Updated: Jan 15, 2022
Part 1 - Defining our boundaries
One thing our society has pushed on us is that we need the best of the best for everything in life - keeping up with the Jones’s is another way of thinking of this. It is responsible for a lot of pain and waste in our lives, including looking at material possessions to try and fix what we view as wrong with us as a person (buying things to make us happy). Part of this problem is simply being honest with ourselves, as what is right for our friends may not be right for us. A mechanic probably needs to have very expensive, high quality tools to make a living, but those would be a waste of money for most of us.
This requires us to be totally honest with ourselves and what our needs and wants in life are. In our culture of consumption, most of us haven’t actually learned to differentiate what a need or a want is - I certainly didn’t learn it until later in life. When we are completely honest with what we NEED for a situation it allows us to set guardrails to keep us on track. These guardrails make sure we get at least the bare minimum to do things effectively, while the other guardrail makes sure we aren’t compromising other aspects of our life to have a nicer “thing” than our bare minimum.
I am not arguing for the bare minimum of the tool or the most expensive tool - but defining what those tools are, and how to integrate them into our lives. After we’ve been able to determine that, we’re able to apply some other concepts beyond guard rails. Things to consider include long term cost of ownership, maintenance, replacement parts, accessory availability (and do we need them), durability, how much ammunition costs and it’s availability, etc..
The easiest way I’ve been able to describe this concept for guns is to draw parallels to cars. The gun is the car, the ammo is the fuel, magazines are like tires (they’re good for a while until they’re not), replacement parts and how often they’re needed are like finding a good auto repair shop…it’s an analogy that most drivers are able to relate to.
Let’s take a look at this image and see if we can make our guardrails for our personal situation with some pistols. On the left are bare minimum requirements and on the right are the most expensive, most bestest (eat that spell check) options we can think of. In the next part of this series, we’ll take a much deeper dive into what our options are, the guardrails we’re putting in place (and why), and what options we’re going to take a look at for OUR situation - not anybody else’s.