actually thrift

Okay, here is an exercise.

Let’s say that something bad happens — some financial catastrophe — and you need to come up with an enormous amount of money quickly. And for the sake of this exercise let’s also say that you have already tapped into your savings, your 401K, your lines of credit, cash advances and anything else you can think of. All the traditional methods are exhausted and you still need cash. A lot more. So now all that is left are your things. Your stuff; the things you own. All that you have to sell are those very items you see and use everyday.

But how much are those things worth? — not how much did they cost, but how much are they really worth? — because a baseball card might have a value of a thousand dollars but until someone puts that amount in your hand, its value is undetermined.

In this financial scenario, if you had to sell all the things you own, outside of owning a box of gold coins or having a few Corvette’s in your garage, the true value of what we have — meaning what someone else would pay us for them — is actually very small.

Our flat screen TV may have cost three grand, but if no one is going to give us  three grand for it — especially if it’s a few years old and is no longer the hot technology — it’s probably worth a hundred or less.

Outside of owning luxury items or precious stones and metal, the contents of an average four bedroom home would sell in an estate sale for $6,000.

Not bad. Except that the replacement cost of those same items would be  $20,000. Meaning what we pay $20,000 for items that have a street value of $6,000.

Here’s an example. A few years ago I splurged and bought my wife a very nice gold chain — a jewelry store near our home was having a big sale and a 14 carrot gold chain that would normally be $1,200 was now $800.00. So I bought it. And just out of curiosity — just because I wanted to gloat on what a bargain I had gotten — I stopped at a pawn shop on my way home. I said that I might be interested in pawning the piece and wanted to know how much I would get for it. The gold was tested and weighed and an offer was made.

$140

My $800 purchase had a true value of $140.

Now, I might have found a slightly higher offer at another pawn shop. Maybe. But the highest offer someone had given me was $140 so that was the current value.

I still gave my wife the necklace — it was a gift and it was not about the money — but it did get me thinking.

Now this discussion is not about how to get the highest dollar for your things when you sell them. It is demonstrating that anything we buy new — and I mean anything —- the value depreciates just like a car. A $200 microwave has a resale value of around $50. A $100 vacuum cleaner would sell for $30 and a $600 lawn mower would get you about $75. That is the true value of those items.

So here is the challenge. Take a month and be resolved to be on the other side of this curve. For one month. For thirty days. Vow to buy all the items you need — every coffee maker, every shirt, every book — used.

Instead of running to Wal Mart on your way home — stop at The Good Will instead. And when you need to swing by Radio Shack, hit the local Pawn Shop. Instead of Target, pick up a few things at The Thrift Store or scan Craigslist.

Just do it for thirty days — it  won’t be as convenient and it may take some patience — but vow to do it for one month.

And let me know what happens.

BY:

evdemorier@aol.com

Everett De Morier has appeared on CNN, Fox News Network, NPR, ABC, as well as in The New York Times and The London Times. He is the author of Crib Notes for the First Year of Marriage: A...