This is the continuation on my previous posting of how much things actually cost. In short, we can calculate how things actually cost by considering their cost over the time in which we would effectively use them instead of just their upfront number. For example, a pair of movie tickets plus a popcorn combo for two costs $30 on a weekend. So, if we take a 2 hour movie, that works out to $15 per hour. That cup of coffee? (Its water, so let’s assume it gets digested in 2 hour). A Starbucks coffee would cost $3.5 an hour, while your kopitiam coffee would only cost $0.75 an hour. A restaurant meal costing $30 would work out to $5 per hour assuming you took 6 hours to digest the food.
Let’s touch on something close to people’s hearts here – housing. This is iffy because you can sell your house again subsequently, so many people do not see it as necessarily a cost. But for someone who is renting. Say you spend $3,000 per month renting a place. At most you would spend only 12 hours a day at your house. Rest of the time, you would be outside. So, on a per hour basis, it would cost (3000 divided by 12x30) = $8 per hour. This of course, doesn’t include things like your PUB bill, and cost of furniture and stuff.
Take a couch. Say you spent $3000 to buy a really expensive, nice sofa set. Give it 5 years usage, and assume you are a real TV buff, so you spend 3 hours watching TV every day (wow!). So, that sofa cost you 3000 divided by (3x365x5) = $0.55 per hour. Hey, its not that bad if you are a TV buff. Of course, if you are the type that buys a $3000 sofa set, but hardly use it at all because you watch TV in your bed. So, it gets used maybe 1 hour a week? Then your sofa set actually costs you 3000 divided by (1x56x5) = $10.71 per hour. That’s much more expensive now. Note that this is why I am willing to spend money buying an expensive nice bed, because we use the bed a lot. Even if it’s a $3,000 bed. If it lasts for 5 years, and we sleep on it an average of 8 hours a day, then its per hour usage is $3000 divided by (5x365x10) = $0.16, which is cheap! So, buy a good bed!
The same principle can be applied to electronic equipment like computers, handphones and TVs. So, if you spend 1 hour per day watching TV, then a $3000 TV set that lasts for 3 years would work out to 3000 divided by (365x3) = $2.74 per hour. If you spend 2 hours or even 3 hours a day paying computer games after work, then even if you spend $6000 on a top of the line computer that lasts for just 2 years, it would be only 6000 divided by (3x365x2) = 2.74 per hour only.
How about things like assessories? Again, it all depends on how often you use them. A diamond ring may cost a lot, but if the girl is so happy she wears it every day to work or play for the next 5 years (before she switches to another). Then, even if it costs $10,000, it would only work out to 10,000 divided by (300x10x5) = $0.66 per hour. Yes, you saw that right. It costs less than a cup of starbucks coffee. Of course, this is provided she wears it that often. If you are the hapless guy who sent even $10,000 on a diamond ring, and you gal only wore it a few times and then, kept it in her safe deposit box, then it would work out to say 10000 divided by (10x10) = $100 per hour! Now, that would be horrendously expensive. Of course, being a guy who actually did buy an engagement ring for my wife, I would advise that all guys do that regardless of how often they wear that ring after that. Because marriage is for life, and you wouldn’t want your wife to be mad at you for not buying her an engagement ring (even if she doesn’t wear it often).
Another common assesory, the watch, is actually pretty cheap too because we wear it so often. If you spend $5,000 buying an expensive branded watch, but you were willing to wear just that one watch for the next 10 years, to work and to play, again it would be cheap on a per hour basis, just $0.33 per hour. Of course, if you are going to end up wearing it just once each week for just 1 year before it starts to collect dust in the cupboard, then it would cost 5000 divided by 56x10 = $8.90 per hour. The worst would be if you wore it once, didn’t like the look, and never wear it again! Then, it would cost an astonishing $500 per hour! Of course, you could also buy a $100 watch and wear it for 5 years, and that would only cost $0.0054 per hour! In a similar vein, buying a $100 for a friend whom you know never ever wear watches, is a waste of money even if its $100.
How much do trips cost? Again, they can be calculated using this method. My honeymoon vacation was to Maldives, and cost nearly $10,000 for just six days or so. So, it cost $10000 divided by (6x24) = $69.44 per hour. This is obviously very expensive, which is why people can’t exactly afford to do nothing but travel all the time on holidays. Cheap trips though can be both fun, and very reasonable on the pocket. A $500 weekend trip to somewhere near, would only work out to 500 divided 3x24 = $6.94 per hour.
Ultimately, though this is just another way of looking at the cost of things, and doesn’t factor in the intangible benefit or enjoyment from things. I must emphasize that I am not encouraging people to do nothing but to scrimp and not spend any more at all. Life is going to be very tedious and boring if its all about saving and you don’t get to enjoy yourself at all. However, as with all things, things can be enjoyed in moderation. Is your enjoyment from sitting on a $3000 sofa set that much more than sitting on a $800 one? Only you can decide on that. Things that get a lot of usage are actually very cheap. So, that watch or assessory might actually work out to be really cheap if you wear it all the time. Take my wedding ring for example. It cost under $300 and is probably the cheapest assessory I ever bought on a per hour basis. This is because I have worn mine since I put it on and have never taken it off since, even in my sleep. So, as of now, I have worn it for 5 years and 7 months, or 2035 hours. So, it works out to just $0.147 per hour and its getting cheaper by the minute! On the other hand, I have realized that buying diamond rings for my wife is an extremely expensive affair because she hardly ever wears them. But diamond earrings are alright because she wears them all the time!
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