jacob wrote:To go back to your example, it gets "complicated" when you start computing the cost of your appliance. If you hold it for 10 years and sell it again for $50, is the annual cost $10/year? That sounds reasonable ... but what if you could sell it for $200? Is your cost now a negative $5/year. Is that still a cost? If you're making money, are you in the appliance business?
I hadn't even taken it that far, although I have for other things - my car notably. I bought it for 5K back in 2005 and can probably sell it for ~1K now, implying an annual cost of $364 bucks.
Its easy to see how this can get complicated/difficult to compare.
This kind of accounting seems most useful once you have achieved sufficient wealth and can think more in years as opposed to months ahead.
Another example- the muffler fell off our truck this week and we had it fixed for an efficiency factor of 2X (used after market muffler, custom tailpipe).
I think this is one of the more fascinating threads to come around in a while, thanks for all of your thoughts folks.