March 15 2009|04.46 PM UTC

Jonathan Rivers

Unnecessary Upgrades: A Cost-Benefit Analysis

Category: UncategorizedTags: , , ,

When purchasing a new product, consumers are often tempted to opt for the latest and greatest version, justifying the higher price tag with their perception of increased value. The actual value is different for each individual, and can be largely rooted in personal preference. While there are certainly benefits to most upgrades, many of these decisions are made impulsively, or based on poor logic. Is the durability of a hardcover book worth paying three times the price? Do you typically wear-out your paperbacks? It is important to consider how much of the benefit will actually be utilized to ensure that the upgrade is not merely out of desire to have the best.

A similar logic is often used upon the launch of a new product, as consumers rush to be the first to own one. These consumers can be found waiting in lines and paying high prices for buggy first versions of products that are typically made obsolete by better, cheaper versions only a few months later. This “early adopters tax” shows that patience is a virtue, especially when it comes to your pocketbook.

*Disclaimer regarding “early adopter tax” – Later versions of the products sometimes omit some non-key features but are for all intents and purposes overall a better package.

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{ 19 comments… read them below or add one }

Internet Marketing March 16, 2009 at 2:02 am

Too true!

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Nate @ Debt-free Scholar March 16, 2009 at 8:57 am

This is great! I have subscribed.

Thanks,
Nate

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Dan March 16, 2009 at 9:40 am

Actually, the gasoline picture and its description is completely incorrect. With each higher grade of gasoline (87, 89, 91, etc.), it has a higher resistance to predetonation. While 87 is fine, predetonation can be a huge issue with a gasoline engine. Please check your facts before you post such nonsense.

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BillShrink Guy March 16, 2009 at 11:16 am

Dan: As you’ve mentioned, grades of gasoline are base on octane rating, which in a nut shell, measures the resistance of gasoline to premature combustion, aka engine knocking (combusting before it should be combusting by a spark plug).

But in today’s modern fuel-injected vehicles, engines are designed to be use with specific octane rating, usually correlating an engine’s compression ratio to the grade of gas (higher compression ratio, higher octane grade).

If you car is engineered to run with an octane rating of 87, using 91 will result in no real benefit. In some instances, you may even accumulate un-burnt fuel into your emission system, which can end up collected into your catalytic converter — eventually stressing the system.

If you accidentally pump lower octane fuel into a vehicle that’s designed to run with a higher octane, no worries – a modern car’s onboard ECU (engine control unit) will dial back the ignition timing to prevent issues.

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James Green March 16, 2009 at 6:04 pm

Thanks, BillShrink Guy. I hate nitpicking people like Dan, especially when they’re wrong.

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laughs at dan March 16, 2009 at 6:22 pm

Dan….you just got Pwned!

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Kate March 16, 2009 at 7:45 pm

Fantastic! When I walk past the first class cabin back to coach I will smile ever so mysteriously as I think:

“You fools! I am going to buy a new iPhone, a Ralph Lauren Marino Wool Sweater, a 32″ Flat Panel TV, a Blu-Ray player, a PlayStation 3, a bottle of scotch, a few paperback books, fill up my gas tank… and then take a few Hydrocodon Acetaminophen for the headache I’ll get from all this conspicuous consumption and still having spent less money than these first class fliers!!”

Thank you for this great post.

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Evil Clpwn March 16, 2009 at 8:27 pm

Dan is crabby . . . and WRONG! Only if you get knocking should you use a higher octane gas in most cases (unless your vehicle specifically REQUIRES it).

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jack March 17, 2009 at 8:09 am

gold label is worth it, old ps3 was more backwards compatible, nice list

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Max Green March 17, 2009 at 10:29 am

I have known people who insist on using premium fuel during cold weather”because it starts easier”.This is incorrect higher octane fuels detonate at a higher temperature,therefore they are less apt to start at 15 below zero.

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garbageinand out March 17, 2009 at 1:24 pm

you guys are wasting your time dithering over drivel!

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tim March 17, 2009 at 6:32 pm

bravo. A great list in all.
I think it should be said that Tylenol with Codeine is easier to pronounce than you might think (Listed here as Hydrocodon Acetaminophen). Also, while it helps many forms of pain, many are uneffected and require a stronger, eg. Vicodin, or more targeted painkiller.

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tim is stupid March 18, 2009 at 1:01 pm

Vicodin is Hydrocodone and Acetaminophen not Codiene and Acetaminophen. Hydrocodone is a stronger opiate than codiene.

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Ryan Williams March 18, 2009 at 3:46 pm

Very well done, I especially like the early adopter tax.

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mitch March 22, 2009 at 7:24 pm

I sit in First Class a lot.

But I’ve never paid for it. However, there is one value to it not mentioned: I’m a LOT less tired after flying First. Less noise, more room to wiggle around results in me getting to my destination requiring less time to recover from the trip.

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Charles March 24, 2009 at 6:20 pm

I drive an Acura TL that requires premium gas. For years now, I have been filling it up with regular gas. Guess what! it runs smooth and I don’t even know the difference.

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Big Al March 29, 2009 at 5:21 am

Yes! This imbodies the mindset I’ve had for years & years. It also allows me the rare occasional splurge (without guilt) on Dom Perignon because we’re all entitled to our special preferences at least once in a blue moon. Right?

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Travis September 8, 2009 at 8:07 am

Well said… all too often we get into the mindset of needing the latest and greatest, which often isn’t true!

That being said though, if you DO have the cash to spend, I don’t see any issue with rewarding yourself at times for the hard work.

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canucanoe2 November 28, 2009 at 1:15 pm

Hey, tim is stupid. Hydrocodone IS codiene. It’s just in a water soluble form. A mg of hydrocodone is the same strength as a mg of codiene. It just doesn’t stay in the body as long.

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