“Kind words do not cost much. Yet they accomplish much.” – Blaise Pascal
Daily Nugget of Gold 1220
In our last session, we talked about a quote from Billionaire Warren Buffet:
“Price is what you pay, value is what you get.” – Warren Buffet
We did so, and because of this short format we confined ourselves of this wise saying as it relates to setbacks and things that don’t work out as planned. As with many short statements of wisdom, there are many, many places we can find this to be applicable. Let’s address another- the price of a commodity compared to the value of it.
Recently, your author had noticed the supply of serrated steak knives to be dwindling in the family kitchen. Over the years, here and there- one would break, another disappear, you know- that sort of thing. A while back, some of these were purchased years ago a dollar store. They held up pretty good, but in case you haven’t shopped much in a dollar store- since everything costs a dollar and the items they carry have to stay at that price point, some of the items suffer in quality as time and inflation take their toll.
We purchased some knives and while the handles were smaller they seemed reasonably sharp and suitable to the task of cutting things we needed to cut. A few trips through the dishwasher and we started to find the blades falling out of the handles, not good.
The relationship between price and value in this instance is interesting. Remember, the first knives we owned were from the same store, purchased years ago. They were of decent quality and served a long and useful life. They were the “same price” as the replacements, a dollar. What had happened over the course of time was that the dollar we spent years ago was worth far more than what it is today. In this way, we were attempting to replace an item of the same quality for what really amounted to much less money, in terms of the value of the cash.
Some of you are likely pulling your hair out by now, yelling at this page and saying, “Well, OF COURSE they were CHEAP, dummy! Why would anyone buy knives from a dollar store in the first place??? Yeah, we get your point, but we were indeed happy with having knives from there before, they served the purpose well, even if they weren’t “state of the art”.
At this point we now understand that for this item at least, a different venue in which to purchase them is in order. Just so we are clear, a dollar store is a very useful place to shop and for now they have been handling the erosion in value in ingenious ways- just not for steak knives.
Question of the Day to Ask Ourselves
“How shall I strike a balance between price and value?”
Copyright 2014 Kevin Littleton, all rights reserved.