Monthly Archives: October 2011

In Praise of Quitting: Coming to terms with Sunk Costs

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Sunk Costs: Something to avoid in a sailboat

Sunk Costs: Something to avoid in a sailboat

On the way into work this morning I listened to a great Freakanomics Podcast on the economics of quitting. The Upside of Quitting is a great listen if you are new to the Freakanomics team of Stephen Dubner and Steve Levitt.  They apply economics theory to a wide range of topics from hitchhiking to child rearing and make the application of The Dismal Science a compelling listen. Their book, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, is an entertaining primer on practical economics.

So how does being a quitter and economic theory have anything to do with our plans, cunning or otherwise? Well, at some level, Melissa and I are trying to figure out how to quit doing what we do and living how we live. How does one quit living in a traditional house, going to a traditional job, and living a traditional American life? There are costs, financial, social and emotional, associated with such decisions and I am still struggling with how this is going to look on the other side.

In the podcast Dubner enlarges on the economic idea of Sunk Costs. Sunk costs are expenses that have already been incurred and cannot be recovered. As we look around our home, I cannot help but consider what may well be considerable sunk costs for living as we have. The garage fills with more and more items that are destined to be sold at fractions of their original value or donated outright and it is liberating and crazy-making at the same time.

The trap of mourning sunk costs comes when we expend time or effort  to recover some of its value beyond an item’s worth. Anyone that has invested in a losing stock and held on to it as  a company spiraled into bankruptcy is familiar with the idea of the sunk cost fallacy. A purely rational evaluation of a the stock’s value and prospects should provide sufficient warning that the stock should be sold. But humans are seldom rational, and the sunk cost fallacy hinges on our optimistic valuation of the money or time we have already spent.

And so I look at furniture and other household goods being staged out in the garage and optimistically over-value its resale hoping to recover far more than I actually will. Likewise,  I continue with my current job at least in part because I have already put so much time in with this company and would hate to loose all that time and effort. These aren’t perfect examples of sunk costs but they serve to highlight our conflict.

Melissa has written about our furniture collection and the emotional process of letting go of items that she has worked so hard to restore. We both have put most of our adult lives into creating a space for ourselves and our children to grow and feel comfortable. Letting go of these sunk costs is not easy. Hard hearted economists like Steve Levitt might be able to jettison old furniture, but I hope Dr. Levitt will forgive us for lingering a bit over the loss even as we look forward to the the new possibilities our future life affords.

Craigslist Lament

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The Shabby Chic table: Sold for $50.

  So, it’s been awhile since I’ve updated this blog and I thought I better get to it. This is the time of year when I feel most like doing nothing; just laying around in bed eating bonbons all day or looking at boats on Yachtworld.com ( a personal weakness that borders on addiction).  But since I don’t eat bonbons anyhow, and I am supposed to be using this blog as the proverbial fire under the hind end, I’ve actually been making progress at home, even if not on the blog.  See?  It’s working!

When I last posted, I was commenting on the sheer number of pieces of furniture we’ve collected over the course of a 29 year marriage. I’m coming to terms with disposing of some of those pieces and now I feel the urge to comment about the use of Craigslist as a tool for selling unnecessary items.  To be more precise, I feel the urge to complain about my Craigslist experience.

The promise of Craiglist, that of easy, free posting of unwanted items which will soon be sold to people just waiting to buy, is a fantasy. At least the second part is a fantasy. Yes, the posting is free, and fairly easy, even if it does take some time. But the part about people waiting to buy said items really must exist only in my rather too-vivid imagination.  To date I have spent around 4 hours photographing and posting items on Craigslist and I have sold exactly one item, a little white Victorian table, for $50, which is $25 less than what I listed it for. That amount of work has earned me $12.50/hour and 1.5 square feet of floor space.  I think the only reason the table sold is that I used the term ‘Shabby Chic’ in the title.

We’ve had a number of emails asking if this item or that is still available, and then when I email back that it is available….. NOTHING! What is wrong with these people? Or maybe they don’t actually want the item, only to know if we still have it, like they need to be reassured that it will be there whenever they are ready.Or perhaps they email only so they can laugh as they expertly dash our hopes of an easy sale.  Or maybe they are  lonely people who email others just for the joy of getting an email back.

I wonder if the problem is deeper than that, however. I wonder if our sales problem lies more within a change that appears to be happening across the country, if not across all western nations. I wonder if the problem we’re having with selling our ‘stuff’ to others is because overall, people are getting tired of accumulating all that stuff in the first place. It’s no accident that there are so many books on downsizing, clearing clutter, etc. and that there is a movement to build smaller houses. It seems like collectively we have already ridden the crest of the wave that allowed us to collect and sell lots of ‘things’. I wish there were data that compared the relative ‘success’ of a garage sale now to one held 10 years ago.

And although many people do not have the extra cash now that they did 10 years ago, this ‘buying less’ mentality is not limited to the cash-strapped masses. CnnMoney published an article this month stating that even the wealthiest people in the U.S. (defined as those making more than $130,000/year) will be buying fewer gifts this Christmas. Maybe I’m not defined as ‘wealthy’, but I can assure you I am among those who will buy less. Patagonia recently announced they are starting a new campaign to get people to buy fewer things, focusing on buying better quality and making those things last. Why, that’s downright UN-AMERICAN! Frankly, it looks like just a smart marketing strategy since, according to a recent New York Times article  people appear to be holding onto things longer across the board; making them last; repairing rather than tossing things and replacing them. Our mothers and grandmothers could give us a lot of advice about this.

Putting two and two together leads me to believe that his evolution of values we are experiencing means that eventually there will be fewer items for sale on Craigslist. So you’d think that people would be rushing to buy our things in anticipation of the times of scarcity! Don’t these people prepare for the future? Maybe I should re-title my listings: THE END TIMES ARE UPON US! BUY THIS NOW BEFORE IT’S TOO LATE. ALSO: SHABBY CHIC!!!  I’ve heard that the more exclamation points a listing has, the more people pay attention.  No? Okay. But if that doesn’t work, we’ll have to have a garage sale in December.  Cash only, you pick up at our Lakewood location. Haggling cheerfully accepted.

 

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Collecting Furniture: One Family’s Story

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Living Room Furniture

The velvet chairs, an antique oak coffee table, and my mother's buffet.

We have a problem here at The Cunning Plan household. This is going to be a sticky one, taking all of my resolve and much of my energy in terms of putting the proverbial money where the mouth is, if you get my drift. I may have to rely on Mike for strength. To be succinct, our problem is that our daughter,Claire,  is moving home for awhile as part of her own cunning plan for the future. It’s not what you think. This isn’t a ‘rebound kid’ situation. She has a great job and is a fully formed grownup. We welcome her back and look forward to having her. But not her stuff. We don’t look forward to her stuff.

Actually, to be brutally fair, it’s not really HER stuff we’re not looking forward to. Oh, sure, there will be the usual transition time where we all learn to live differently in the house once more and people wrangle for personal space for their belongings (NOT in the middle of the sitting room, okay?)  But we’ll get through all that. After all, we’re all adults here. The real problem is that she is bringing home more of OUR stuff in the way of furniture. Claire has the most adorable apartment in the world. It’s in an old Victorian house, has a bay window, hardwood floors, and an exquisite little fireplace. And it’s almost completely furnished with our furniture. Ouch. She’s going to be bringing an apartment full of furniture back home. Do I need to explain this further?

How does a mild-mannered family of 4 collect this massive amount of furniture (asks the curious reader)?  Here’s the gist of that:  Mike and I have been married for almost 30 years. Most people collect a myriad assortment of furnishings over that amount of time. In addition to the sheer number of years, I have a tendency to be somewhat…’creative’. Yes. That’s the word. Creative.  And while I love really good, solid furniture that stands the test of time,  I am pretty frugal when it comes to purchasing furniture. Okay, fine! I’m cheap when it comes to purchasing furniture. There is something about putting down several thousand dollars for, say, a couple of chairs, that just gives me pause. I’m getting better about that as I get older, but for the greater part of 3 decades I have had an alter ego that has landed us in this mess. Who is this alter ego, ask the inquiring minds among you? Melissa White: Furniture Stripper!

So much of the furniture we now own are pieces that I found for almost nothing at a rummage sale, or thrift shop, or the like and then nursed back to life. Pieces like the solid maple gateleg table I bought for $25 when Claire was about 5. It had several layers of paint on it. I stripped it, sanded it, stained it and painted the legs black. It’s beautiful. Or how about the solid maple dressing table with Queen Anne legs that I bought from someone for 20$ when Claire was 3? It’s heavy as all heck and has graceful lines. Again with the stripping, sanding, staining. It’s a fantastic piece of furniture and has been used as her dress-up table, my desk, and a sofa table over the years. It’s very versatile.

Then there are the two overstuffed chairs with rolled arms I bought because I knew they were quality pieces. I paid the best upholsterer in town to do them in taupe velvet. They are classic. I probably cannot buy chairs of this quality anywhere. And there is the very old steamer trunk I bought when I was in highschool. It was my first ‘antique’. I refinished the wood on the outside, wrote my name on the inside, and took it to college with me.

More furniture

One of the many upholstered pieces I've resuscitated, and old chest that will likely go, and a corner of the steamer trunk.

This is only a small sampling of the pieces I must decide about. (Oh, those velvet chairs are staying. Let’s be clear about that right now.) So much of our family’s history is represented in these pieces. Many of them I bought when the children were young. We couldn’t afford to buy nice furniture without going into debt, and we didn’t want to do that. But I wanted nice things. So I became pretty good at something I enjoyed anyhow. And we ended up with a home filled with priceless pieces that are personal and lovely and somehow make our home warmer than new furniture ever could. I have an oak dresser that belonged to my parents when they were first married. I have two large book cases that my mom got in the early 1970’s. I have a solid wood buffet that my mom got when I was a young child, now refinished with funky green glass handles.  I grew up with those pieces, and they are really nice. I would choose them again today. They are irreplaceable. How could I possibly part with them now? These choices are going to be really hard.

I had a dream a few nights ago that I was back in college somewhere and someone had stolen my bike. I was late to class and arrived pushing a shopping cart with only one item in it: a bike lock. I pushed that cart across the front of the class, in front of the teacher, and then all the way to the back of the class before being seated.  That dream is pretty clear to me. I do feel as though I am learning new and hard things, lessons for which I am only marginally prepared. I have no idea how I’m going to get from one “class” to the next, as though somehow I’ve been too cavalier in protecting what is mine. I am left with the lock, but my bike is gone.  It’s apparent that between releasing myself from the ownership of things that are intimately entwined with my personal history and publishing this blog to share that process, some part of me is beginning to feel like a homeless person on parade.

I know this feeling will pass. I realize it’s all a part of the process of letting go. But I’m reminded, once again, that reading about something is so much easier than doing that thing. So Peter Walsh, if you are reading this blog (as if…) please be gentle with me. Because I’m not going to promise that I can let everything go in one fell swoop. Maybe there is a reason why this is a 4 year plan.