Responsible prudent savers. Totally ants.
Scott Sumner, lingua in bucca, swapped Formica for granite countertops and writes:
PPPPS. Yes, granite is very durable, which makes it investment . . .
. . . and of course saving too!
This, of course, goes to one of my hobbyhorse points – the exceptionally fuzzy line between "consuming" and "saving." The better way to view the world, IMHO, is one in which, beginning at some arbitrary point, we apply our time and existing stuff, through the media of institutions, to make more stuff, and that stuff varies in function, quality, durability, etc.
This also reminds me of a tangential point – young people, on average, probably do not travel anywhere near the optimal level. Travel can be expensive, but when you are young there are two factors that mitigate strongly in favor of travel. Firstly, you are most able to enjoy it. Let me tell you right now that future 50-year-old me would have had a way tougher time enjoying Mehrangarh than the present 26-year-old me. Secondly, travel is a perpetuity, and while most of their utitlity is illiquid, that’s as much an advantage as disadvantage – nobody can expropriate, steal, damage, or tax it.
This is much the same as education, which is why education debt is a bad idea, but while a college degree can be so expensive most people simply cannot fund it out of current consumption, an unforgettable month-long jaunt through India for two can cost less than $5000 including airfare, adequate lodging, and all consumption. Which is a lot, but if you have a young cohabitating pair with no kids making at least a combined $70-80k, as long as their rent isn’t too expensive and neither is drowning in debt it’s perfectly possible to save adequately for such an adventure over less than a year. And you could make a very strong argument that traveling while young is just as much "investment" (in something that produces a lifetime-long flow of happy memories and increased knowledge and wisdom, as well as fun stories to share with others) as "consumption."
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08/14/2014 at 14:57
Young people should travel more | Lions News Archive
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08/14/2014 at 15:18
Peter Varhol
I trashed you pretty good on your “leverage up on housing” post, but you have a point here. I am mid-50s, and have done a lot of world travel over the last five years, mostly for business, but also with an eye toward seeing new things. Accumulating “stuff” brings little lasting pleasure, but my trips to Spain, Switzerland, Estonia, Bulgaria, Dominican Republic, etc. will be with me for the rest of my life. I had some opportunity to do military Space-A travel in my 20s, and I didn’t, to my lasting regret. Travel whenever you have the opportunity, and you almost certainly won’t regret it.
08/14/2014 at 21:10
Peter Varhol
And . . . I’m willing to accept without further discussion that there might not be a large gap between saving and consumption. But in your older post, the example of a Twinkie is simply unhelpful to your argument. And you really turned me off on the coffee example, which I have never tasted because coffee smells pretty much like rat’s piss to me. And worse, from an economic standpoint, there are very few ways that a Keruig cup can in any way be thought of as saving, or haven’t you bothered looking at the (escalating) prices of those things? Let me help: http://money.cnn.com/2014/08/14/news/companies/keuirg-green-mountian/index.html?iid=HP_River