Valuable to Worthless

by Mr. Cheap

Everyone is familiar with the idea that a new car loses value the instant you drive it off of the lot. Having it sit there shiny and new is worth something that disappears when you make the purchase. A number of other products have this same property, although we sometimes delude ourselves into thinking they don’t.

I’m not saying that people shouldn’t buy these products (if they improve your life, why not?), but just that we shouldn’t fool ourselves into thinking we’re sitting on something valuable that could be sold to someone else if we no longer want to own it. Any value these things provide is restricted to us as the owner and perhaps we should view their use more as a service, comparable to our daily newspaper or utilities.

Furniture and Appliances

Meg at World of Wealth recently got a used fridge from a tenant in exchange for $275 in rent. She was quite pleased as the unit didn’t have a fridge, and she would have had to buy one before she could rent it to the next tenant. I actually think she over-paid. Having just one property (and my first tenants are still there), I haven’t experienced this personally, but long term landlords get SWAMPED with furniture. A number of people seem to take the view that its easier to just buy replacements than deal with moving it.

The last place I lived in Toronto, when I was looking at it the landlord asked me what furniture I had. I admitted that my current place was furnished, and I didn’t have much. With a smile she told me she could provide me with any of the basics (bed, tables, chairs) until I bought my own, or if I was content with her’s I could just use them. We went over to another one of her properties and in the basement she had a mini-furniture store of things that had been left behind by previous tenants.

My hat is off to landlords who offer a “furnished” suite at a premium price. First they get a free furniture collection from tenants moving out. All they have to do is store the things, than they can get monthly payments from something they got for free. Smart.

Books

I *LOVE* books and had quite a collection that I eventually got tired of moving (a box of books is HEAVY). Having assembled them over the years, I was convinced that they’d be worth at least a couple of bucks to someone. When I got looking into it, it turns out that used bookstores typically just give you credit (so you’re not really selling them, just exchanging them for a smaller number of someone else’s books). Selling on-line is more trouble than its worth (people will just want to buy a couple of books each: meeting them or shipping to them is a pain in the butt).

Eventually I just gave all my books to friends who might be interested (and told them to toss anything they didn’t want or when they were done with them). Those I couldn’t find a home for, I turned in at my home town used book store and gave the credit to my family (so we’ll be getting free books for the next few years).

A friend recently inherited a bunch of books from a boyfriend who moved away and was looking forward to making some money selling them. I laughed and wished her good luck (in the end I think she left them out in her office for anyone who wanted them, then threw the remainder in the trash).

Jewelry

I read once that the early appeal of jewelry was that it was wealth in a concentrated, portable form. Beyond looking nice, it also represented a worst-case security policy for women. If they needed to flee their home, or if their husband unexpectedly passed away, jewelry could always be exchanged for the necessities of life for them and their children.

Da Beers’ well known sales pitch “A diamond is forever” has made sure that few people actually try to sell their diamonds. Sadly when they do, they often find its much harder than they expect. One amusing anecdote involves a computer guy who stole money from the bank he worked at, transferred it to Swiss company in exchange for diamonds, and then couldn’t sell the diamonds. When he was caught, the bank was initially relieved, since they figured recovering the diamonds was as good as getting the money bank. Then they tried to sell the $8.3 million in diamonds and couldn’t find a buyer. The same article relates the story of diamond thieves in New York that sold $50k of diamonds to a fence for $200 (who in turn wasn’t able to sell them).

With artificial diamonds that can be inexpensively created (and are identifiable only because their crystalline structure is too perfect) I would be very nervous buying a diamond that I expected to retain its value in the coming years.

Is there anything you’ve encountered or purchased that you thought would be easy to resell but turned out to dramatically lose value after purchase?

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{ 10 comments… read them below or add one }

1 guinness416

Okay, books. I’m an ex book-accumulation addict too and shifted a lot of non-fiction for quite decent cash over time on half.com (which I really wish existed for canucks). Selling – although obviously for pennies on the dollar – works for a bunch on just one subject sometimes too. And the nerdier the subject, the better! My husband has sold a collection of film-school books, a big box of computer books (all to do with one subject, but I couldn’t tell you which one), and all his maths texbooks in one-shot deals on craigslist. Not for big bucks, mind, but certainly more than you’d pay someone to take them away. Fiction is really rough to move, though.

(PS I stumbled on a real ebay goldmine a few years back by selling some Irish books and other bits and pieces about our UN peacekeeping missions. There’s a real market for UN-geek stuff on there. Who knew?!)

2 Gates VP

OK, I’m not kidding you, I got a De Beers diamond ad in the skyscraper on the right. Good old Google Adsense.

Books I too am a collector, I’ve started to take the approach that I only collect what I would bother to lend out. If I don’t think that I or a friend should read this, then I just move it out. Honestly, I really like my books, but there are tons of things I’m never going to lend or have time to re-read. Neil Gaiman’s Sandman, 7 Habits, Men are from Mars, this stuff has already circulated. “Don’t spend your raise”, “Rich Dad, Poor Dad”, this stuff just gets shipped.

Oh yeah, wedding rings: we bought custom-made engagement/wedding rings with emerald centerpieces and tiny diamond accents (because they looked good for $100). Most of the “value” of the rings are in the gold anyways, so diamonds seemed kind of pointless unless we really liked looking at them (I’m not saying emeralds are more valuable, all things equal we prefer the look).

That stated, the nice thing about the emeralds is that we have really striking rings at a fraction of the price of diamond rings.

3 Matt

Some people think that their CD and DVD collections are worth a lot of money because they paid a lot for them but the reality is if you try to sell your $25 DVD you’d be lucky to get $2 for it. I once tried selling a sealed DVD (I got it free and didn’t want to watch it) and I had to convince the guy to take it at all. In the end I got the same $2 as the remaining DVD that i was getting rid of. I don’t understand why people think these items have any value (that 200DVD library that cost you $4000+ is probably worth less than $400).

Another thing that people think retains some value is electronics (again I’m not sure why people have this false idea).

4 mjw2005

Ok…with DVDs, CDs and books you are correct…generally worthless, maybe a buck to 5 bucks each if your lucky…

but with electronics…some are quite collectible, most of the big brand japan stuff is worthless after a couple of years, but some of the higher end niche brands have cult followings and command high prices for years…just check out ebay…also rare electronics such as Minidisc units and some turntables can command some decent prices…

5 Mr. Cheap

Guinness: Very cool that you managed to get a bit of cash for them. I wonder what would be the best way for most people to identify “gold mine” overlooked collectible books?

Gates: Too funny. They didn’t get their money’s worth for that ad! Good for you for bucking the diamond trend and getting gemstones that you guys liked for yourselves! A buddy of mine just proposed with a sapphire and I told him how impressed I was that he wasn’t a diamond sheep.

Matt: CDs and DVDs are another excellent example! How much longer until they’ll be like VHS tapes that you can’t give away?

mjw2005: Hmm, my parents have an old IBM XT that they’re convinced some museum will be interested in one day, maybe they should start looking for a collector now?

6 Plamen

I used to buy books (mainly business and IT) like crazy several years ago and I have to give them away 2 years ago when I decided to move to Canada. Now Im much more frugal and prefer visiting the local library or buy at garage sales where I can have a deal for 50c to $2.

7 Shevy

Yeah, what *can* I do with 3 boxes of VHS tapes? I’m not talking about the season boxes of a TV series, but the stuff I taped off of TV on $2 tapes. I’m sorting out the ones I really do want to keep (like the shows that haven’t come out on DVD) but I hate the idea of sending the others to landfill.

8 Four Pillars

Whenever we’ve had a yard sale, we always have lots of books and they are a tough sell indeed. I usually end up giving most of them away – and some end up in the garbage.

DVDs and CDs are excellent sellers but for $1 each!

Diamonds are a ripoff!

Mike

9 Jane

Any books that you don’t sell can be donated to your local library. If they can’t use them, then they will try to sell the books.

10 Mr. Cheap

Jane: That’s definitely a better idea than tossing them in the trash!

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