Peak Things

Last year, I was looking at buying a car. It became a long-running ordeal to find just the right car: one that would let me get to Napa or Tahoe on the weekend, or make it easy to car camp, and haul friends (or maybe a dog?!) around while doing it. It’s a pattern I frequently fall into; spending an inordinate amount of time acquiring Things that would let me do stuff.

If I’m being honest with myself, the act of buying a Thing in order to enable the ability to do an activity is often more immediately rewarding than actually doing it. Doing stuff require a lot of planning, and preparation, and stress coordinating with friends. Buying Things doesn’t have any of that.

Of course this is a horrible habit. I spend money to enable me to do stuff I don’t actually end up doing, and end up with gear that goes unused.

The preferred situation is the exact opposite and the first lesson is to own less, do more.

I realized this at the end of last year and a lot of my travel this year has been a result. In fact, as I’ve become a nomad over the last few months, I’ve realized the extent of the Things I’ve bought and don’t need. As I write this, I’ve got a storage unit in San Francisco charging me $100/month to hold onto that collection of Things. Much of that, I rarely need and goes unused even when it’s handy in my apartment.

This got me thinking about CapEx versus OpEx accounting concepts.

For those that haven’t encountered them before, CapEx (Capital Expense) and OpEx (Operating Expense) are two different ways about thinking of expenses in a business: CapEx is large purchases that help run the business (e.g. buildings and machinery), while OpEx are expenses that go into operating day-to-day. I don’t want to go too far down the accounting rabbit hole with this analogy but essentially OpEx means you pay for something as you need it rather than buying it up front. Yes, that something likely costs more in that form, but you avoid the risk of not actually using the thing to its full value and you don’t have any of the costs associated with ownership (maintenance, storage, insurance, etc).

What’s OpEx for normal people? Simple: rent things.

This isn’t rocket science by any means. ZipCar makes it easy to rent a car, Breather and ShareDesk make it easy to rent desks. There’s a half dozen services for renting outdoor gear in SF (I also recognize that SF and big cities in general make this a whole lot easier).

Think of it like this: Depending on your age, you probably owned a huge CD or DVD collection. Today, I’m betting Netflix or Spotify has replaced most of your optical disc purchases. What in your apartment would be better as a monthly charge than a big pain in the ass when it comes to the next move?

But renting is not foolproof either. Renting takes time to find a source, pick up/return, which should be included in the total cost of rental, and items in high demand can run out. Case in point: snowshoes were in high demand over weekends in Seattle that they were completely unavailable. And the reality is that some things just don’t fit this model. Cars work well; clothes likely don’t.

I don’t think I can move everything to OpEx but for me, the second lesson is to strongly prefer renting over owning.

Both of these are obvious in retrospect but have triggered some big behavior shifts for me and when I get back to SF next month, I’ll be working on getting rid of that $100/month storage unit charge.

The big questions going forward are:

• How do I get rid of as much of the stuff sitting in that storage unit as possible in a time and cash efficient way? Craigslist is a PITA.
• How can I track the total cost of ownership and the total cost of rental of these different expenses so I can actually make an informed choice of when to use one over the other?
• What (if anything) of my current Things could I be renting out to actually generate money?

Very open to ideas on these and expect and update or two as I get further down this road.