Bang for the Buck: Do You Really Get What You Pay For?

I'm a different kind of technology enthusiast when it comes to buying stuff. First, I NEVER buy top of the line, under any circumstances. Second, I pretty much never buy bleeding edge products. Even though I seriously love technology and gadgets, I've got a chart in my head for every purchase that looks something like this one.

We've all heard people spouting the "wisdom" that you get what you pay for. It's usually offered to someone who had their cheapest-product-in-category item fall apart on them. The problem with that is that the price/performance curve that the axim hints at isn't entirely straight and it doesn't go on forever.

For most products in the marketplace, especially geeky ones, there is a curve for how much you get in terms of measurable features for the money. Now, it doesn't measure things like prestige or intangible, feel-good benefits. However, I believe that if you wouldn't be happy with a purchase unless you could tell someone, you probably shouldn't buy it.

Regardless, to a large degree, you get more quality/features/durability, etc. (with some sloppy variations) as you climb the curve. A non-geeky example would be T-shirts. The more you spend, the better the stitching and the heavier the fabric. For $2, you get a pretty thin shirt only suitable as an undershirt. For $10, you usually get a dyed colored shirt on heavier fabric. For $15, you usually get a clever slogan or some other printing. For $30, you usually get some sort of souvenir value. However, at $50 or $100 or $500, you're pretty much only paying for a designer name, artificial scarcity or someone tacking things with an outside value (like diamonds) onto it. Thus, the curve on T-shirts probably peaks at about $30.

So, this curve works for a LOT of the stuff I buy and makes the purchasing decisions fairly easy. The example chart is for upgrading RAM on my home theater PC. Given the current configuration and what the parameters are for RAM that will fit, I can choose between 512MB, 1GB, 2GB or 4GB of RAM to put into the machine.

Here are the prices of each option at the moment:

512MB= $59
1024MB= $98
2048=$173
4096=$800

Now, just looking at the numbers, you could probably intuit what the chart shows graphically: there's a sharp change in what you're getting for the money at 4GB. That's where the peak is. If you take the price, divided by the MB of memory it gets you, you get the chart in this article.

Whenever you do this, you'll find such a peak. If you buy on the left side of the peak, you usually *are* getting what you paid for. If you're buying on the right side, you're either buying to impress someone, out of a genuine need (like a custom application that runs out of memory unless it has at least 8 GB of RAM) or some other emotional need.

Just so no one misunderstands, everyone buys some stuff based on some emotional need. That's just part of being human. I just want to make sure that I (and anyone who will listen) is doing it consciously. Living a deliberate life is something I strive toward.

Back to the RAM example, I'm probably going to buy the 1GB because I just don't need 2GB and 512MB isn't enough for what I'm doing, but I'm now confident that that's a decent decision.

I use this basic chart (and usually it's just in my head) to weed out the choices that shouldn't even be part of my decision. Of course, that's also why Apple's products rarely make it into the final round on a tech decision for me, but the needs and wants I'm trying to fulfill with a purchase just don't result in a curve that favors Apple.