7 big lessons I learned about money from shopping at thrift stores for the past 30 years
Don Arnold / Stringer / Getty Images
I've been an avid thrift-shopper for the past three decades. Beyond a simple hobby, I have to admit thrift-shopping is a bit of an obsession for me — it channels my inner treasure hunter and provides an endless source of entertainment. (I'm a cheap date.)
And besides saving me thousands of dollars over the years, it's also helped me learn a few important financial principles, too. Here are seven money lessons I've learned from thrift-shopping.
Herry Lawford / Flickr1. Retail markups can be massive
Retail markup on common items is so steep it should make most store managers blush. Between wholesale and retail, eyeglasses can be marked up by as much as 1000%, jeans 350%, and furniture 400%.
While I don't begrudge anyone turning a healthy profit, I don't want to be the one to pay it. Thrift-shopping helps maximize my budget by minimizing my exposure to excessive markups.
2. Depreciation is a powerful force
Depreciation is the reduction in value an item experiences over time, usually due to wear and tear. But depreciation can happen without any wear at all. Drive that brand-new car off the lot and it's immediately transformed into a used car that's worth about 25% less.
At a certain point, the downward force of depreciation becomes so significant that those of us who buy second-hand are getting great items at or below the manufacturer's cost of production.
Yuya Shino/Reuters
3. Retail discounts aren't so great
Considering retail markup can be a few hundred percent on some items, even the most generous discounts seem cheap by comparison. Why do we get such a charge out of saving 15% percent on an item selling 400% above wholesale?
When we purchase a new item in a department store, we're not just covering excessive retail markup; we're also shouldering the biggest depreciation event — taking an item from coveted new status to scorned used status. Those of us who buy second-hand are side-stepping each of these forces and saving money in the process.
See the rest of the story at Business Insider