Buying Quality
I’ve just written about how overpriced the world has become and how difficult it has become to capture value in today’s world of runaway generational wealth expectations. What I mean by that is that people seem to feel like they are being stupid if all they do is get by and earn a fair wage. Everyone wants to own their own business and sell it at some wonderfully high multiple and spend their remaining days on easy street playing golf or maybe pickleball. That means that people have to find a way to increase the value added of what they offer or simply get paid more for what they do. I last wrote about that all being focused around residential ownership. People’s homes are generally their biggest asset so that is not illogical in a world where extraordinary appreciation in home prices have been more the norm than not. The British used to say “safe as houses” back when railroad investments were considered risky, and investment in houses was considered low return, but ultra low risk. That is less the case now and homes can both rise and fall in value, but generally, it is the most leverageable asset because the values have been holding and trending up. Leverage is a force multiplier. Everyone knows how it works. More debt and less equity. More risk, but also a lot more return. That equation works great in an upward market and lots a people are ready to play that game to the hilt if given the opportunity, and that means doing it over and over again as a substitute for earring an honest living (as judgmental as that may sound). And if that doesn’t work, then people are back to finding a way to pump up their income some way to accumulate capital to take another run at the leveraged real estate game. If that sounds like a vicious cycle, it is.
Not that long ago I had a plumber from a big plumbing outfit come over and check for some leaks in the toilets ( I was losing water somewhere). He replaced two toilet tank valves, each of which cost about $9 apiece according to Mike, who had to buy thousands of them for his hotel chain every year. He spent about 45 minutes at the house and handed me a bill for $450. That compares to a plumber that Handy Brad brought in to replace the shower body and faucet/regulator for the guest bathroom shower. He was at the hosue for three hours, soldered in the shower body into the wall and installed all the fixtures. He handed me the bill for $180. Handy Brad explained that the plumber lived in the trailer park at the bottom of the hill next to the Freeway. He said he was living there to save money to be able to afford to buy a house for his family. He wants the same thing that everyone wants, but he is going about it in a very different way. It sounds like a cliche and an old E.F. Hutton ad, but he has chosen to do it the old fashioned way. He has decided to earn it. I will be using him whenever I need a plumber.
Last year I needed some trees trimmed. My brother-in-law recommended a guy he had used many years before who he felt was hungry for business and was good value. He came over and bid $10,000 to trim the trees on the entire property (only 2.5 acres). I thought that was too much and I told him no whereupon he offered to do the north half of the property for $5,000. On my property, 85% of the trees needing trimming are on the north side. I recognized his pricing adjustment as less about scaling back the work and more about recognizing that I was not the easy mark he hoped I would be. He had estimated this as a two-day job and he took four to do it with his full crew. He redeemed himself with me by doing a great job and fully earning his $5,000. I would use him again, but at the same time, I had Joventino trim up the South side trees, which he did in half of a normal work day, which meant it cost me $130. Joventino represents the epitome of hard-working excellent value in day laborers. Handy Brad’s buddy Omar, who helps me with heavy-lifting chores is next in that line-up, followed not so far behind by Handy Brad himself.
Value is a simple equation that is made up of one part price and one part quality. The world is changing so fast these days that its hard to know from one day to the next where quality resides versus just the latest technological fad. I own a 2016 Tesla X, which defies the logic of not buying new products from new companies, especially in an arena dominated by the power companies of their era (in this case, the auto companies). My Tesla is a gem and after almost seven years, I wouldn’t dream of trading it for anything newer. I suspect that it’s quality would be hard to replicate in newer Teslas that have undoubtedly been value engineered to the point of being like most other cars in terms of reliability. I can’t swear to that, but experience tells me that when you own quality, you should recognize it and not try to upgrade it. I own other things that I consider of high quality and sometimes they come at an equally high price and sometimes, surprisingly, not so much.
One of my freshman college assignments was to go to the campus store and find some item for under $1 (this was in 1971) that I considered of the highest quality and then to write an essay about what made it so. The fact that I remember the assignment all these fifty-two years later would suggest that it was, itself a high-quality exercise. I remember the item I found for $0.99. It was small, one-inch-square machined aluminum magnifier set with a precision optical lens and had two hinges that allowed you to fold it into a magnification stand or fold it together for storage. I wrote of many reasons why this little instrument was very high quality and even better value. That assignment caused me to always have an eye on quality.
I have recently encountered two products which have pleasantly surprised me on the issue of quality. Strangely enough, the realization came because both products suffered a failure. The first was a product that has a wonderful brand name. It is a ceiling fan called a Big Ass Fan. I have four of these in my home, three regular sized ones in the Master Bedroom, the Dining Room and the Office and one extra-large one in the Living Room. Besides their wonderful aesthetic (we have the Haiku model in white), their technology is equally impressive with features that turn on the unit when the temperature hits a certain level and a person in sensed to be in the room. This can all be adjusted through a smart home app as is the case with most products these days. The other day, when I started up the Living Room fan for the first time of the season, it failed and would not transmit the signal to allow for automated use rather than manual use with the infrared controller. I called the company, they diagnosed the issue and said they would send me a replacement control board plus an upgraded Bluetooth controller and would do so at no charge.
Kim has recently had a problem with the Waterstone kitchen faucet, since the handle would droop and slightly oven the valve rather than keep the water off. My quality plumber said it was in need of a new cartridge. I called the company to buy one and they quickly told me that they would send me a new one gratis and send me a link to several YouTube videos that would explain how to change the cartridge. In the course of watching one of the videos, I learned I could fix the drooping problem even without a new cartridge. I did as suggested and now will have free spare cartridge should I encounter another problem with this high quality faucet.
Quality comes in many forms. In this day and age, I find it refreshing that buying quality is rewarded by good service that seeks to deliver satisfaction without trying to maximize the immediacy of revenue, but rather through a reputation for being the best product with the best service standards. Big Ass Fans and Waterstone have joined the ranks of such high quality products.