Thursday, March 1, 2012

Free Furniture

Most folks buy furniture on time.  Really stupid folks rent-to-own furniture.  Really smart people get their furniture for free.  How can this be done?  Buy quality furniture!

The other day, driving through rural Florida, I nearly drove off the road when I saw that stupid Aaron's dog on a billboard, with the caption, "Credit is hard, renting is easy!"


It reflects the mentality that furniture is "expensive" and that the only way to get a chair or a television is to borrow money.  And this is sad.  Because furniture should be free.

Free?  Yea, you bet.  If you look at the overall transaction costs and not just in terms of monthly payment.  Let me explain.

Most of the crap you buy in life is just that - poorly made junk that is worth pennies on the dollar the moment you purchase it.   You use if for a few years, and then throw it away, adding to our landfill problem.  Or, if you are a hoarder, you keep it, on the premise that "you paid good money for it" and thus cannot bear to part with it.

So those old Aeropostal shirts hang in your closet, worn out and hopelessly out of "style" and worth maybe 25 cents at a garage sale, when you paid $29.99 for them new and wore them maybe a year.

It is a huge loss, in terms of depreciation.  And sadly, most folks think this is how every purchase is - and should be.

In the realm of furniture, most Americans buy crappy furniture made of particle board - and many finance it on  consumer loans or credit cards.  The furniture rarely outlasts the payment terms, and eventually, that pink velour sectional sofa ends out at the curb, stained, unloved, and with the padding all coming out, waiting for the trash truck.

And Mr. and Mrs. America go back the loud-advertisement furniture store and buy a house-load more of this crap.  Repeat ad infinitum.

I had neighbors like this, in Connecticut.  They went to the place that advertised on the radio and furnished the whole house on credit.   The wife was so proud of their faux suede leather sectional and chrome ball lamp, as well as the glass coffee table with chrome legs.  It all looked so modern and clean!  And she would make us take off our shoes before we went into her show-room like living room.  It was a status thing (white trash status, but status nevertheless) and every month, they sent off $99 to the finance company.

10 years later, they had none of that furniture.  The faux suede did weird things after about three years, and its particle board and cardboard frame, stapled together, started to come apart after repeated sittings.  And the cushions started to take a set and the cheap chrome on the coffee table started to corrode and peel and the glass scratched.  It all went to the curb or to goodwill, and they went out and bought new crap.  Well, after the divorce, I am sure she did, anyway.

Is that really a good value, in the long run?

But, suppose that you bought a piece of furniture that was well-made, but not flashy.  And you had it for maybe a decade.  Maybe 20 years.  Maybe a lifetime.  And after all that time, the piece of furniture was worth, well, about what you paid for it, maybe more.

The overall transaction cost is zero.  When you decide to sell the furniture, it is worth more than you paid for it.  It is less an expense in life, than an investment.

How can this be done?  Well, for starters, by not buying crap furniture from those loud furniture stores which sell trendy crap that is poorly made.  How do you know what kind of stores these are?  Look for the big ads in the newspaper and loud ads on the radio and TeeVee.  Right there is the police tape marking off these places as raw deals.

Second, don't be in a hurry.  IKEA and many crap furniture stores sell the idea of "having it all now" - furnishing your entire house in one fell swoop.  IKEA is famous for its "This entire room!  $1999!" ad layouts.  The loud furniture stores are famous for their "bedroom suits" and sets - entire "combos" of "matchy-matchy" that you can plop down and start making payments on.  But none of this rarely lasts.

Most of our furniture today is from Stickley.  It is solid quarter-sawn oak which is strong enough to jack up a car on.  Every damn piece of it.  And over time, it holds its value, significantly.  Since it basically can never wear out, you will have such furniture for the rest of your life.

Now of course, that kind of furniture is expensive to buy.  A simple Morris chair can cost a couple of thousand dollars.  But again, since it holds its value, over time, it ends up costing little or nothing in the long run.   Such a chair will easily outlast 5-10 $499 recliners in your lifetime.  Which is really cheaper?

"But," you say, "I have no cash!"

Well, relax.  There is no need to furnish an entire house all at once, and in fact that is one good argument for owning a smaller home.  Many people go into debt trying to furnish these mini-mansions, and end up with room after room of crapola furniture.

You are better off saving up for quality furniture, one piece at a time, than going into debt to have rooms full of crap, now.

And yea, I have had to sleep on the floor while saving up to buy a new bed.  And yea, even fairly recently, too.  But I would rather pay cash for a good bed, than go into debt for crap, just so I can say I "have it all now." 

Quality furniture can also be had, secondhand, at some attractive prices.  And over the years, we have had a number of pieces that we bought at "antique" or "junk" shops, which were well-made hardwood pieces that lasted decades.

However, you have to be careful shopping in a "junk" shop, lest you buy junk.  Buying someone's clapped-out particle-board furniture is never a good bargain.   Just walk away from that sort of crap, entirely.

Similarly, never buy an "antique" piece that has wobbly legs, delicate caning, or looks as if it will fall apart with any sort of use.  Fragile antiques are not functional - leave those behind.

And no, you can't "fix" broken antiques.  If you see a chair in a shop with a bad leg, chances are it will always have a bad leg, and if you examine it closely, you will see where some other poor fool tried to "fix" it earlier.

Our dining room "set" is an example of such a find.  The table was free - a family piece that was sitting unused in an attic for many years.  It is 12 feet long, and the top is made of two planks that are 2" thick and 16" wide, each.  You just don't see pieces of lumber like that very often these days.  It has two large carved pineapple bases and is strong enough to support a car.  It is very old and has many scars, but it also has character.  And it is worth some money and has appreciated in value over time.  Even if we had paid for this table, it would still be a positive cash-flow deal - it would always be worth more than we paid for it.   It will never go to the curb as a pile of broken twigs, like the laminated crap that sell at Joe's Discount Furniture Outlet.

Along the back wall, we used an old church pew for seating.  We paid maybe $200 for this pew and paid another $100 for a cushion (at, I kid you not.  Where do you think the church's get their pew cushions?).  On the other sides of the table, we have a set of eight solid-oak chairs that are from the 1940's and appear to have been from a school or office.  These are solid chairs, not rickety or wobbly.  I think we paid $200 for the set.

Someday, we will likely downsize to a small retirement home, and a 12-foot dining room table will be out of the question.  And when that time comes, we will sell the table, the pew, and the chairs, for far more than we paid for them.

Free furniture.  It ain't that hard.

And so on, down the line.  Good quality furniture lasts forever, and you can buy it new or used.   But junk falls apart, and you keep having to buy it, again and again.  The rich buy quality, and keep it forever.   The poor buy junk, over and over again, and remain poor.

It is like the parable about the cardboard soled shoes.  Poor folks, back in the day, would buy pair and pair of cardboard-soled shoes, even though they rarely lasted more than a few months.  A simple pair of leather-soled shoes would last 10 times as long but barely cost twice as much.  But the poor look only at purchase price not the overall transaction cost.

Which is why they are poor.

Now don't get me wrong - you can't consume your way to wealth.  If you read this article and use it as an excuse to go out an buy all-new furniture, you are entirely missing the point.

But it pays to look at overall transaction costs - the back end as well as the front end.  Most people look at purchase price on items, and then fail to think about overall value, in terms of cost of ownership as well as depreciation and eventual resale.  And this is probably because most stuff you buy has no resale value at all even after only a few months.

But some things do hold their value.  And quality furniture made of solid wood, with timeless styling, is a case in point.

Solid wood, solid leather.  This chair will last decades, if not a Century.  But beware, the cheap furniture stores are starting to sell poorly-made knock-offs out of particle board and veneer.