Blog

Short blog posts, journal entries, and random thoughts. Topics include a mix of personal and the world at large.

Price of doing business

I think we’re all so used to free shipping these days (thanks, Amazon) that when we actually do have to ship a package, the actually pricing and be rather alarming. Absolutely nothing is immune to the recent high inflation. Parcel delivery shall not be exempt. It begs the question just how “free” free shipping really is. Surely the cost is baked into the (hefty) margins.

That, or retail giants have such enormous economy of scale that they get a hefty discount from logistic companies. Meanwhile, peasants like us have to pay the full freight.

I erroneously bought a part for my VW GTI. In order to get a refund I needed to pay for shipping back to the seller. Fair enough. Unfortunately, the item weights eight pounds, and I had to send it all the way to the opposite American coast. UPS Ground - the cheapest option - was $55! That is quite insane. If the part wasn’t worth magnitudes more than that shipping fee, I would have simply eaten the cost, or resell it on eBay.

It’s just the cost of doing business.

There may or may not be a solid business reason for coffee chains to sell a cup of drip coffee for nearly $4 these days - I simply don’t care. Paying that much for a plain cup of Joe is inconceivable. Because I’m old enough to remember when it was under $2. $4 was fancy latte territory. Even if I can afford it, my conscious won’t allow me to pay that much for store coffee. Thank god that same $4 can still buy you a hot dog and a slice of pizza at Costco.

My Keurig coffee maker and compostable coffee pods from San Francisco Bay Coffee will suffice nicely until deflation happens. If it happens.

Stop it. Get some help

Headlines are buzzing about the high price of new cars. The average transaction price for new vehicles in America is now over $50,000. The average monthly payment for a new car is nearly $750. As is the wont during these high inflation times (why would Joe Biden do this?), people are grumbling about the ever increasing cost of personal motor transport.

I do not have an ounce of sympathy for this situation. The beauty of the capitalistic system is that it takes two to proverbially tango. Sling all the greed accusations you want against the automakers and dealerships: car buyers still have to sign on the dotted line. The Truth in Lending Act dictates that consumers are given complete information on exactly what sort of loan they are contracting themselves for. No excuses.

The average new car may be selling for over $50,000, but a perfectly fine Toyota Corolla sedan can be had for $22,275 starting. It’s got power everything, and Apple CarPlay. And because it’s a Toyota, it will last forever with minimal maintenance. Now you may say that you need something bigger for your family. That’s a want, not a need. The Corolla is equipped with child seat anchors in the rear. For sure it’s not as convenient as a Toyota Sienna minivan, but do you have $40,120 starting for a Sienna?

New cars aren’t expensive - the cars people want to buy, are. If stretching your wallet for that three-row SUV is going to be financially difficult, then perhaps it’s just not in a cards for you. No one is entitled to a fully-loaded SUV with all the trimmings. Consumers’ unwillingness to purchase within their means isn’t the fault of the banks or the automakers. Let’s not strip agency - and blame - from fully functioning adults.

I will however get on Porsche’s case for raising prices so dramatically over the last year…

Staying ahead

I was disappointed to see the Greek yogurt - my go-to breakfast food of choice - increasing in price at my local Whole Foods. The staples are getting pricier again! At least my staples are. I’m still smarting over the price of coffee jumping 20% thanks to President Trump’s tariffs. Priced out of a coffee? That would take a whole lot.

I don’t expect rich people to have scars from the high inflation of the post-COVID period. Which is why we shouldn’t expect the Trump administration to back down from import tariffs. These people understand fully well that it’s the American customers paying the tax. They’re just all wealthy enough to absorb it without care.

Meanwhile, the rest of us are simply, hopelessly, trying to stay ahead of inflation. Especially during this time of uncertain labor markets (unless you are a genius A.I. engineer). My place of employment is going through a budget contraction. I’m lucky to have a job, never mind any hope of yearly salary increases to keep up with inflation.

That means the purchasing power of my current salary will continue to decrease. To combat it means having to let go of some other spending. The aforementioned pricier Greek Yogurt? Well, I typically buy a can of something to drink whenever I enter Whole Foods. I gave that up soon as I saw the 50 cent increase. I have water at home, thank you.

Similar choices who have to made in the future, so long as inflation continues, and my income remains static. Perhaps Progressive will raise the insurance on my car again. To compensate, the Disney Plus subscription will have to go.

What's the deal with ballpark food?

Honestly, why is it so expensive?

I mean, it’s always been expensive. But with the inflation of the past few years, it has gotten utterly insane.

For the first time this baseball season, I attended a Giants game in person. While game tickets have largely remained the same price due to the team sucking for the past years, the food prices at Oracle Park have gone straight up the scale. I can’t believe I paid nearly 10 dollars for a small hot dog - way smaller than what you can get at Costco for $1.50.

And my ballpark favorite - the chicken tenders and fries - is nearly $19! People seem happy to pay the high prices, too. The lines for food were long and plentiful. Maybe I’m the only poor amongst a sea of high-income earners. Probably true! The median individual income for San Francisco (2023 data) is estimated to be around $90,000 (Thanks, ChatGPT). I make less than that, so that means more than 50% percent of the population makes more than me. (I paid attention in math class.)

Anyways, because I seldom go to the ballparks these days (back in the early 2010s, I’d go to dozens every season), splurging that amount on food is no big deal. It’s all psychological, you know? Because I’ve experienced the food price being almost half of its current levels, it’s very painful to pay for that. My anchor point is way different than someone who’s never been to the ballpark and seeing the price list for the first time.

As I’ve many times before, I don’t adjust for inflation.

I am priced out

I was walking through my local Target store when I noticed a 20 ounce bottle of Coke now costs $3.19? And that is before tax! I am old enough to remember when 20 ounce bottles were 99 cent. A dollar bill at the vending machine was enough to obey your thirst.

Talk about things I am priced out of. Buying soda drinks at a store is one of them. Filtered water is just fine, thank you very much.

But then people would argue that saving that three dollar on a daily soda (or four dollars on a daily coffee) is not going to get me to buying a house. The math on that in the San Francisco Bay Area is indeed tragic. Those people are right: keeping that $3 in my pocket is merely pissing in the wind of houses that start at a million dollars.

A better use for that $3 is to buy the lottery. At least there’s a infinitesimal chance!

In the grand scheme of things, buying a soda bottle here and there is not going to monetarily affect me one bit. But it’s the mindset that counts here. We can all agree that spending money is easy. The American credit system is fantastic in that regard. Therefore I think we have to train our resistance muscles (not to be confused with resisting a certain presidency). The calculus has to be more than: can I afford it, if yes, then buy!

Saying no to the $4 coffee helps me say no to a new iPad Air I’ve been eyeing, or a newer laptop to replace this “aging” M1 MacBook Pro. Those are the money decisions that really slice chunks: the hundreds and thousands of dollars at a time. Money that can otherwise grow significantly if put to proper investing.

If I really want to drink soda, I’d go buy in bulk from Costco.

How much for Mario Kart!?

As a person who don't understand gaming on portable devices, I can at least be happy for my friends who are excited about the incoming Nintendo Switch 2. The Japanese company continues to prove that customers don't care about specifications so long as you build something absolutely fun. Leaving Sony and Microsoft to battle the spec wars remains a brilliant strategy.

What caught my eye during the Switch 2 announcement is the pricing. Not of the console itself; $449 appears to me competitively priced with the Windows handheld counterparts. It's the pricing of games that's alarming. $80 for the digital version of Mario Kart is utterly hilarious. I don't care that if you adjust for inflation, that price is right in line. I personally do not adjust for inflation. I evaluate the cost of things as they are right now in the moment.

So I guess I am priced out of mainstream gaming. Just like I am priced out of mainstream fast food, and going out to the movie theatres. It doesn't matter that proportional to my current income it's effectively the same price. The higher number on the price list throws an illogical barrier that stops me from paying it.

Because I can remember a time when $80 is the price you pay for a special edition of a highly-anticipated AAA title. That is my price anchor, so seeing that same dollar amount for plain-Jane Mario Kart is challenging. If other game studios follows the lead of Nintendo, video gaming as whole has inflated beyond my reach.

But I am just one guy, right? There's no doubt Nintendo will continue to print money. Folks complained loudly about the $2,000 entry price for an Nvidia RTX 5090 GPU, but there's no shortage of Reddit users with that card in their flair. You really cannot underestimate the ability for American consumers to debt-spend their way out of inflation!

Money cushion

Word on the street is a five dozen carton of eggs at Costco is now a whopping $22 dollars. (Thanks, President Trump!) Those of us reliant on a high protein supply are in shambles. At the two eggs per day rate that I eat (which is kind of low, relatively), I might have to declare bankruptcy.

Elon Musk is taking a figurative chainsaw to the federal payroll. The city of San Francisco is in a massive budget hole. San Francisco State University (my employer) has declared a financial emergency. Seemingly every day another private sector company is shedding jobs. It’s not a great time, is it? We can’t be certain of our job security. And if we are unlucky to be fired, the job hunting market will surely be ultra competitive.

What helps soothe the stress in these uncertain times is to have a cash reserve. (I know, right to privilege jail. Right away!) Those of us with a proper emergency fund, one that can last us an entire year without employment, are sitting comfortable. Of course it would still suck to be out of a job, but not having to worry about covering rent for at least awhile takes away the dread. I will be fine either which way.

The dream is to stop working, right? Short of a lucky windfall, the best way to achieve that is to slowly stockpile the money. Keep it in a savings account for emergencies. Throw the rest into the market (not investment advice, do your own research) so that it can compound. I have a much better relationship with my job when I am not actively looking forward to the next paycheck to cover some debt hole I dug myself into.

Peace of mind in a capitalist system is to have capital. We work so hard in exchange for money. Mustn’t spend it all on TikTok shop!