Do the Research (11/365)

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A friend of mine told me that for every $100 he spends on buying an item, he devotes an hour of research to the purchase before making a move.

That seems like a good rule of thumb. In fact, I’d go even further: for every $100 I spend on an item over the item’s lifetime, I try to devote an hour to researching the purchase before making a move.

What do I mean by that? Take a car, for example. Yes, we have the initial sticker price of the car, but how long do you intend to drive that car? How much gas will that take? How much maintenance will be needed to keep it on the road? Those are additional costs, and they should be an important part of the research you do.

If I buy a new computer, I might spend $500 on it (hypothetically). However, it’s going to suck energy right out of the wall and inflate my electric bill, so my total cost of owning that computer is significantly higher than $500 over the lifetime of that computer.

Research pays off. Almost always, research will lead you to the option that will provide you with the most bang for your buck. Whether it’s the most fuel-efficient and reliable car or the computer with the most horsepower for your dollar, time spent learning exactly what you’re buying and how to milk all the value you can out of that purchase pays for itself over the lifetime of the item.

Do the Research (11/365)

What exactly do I mean by “do the research”? Here’s the process I go through for almost every significant item I buy.

What exactly am I buying? For starters, I don’t buy something unless I can clearly state what exactly I want it to do. What tasks must that item be able to take on to make it worth one’s money and time?

Let’s say I’m looking for a new kitchen knife. What do I care about with that knife? I want it to be able to chop vegetables easily. I want it to hold an edge for a while after I hone it. I want it to be able to maintain a sharp edge (with regular maintenance, of course) for a very long time, because I don’t want to have to go through the process of buying another one because the first one was junk.

This, in itself, involves research. To understand what features you want in a knife, you need to have a basic understanding of how a knife works, what knives are made of, and so forth. Reading and personal experience are both part of this. This is deeply connected to the idea that one should buy a low-end item first, become familiar with its use, and then replace it with an item appropriate to their needs. In other words, start with a cheap knife, learn how to use it, learn what you actually don’t like about it and could be improved, then use that as a basis to buy the right knife for you (assuming you use it enough, of course).

What items out there match the features I’m looking for? Once you know clearly what you’re looking for, you can start looking for items that match it.

I usually rely on several different sources for these types of answers. A few key magazines, such as Consumer Reports and Cook’s Illustrated, provide solid and unbiased reviews of products that I often use as a baseline for what I want to buy. Another key element of this type of research is my own social network, as I’ll send out emails or Facebook requests asking for their recommendations or suggestions. There are a small handful of bloggers that I trust as well. I also use the raw data provided by the manufacturer to figure out things like energy use.

Usually, this means a trip to the library and, often, a trip to a few stores, simply to understand the products I’m comparing and the features that they offer.

Where can I find the item(s) I want at the right price? I generally prefer to buy things when my back isn’t against the wall so that I have time to evaluate lots of different buying options. For example, after shopping for months for the right price on the right vehicle, I actually bought my car off of Craigslist.

The moral of the story? Don’t be afraid to hunt far and wide for the right price on the item that you want. Don’t wait until you have to make a purchase. Instead, start the process now on items that you know you’ll have to purchase down the road.

Research pays off, every single time. You’ll know it when you find the perfect price on an item that you know has the right balance of features for your needs.

This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere. Images courtesy of Brittany Lynne Photography, the proprietor of which is my “photography intern” for this project.

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28 thoughts on “Do the Research (11/365)

  1. Time is money. And while I think that that research is important, that’s just frankly *ridiculous*

    80 hours of research if you buy a car for $8,000 – and that’s not even counting the rest of your nonsensical ‘research for how much you’ll put time in after’

    When I bought a new dishwasher, I spent a couple of hours researching it and what I wanted. That was more than fine. Research pays off. Research to this kind of paralyzing exent is ridiculous. This is just an incredibly dumb idea.

  2. Haha, I agree with the other commenters on this post…the rule of thumb on time spent researching really needs to be on a logarithmic scale! Also, regarding on-going costs such as electricity, many of those costs will apply fairly equally no matter which item (i.e. computer) you choose. Also, the present value of costs way down the line aren’t worth nearly as much of your time upfront.

    I definitely agree to research purchases, however. I always research anything where I have a significant choice of brands, features, cost, etc. For example I’ll spend a lot of time researching which e-reader to buy (or even which $20 case to buy for it!) but I won’t spend any time researching which type of paper towels to buy even if I’m going to buy a whole lot of them.

  3. I just bought a new subaru for what I believe to be a very good deal. Got a great price (according to consumer reports), a great interest rate (.9%), and researched the heck out of options that I wanted.

    I maybe spent 8 hours on it. Your assumption is that the more time you spend on something the better you will research it, but this is a serious situation of diminishing returns.

    There’s no way you learn as much the 2nd 4 hours as you do the 1st 4 hours.

    An hour per hundred bucks? I would’ve spent over a week straight of my life without sleep or rest researching this one purchase.

    That’s maybe the most unrealistic rule I’ve ever read on this site.

  4. Now, put this next to the article where he called me out for spending time to make more money by choosing my own investments. :)

  5. I tend to do a lot of research before a purchase too including what was probably thousands of hours before purchasing my home. I mean, I didn’t keep track but I saved money for 9 years in preparation and read most everything that I could in that time frame so thousands of hours doesn’t seem too far out of line.

    However this..

    “This is deeply connected to the idea that one should buy a low-end item first, become familiar with its use, and then replace it with an item appropriate to their needs”

    is a DEEPLY dumb line.

  6. There are some things where it makes sense to buy an entry-level item and then upgrade when you have the experience to buy the great item and know what you want. But there are a LOT of things that’s a really bad idea for.

  7. Just to clarify, the idea itself isn’t necessarily dumb, it’s the use of the DEEPLY in the sentence that grates on me.

  8. Well, I don’t know about the ‘hour research per $100′ scale, but I will say that I agree with the idea of researching what I buy, especially if I’m unfamiliar with the item.

    For example, back when VCRs were new, I went looking to buy one. There wasn’t the plethora of info available online like there is now, so I went to 6-7 stores that sold them and asked questions about different features. I paid attention to both what they said and how I was treated. Some of the salesmen brushed me off as beneath their dignity (we don’t want to explain anything, just buy from us!), others were very informative. In the end, I bought from the guy that was both helpful and informative, after I fended off his co-worker, who tried to steal the sale.

    Research before the buy is a good thing. Assigning it a specific study hall time, is not as important as understanding what you’re getting and why.

  9. #15 Priswell – Of course one needs to do research, but as #8 Nick points out, beyond a certain point it’s a case of diminishing returns. And even if you decide to buy a car or a house or whatever but don’t make the purchase until years later, that doesn’t mean you’ve put in thousands of hours with research. To me, research is examining options and reviews to figure out which option is best for you. After that, shopping around to get the best deal isn’t research, it’s shopping.

  10. @Mister E, “deeply” is Trent’s favorite word, I think. My wife and I sometimes drop words like “deeply”, “strongly”, or (my favorite) “tremendous” into conversations about money or cooking in a particular tone of voice, just to make the other laugh because they’re so recognizably Trent. I’ve gotten a lot out of this blog over the years (we’ve even started playing board games some evenings!), but you really need to gloss over some of the quirks in Trent’s writing style.

  11. I think it really depends on the item in question, perhaps more than the price.

    For example, I just replaced my bread machine after my 15-year old machine stopped working. I spent $120, but only invested about 15 minutes from start to finish – did it fulfill the basic functions, including a timer I could set before bed, were the reviews on Amazon/Walmart mostly positive, and was the price in my budget? Done. Showed up on my doorstep a couple days later, delivered from Amazon.

    On the other hand, I spent probably an hour researching e-readers before deciding on the color Nook. I didn’t know much about them, and really wanted to avoid buyer’s remorse. Paid $249, but still only invested 60 minutes and that included price comparisons on ebay and such, just in case I could get a better deal than MSRP.

    No matter what, I cannot imagine spending 5 hours researching a $500 laptop, nor 100 hours researching a $10,000 automobile.

  12. Dear cv, #17. You’ve got a point with “deeply’. I sumbit “simply” in competition. I don’t want to hear “Simply put” here again, unlees the author is paid by the word, in which case the use of all these useless space filler words is understandable. Folks, don’t write / say, “Honestly, I….”. Just BE HONEST! Don’t say “Simply put…” just put it simply. Clarity! Brevity! Succinctness!
    I’m with valleycat and #1-#4, the author has too much time on his hands!

  13. “@Mister E, “deeply” is Trent’s favorite word, I think. My wife and I sometimes drop words like “deeply”, “strongly”, or (my favorite) “tremendous” into conversations about money or cooking in a particular tone of voice, just to make the other laugh because they’re so recognizably Trent.”

    Wow. That’s actually pretty sad.

  14. While I’m sure this kind of research is what the author is comfortable with I have to agree – seems like excessive time spent on research for the bigger ticket items. But that’s me.

    Gut feeling can go a long way, and I’m the the kind of person who enjoys serendipitous synchronicities – but I have less responsibilities than the author does, so I’m not going to judge.

  15. I agree that you should do research before purchasing expensive things, but there has to be a cap of how much research you do. Time is money so spending two weeks worth of work into buying something essentially made it more expensive. I rely more on word of mouth feedback and recommendations from others.

  16. Priswell, no one is disagreeing with the idea of researching before you buy. They’re disagreeing with the rule-of-thumb Trent put forth in this article, which is maybe the dumbest advice that’s been offered here outside of things that are straight-up factually wrong (like the recent standard-deduction article).

  17. Simply put :), I think that Trent did not think the $100 advice through before writing this post ……
    …… this is another case of a potentially good but poorly delivered idea that generated tons of amusing comments!

  18. I do more research when buying a cheap used vehicle than a new vehicle. The new vehicle comes with a warranty and corporate reputation, both of which are easily researched. The used vehicle comes with a unique history along with a consumer reputation, unearthing an automobile’s past and reliability over time takes considerably more time and effort.

  19. I have to agree with the sentiments of most of the writers regarding the obvious need to limit the amount of research on high cost items due to diminishing returns. However, I can’t say I agree with the tone of voice used in some of the comments. I can’t imagine Trent meant to extend this 1 hour/$100 dollar rule to everything and every circumstance. Even if he did it would be better than some things I’ve seen done by otherwise rational people. I know folks who while driving a perfectly good car past a dealership, pulled in and one hour later drove away in a new car that they later truly regretted. These same people will spend countless hours agonizing over the purchase of a shirt. I just spent some 50 hours researching the purchase of a new car. I now know what I want and actually need. I will wait until the model year change next fall and buy the car discounted with the full warranty. All “Trentian” ideas. Keep up the good work.

  20. #27 Dave: Trent leads off with this: “That seems like a good rule of thumb. In fact, I’d go even further: for every $100 I spend on an item over the item’s lifetime, I try to devote an hour to researching the purchase before making a move.

    What do I mean by that? Take a car, for example….” So, it does appear he’s extending the rule to every circumstance. A $20K car plus all the lifetime added maintenance, & fuel is going to add up to a lot of hours of research.

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