Economics of high end gear

[PHC1]

I'm sure most of us don't need a reminder how expensive this hobby can get but perhaps it would be an interesting thread if we focus on it and analyze our habits and approaches to building a system.

I was reflecting back over the 30 years I've been into high end audio and what I would have done differently today if I was to start from scratch... Well, I kind of am again. So here goes.

I actually got the inspiration to post this after reading some Luxman reviews online. Luxman has been around since 1925 and throughout history they have a tendency of bringing out new products and refreshing the line every 8-10 years or so. (Perhaps some changes such as USB inputs became a necessity and triggered a shorter span update)

All too often the road to building a great system is fraught with baby steps and many upgrades along the way. No doubt this is Psychological. We tend to need time to overcome the sticker shock, the inner battle of paying for gear sometimes more than a nice car or even a condo or more.... audio gear is many financial sacrifices for most of us. We work our way towards that dream build, breaking ourselves down and beating down that inner voice that says "NO" "Control yourself!" Finding justification for owning expensive gear and finally succumbing to the desire just like any other purchase of an object of "desire".

While the justification of starting out small and "working your way up" may seem like the financially responsible thing to do, I think it is quite the opposite.

Let's break this down. Typical scenario for most of us is that we know what we covet. We have done our research, we have visited high end audio boutiques, we have heard the ultimate for our ears within a lofty but still not insane all things considered level.

I want amplifier XYZ which costs $15,000. We will assume retail prices and the typical 50% recovery if you are lucky, often it is less.

So, the $15k amp is out of reach for now. Let's work our way up to it.

I will settle for ABC that costs $4k for now. Exactly one year later but let's say 2 years for the sake of argument, I will sell ABC at a loss and recover 50%. Armed with $2k we now buy amplifier DEF for $6k by adding another $4k we have saved up over the 2 years for the next purchase. Now we own amplifier DEF and we have spent $8k total.

Another 2 years down the road we sell the DEF and recover $3k. Armed with the $3k we buy GHI for $10k. Still coveting the XYZ at $15k, we finally convince ourselves that the GHI needs to be sold and the dream amp finally becomes a reality. We sell the GHI, recover the $5k and by throwing another $10k on top which seemed like an insane purchase 6 years before, we finally buy the XYZ...

So the road to XYZ at $15k has cost us $25k and the whole time we were thinking of XYZ instead of being truly happy and content with our dream purchase of the said XYZ.

Now, had we bought the XYZ at $15k, having sold it 10 years down the road as something else is finally truly worthy of an upgrade and recovering 40%, it would have cost us $9k. $9k divided by 10 years or 3650 days is $2.46 a day.

I think it is pretty clear that taking baby steps to your goal is simply the worst economical way to achieve that goal.

So.. what would I do differently or suggest to someone just starting out. Get as much exposure to high end gear as possible, get to know the brands, listen to them, know what you want. Set a lofty but not unachievable goal. Either save up without blowing your money on lesser gear or take out a loan or simply write that insane check but LOVE, RESPECT and ENJOY your gear for a very long time without having to upgrade and YOU WILL SAVE MONEY.


Thoughts? Comments?

[AudioGremlin]

Our family accountant who is also an audio enthusiast said for me to happily justify the cost is to estimate its life in the system and divide the cost into days of enjoyment. Yes I would pay the daily cost without reservation. Thats how he justifys his system as well.

[1KW]

Its not just about the equipment but rather the ride to getting there.... We hunt for the equipment we think we want (not many hi end stores around me) and may end up with a compromise or two along the way which may reinforce your initial purchase impulse or you may go in another direction. I understand what your saying about the additional cost of taking interim steps however it is part of the fun of getting there and keeps the interest fresh. For me I got off the upgrade merry go round and now enjoy hunting for vinyl I don't have.

[JemHadar]

Once upon a time I added all my audio gear invoices in an Excel sheet...chills, worthy of "The Exorcist" guaranteed.

Even my most recent purchases are hard to justify rationally. When I told my better half the cost of my latest DAC an awkward silence descended and the skies turned dark. A total eclipse of the Bank Balance. Her eyes beaming "Thou shalt never speak of this again"...I'm not a religious person...but that moment was as close to biblical as I will get.

But when the Music plays all is forgotten. The smiles a minute, the re-discovery of long forgotten gems, those moments of musical bliss and pure joy, exploring new worlds...can you really put a price on those ?

I do like to explore new stuff, but all the fads, hype, dogmas, myths and Brand mythos...I left those behind long ago, I really couldn't care less. IMHO the adage "If I knew then what I know now I would have done things differently" qualifies as self-deception. It is part of the journey to learn, sometimes the hard way, sometimes the nice way (kudos to AA for that one).

As with so many things in life...all events thus far have led me to the place I am now enjoying Music...and it is a good place to be.

[W9TR]

Good post Serge. If only we knew what we wanted at the beginning of our journey, we could save a lot of money along the way. But we learn as we go.

I like to look at total cost of ownership, so I try to buy gear that holds its value over time. McIntosh amplifiers and preamps are a great example. Their cost of ownership can be extremely low, and if you buy used you can see some appreciation over time.

The poster child of high depreciation seems to be home theater preamp processors. Their value plummets as new models are introduced to handle new audio and video formats. Ouch!

Tom

[The Sandman]

At the high end (of audio, and most other such endeavors in life), the economic calculus used is for rationalizing to others the amount we spend or the choices we make. The thing I care about most is avoiding regrets regardless of level of investment.

[GeAllan70]

"If only we knew what we wanted at the beginning of our journey, we could save a lot of money along the way. But we learn as we go." - W9TR -

"We live in a world of Things, and our only connection with them is that we know how to manipulate them or to consume them." - Enrich Fromm -

[bodiezaffa]

Originally Posted by AudioGremlin

Our family accountant who is also an audio enthusiast said for me to happily justify the cost is to estimate its life in the system and divide the cost into days of enjoyment. Yes I would pay the daily cost without reservation. Thats how he justifys his system as well.

+1

[chessman]

There is a lot of wisdom in this thread. The problem for me is that I think each of you makes a good point. To Serge’s point, I try not to settle for an inferior choice if I know what I really want. To Jem666’s point, I agree that regret for past choices is self-deception. I wouldn’t be me if I had been someone else in the past. To Tom’s point, since my learning has been slow, I try to buy used whenever I can. Truly high end gear lasts a long time. Today’s state of the art does not morph into junk just because a new model came out. At the end of the day I try to remember that this is a hobby - I want, but do not need, this gear. Then I try to balance that want against my responsibilities, peppered with a dash of you only live once.

[For The Love of Music]

There’s no doubt in what Serge says, you will lose in most cases following a trade up practice.

Magazines, shows and forums seem to fuel the fire inside us, then for some of us, what is the optimum system?

For me, I thought it was McIntosh and Focal, still a very worthy combination, then I shifted when I seen and heard my current setup.

Buy smartly, without pressure and remember no one cares what you have assembled but you, and perhaps your Wife and she only cares from a cost standpoint, deservingly so.