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Relative Value

December 5, 2006

scales.gif  “Make vs buy”.     That’s the phrase that a good friend of mine uses to sum up a lot of decisions.  Do it yourself, or pay someone else to do it for you.   So, which is it?   Obviously it depends on a lot of variables in the equation.   Basic economics – can you do it cheaper in absolute dollars yourself?   Can you afford someone else to do it for you?  If so, what are the opportunity costs?  Will the quality be as good?   Will it be done your way?  While investing your time in the project, what other things are you not doing, including spending time with family?  You have to subtract those out as a loss.   Sometimes the decision is affected by whether your emotionally invested in having the experience of doing something yourself.   Perhaps your ego is involved – is it something you think your good at?   What will you learn by doing it that will create new opportunities?

Last night, I had a conversation with someone who was disillusioned.   He was made painfully aware that someone with a lot of money can have instant gratification.  Anything you can work hard to have, a rich person can have a bigger and better one, right away.   He felt defeated.   My rationalization was the person who struggles to earn or build something on their own is changed by the experience and something intangible accrues for them, that does not for the person who just comes along and buys it.   They may own the thing, but they will never really have the achievement of it.

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