Optimal Finance Daily - Financial Independence and Money Advice

3032: When Renting is Smarter Than Buying by Sierra Black with Get Rich Slowly

Feb 7, 2025

Sierra Black, a financial writer for Get Rich Slowly, dives into the nuanced debate of renting versus buying. She argues that renting can often be the smarter financial option, especially for items that depreciate quickly. By considering costs, resale value, and how often you’ll use something, you can maximize value and minimize waste. Black emphasizes that many purchases lose value immediately after leaving the store, prompting listeners to rethink their buying habits, especially for infrequently used items.

11:10

Episode guests

Sierra Black

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Episode notes

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Quick takeaways

Renting can offer better financial value compared to buying, especially for items that depreciate quickly or have infrequent use.

Deciding whether to rent or buy depends on factors like cost, usage frequency, and personal preferences regarding ownership and convenience.

Deep dives

The Value of Renting vs. Buying

Renting or subscribing for access to items can often provide better value than outright purchasing. The discussion emphasizes that many products depreciate in value once acquired, presenting a compelling case for renting, especially for items with limited use or high turnover. Renting high-end designer goods or specialized tools, for instance, can save significant costs compared to purchasing, which may lead to wasted money on items rarely used. This perspective aligns with the rise of a community known as 'transumers,' who prefer to rent rather than own, promoting a lifestyle focused on flexibility and minimizing ownership.

The Economics of Renting vs. Buying: A Modern Perspective

6min

Navigating the Rent vs. Buy Debate

5min

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Episode 3032:

Sierra Black explores how renting can often be the smarter financial choice, especially for items that depreciate quickly or have limited use. By weighing costs, resale value, and usage frequency, you can make informed decisions that maximize value and minimize waste.

Read along with the original article(s) here: https://www.getrichslowly.org/when-renting-is-smarter-than-buying/

Quotes to ponder:

"Most products aren't investments. They lose value the moment you take them home from the shop, and continue to depreciate the longer you own them and the more you use them."

"Anytime you're buying something you have a limited use for, you might want to pause and consider renting instead."

"The key is to answer the questions mentioned and figure out if it will cost you more to rent or buy the thing you want."

Episode references:

Chegg (textbook rentals): https://www.chegg.com

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