A person who takes a contrary position or attitude
Contrarian is a term that is usually applied towards investing. That is, you buy when others are selling and sell when others are buying. You buck the trend by going against the popular market sentiment.
Warren Buffett became the third richest man on this planet by following this strategy. In this age when we are sending rovers to other planets and setting up a permanent base in space, Warren Buffett is currently obsessed with Railroads!
No this is not a cynical post about Buffett or even investing. This is about using the same philosophy in our everyday life. Does it pay to be a contrarian in everyday life?
My phone isn’t very smart.
I work in an industry where almost everyone carries a smartphone. Very useful in those long boring meetings when you can tune out life around you and check Facebook. I have a brick. It does not support data, but it does have my favorite game – Snake! But I can’t really play that game because there is no way to turn off that annoying beep each time I press a key. My phone isn’t very smart.
I’m forced to focus, no matter how long the meeting is. I can neither check nor update Facebook. But then I realized, I don’t have a Facebook account! Most of the time I’m connected either via my work PC or through my laptop at home. The only time I’m not connected is while driving to work, but then I reserve that time to listen to music and I wouldn’t use the phone anyway. Why do I need a smartphone?
Can I afford one? Of course! Do I have to have one? No. Instead, I use the money saved – about $2000 a year and apply it towards my mortgage as extra principal payments. My prepaid plan costs me $100 a year!
Chasing a customer away with breadsticks…
I was once offered free breadsticks along with my lunch order. I always order the same thing and don’t buy a drink but do tip and when owner of the pizzeria heard that I just had a baby and I’m on a single income, she somehow thought I was barely scrapping by! I felt very guilty eating those breadsticks.
No Honey Boo Boo for you!
When friends come over to our house, which is in a very affluent neighborhood, they gasp at our 32″ TV that has no cable! But for me, it doesn’t make sense to have cable. We don’t have time to watch TV with a hyperactive 3 year old and we don’t want him catching this habit. Neither of us are big sports fans so big screen TVs mean nothing to us. That’s a savings of about $700 a month. But it is not about the savings, it is about us. If it doesn’t make sense, cut it out. Doesn’t matter what others think. On the other hand, if they make PBS a cable-only channel, we would definitely consider cable!
I don’t pay $100 for an oil change!
No fancy car either. Definitely within our means, but again the purpose should be a genuine need, not a status symbol. The savings in gas, insurance and maintenance is a nice bonus.
As a new homeowner, I wasn’t prepared for home maintenance. When the faucet started leaking, I decided I’ll fix it myself rather than hire a plumber. This time it wasn’t about the money or time, but pride! I’m an engineer, I build robots in my spare time, fixing a faucet shouldn’t take more than half an hour!
Took me 2 dirty, soaking wet days.
Since I didn’t have the right tools or even know what tools to have, had to make multiple trips to Home Depot, spent hours sawing rusted pipes, learnt about the utility of vinegar in removing rust, almost locked myself in the bathroom but at the end of day 2, emerged dirty but victorious with a shiny new faucet and brand new door knobs!
The next time we have a leaking faucet, I really wouldn’t take more than half-an-hour! 2 days was the price I had to pay for this education and it was worth every penn…second!
Looking back it was a fun experience and I’m glad I didn’t call the plumber! What am I going to do with all the money I saved! Nice problem to have!
Yard work. The typical response is your time is more valuable and you should pay someone else to do this. Yes it is if I’m doing something else that pays more than the $30 or so for the yard work! Not if you are sleeping or watching TV! The way I look at it, doing yard work is a good excuse for some fresh air and exercise.
Being contrarian can prove expensive
Contrarian doesn’t always equate to saving money. Sometimes you spend more, way more than you have to. When it comes to stuff for the house, I pay a premium. The faucet I bought was almost thrice the price of a regular faucet. Faucets are notorious for springing leaks and I don’t to deal with this very often. Quality versus lower cost.
A good vacuum cleaner is hard to come by. Most for us, last at the most, a year. I bought one that is 5 times what a regular vacuum costs! Not just based on the price, but for the 7 year warranty and based on the positive reviews. Hopefully I wouldn’t have to worry about this for the next 20 years!
The same goes for other fixtures as well. LED bulbs cost as much as 30 times a regular bulb. But they last a lot longer and consumes a fraction of energy and is good for the environment.
When we decided to purchase our house, I simply sent an email to our condescending agent and said ‘We’ll take it’! We had no pre-approval, we didn’t look like we could afford the house (I’m sure my phone was the culprit here!), and ‘We’ll take it’ is no way to let an award winning million dollar club agent know that you are interested!
We weren’t insulted, we were amused! We had no doubts in our minds about financing and hence didn’t bother with a pre-approval. Paid 20% cash to avoid PMI and bought the house.
We are no different than others, we just have a contrarian view of life. And being contrarian can save you money. Who knew!