Sometimes an upfront investment makes sense. Other times, it's a sucker's bet.
Buying good, classic shoes that can be resoled might be a great investment, for example, but not if you're buying them for a teenager who's got a growth spurt or two left in him.
Likewise, spending big on tools is wise if you use them to save on home improvements. If they just decorate your garage walls . . . not so much.
So how do you know when it's wise to spend now in order to save later? I tapped the expertise of the Your Money message board to find eight common "investments" that may or may not benefit you:
Retail membership clubsYou pay an annual fee, usually ranging from $25 to $50, to get discounts on your purchases. These usually seem like a great deal, but you have to take a close look at the details, your shopping patterns and your alternatives.
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The Barnes & Noble membership card, for example, gives you an array of discounts for a $25 annual fee: a 40% price break on hardcover best-sellers, 20% off adult hardcovers and 10% off "almost everything else."But B&N routinely discounts hardcover best-sellers by at least 30% anyway, even for nonmembers, and you usually can get other books for at least 10% off the cover price by ordering from other online retailers, such as Amazon.com.
You can get even bigger discounts by:
- Buying used copies through Amazon, Half.com or other used-book outlets.
- Haunting yard sales or "friends of the library" book sales.
- Patronizing your local library. Many systems allow you to reserve books online to be delivered to your local branch, for free.
Another idea for big readers: services such as Booksfree.com, which works like Netflix for books. Poster "Lin in PA" pays $21.99 a month and can have six paperbacks from the service at a time. Each time she mails one back, she gets another from her reading list within a few days.
"My local library does not carry the books that I like to read," Lin in PA wrote. "I am an avid reader, and can read 3 or 4 books a week if I am interested in them. . . . I love it, and since the $21.99 is all that I spend, I don't feel too guilty about it."If you're on the fence about a membership card that offers a discount, divide the cost by the minimum price break you can expect. In Barnes & Noble's case, that's 10%, making the break-even point $250 ($25 divided by 0.10). You'll need to spend at least that much at the retailer annually for the card to pay for itself.
If you buy enough, though, a card can pay for itself in a single visit. Poster "alsmez" is an opera singer who buys theatrical makeup from Make-up Art Cosmetics, which offers a professional-discount card for $35 that knocks 30% off the purchase price. If you do the math, $35 divided by 0.30 is about $117. Since "alsmez" often buys $200 of makeup at a time, the discount card is worthwhile for her.
Extended warrantiesThe Your Money crowd is usually thumbs down on forking over extra money to protect a purchase longer (we echo Consumer Reports in that regard).
One of the exceptions is warranties on laptops. Manufacturers have trimmed their warranties back so far -- they're typically measured in days now, rather than months or years -- that the extended free tech support alone is usually worth the extra cost; the damage that laptops often incur in their travels make the extra protection a slam-dunk.
Poster "missliliane" was among those who said her extended warranty had paid off.
"I've almost always made my money back in batteries alone, and I've had at least one repair on every laptop I've owned," she wrote. "Two of the laptops completely died before the service plans were up, so I got to go to the store and pick out a new one."
Poster "GCG1RL" also gets a warranty when she rents tools from Home Depot, which adds about 10% to the cost of the rental, although you wonder how much longer the home improvement chain is going to let her use its merchandise.
"So far I have destroyed three chain saws, broken part of a rototiller and returned a sod roller in less than pristine condition, and it has not cost me a cent to deal with these issues," GCG1RL wrote. "They just take it back and hand you a new one. It is really worth it. "