“
i don’t want to own things anymore - I just want access to use them. the reason I don’t want to own anything is because the market has become truly efficient (at least in major cities in the US) at providing me with what I want when I want it with almost zero friction, without needing to own it. Ownership has costs that now outweigh its value:
a. I don’t need a my own chef (or any cooking apparatus) because restaurant options abound
b. I don’t need a house because there are plenty of rentals
c. I don’t need a car because I can use zip car, rent one, hire a taxi at will
d. I wouldn’t need a jet (if i were in that market) because good convenient commercial flight options abound - not to mention that I could always efficiently rent one.
— in the end cash is King/opportunity costs are much higher than they once were.
”Sam Lessin: Blips before my birthday
I have been thinking lately about ownership versus usage of digital goods — but not so much in terms of major physical purchases like cars and houses. Astute observation, though. With more and more home buyers dropping out of the market and car-sharing services proliferating (for example), people are clearly seeing the value in shared goods.
One comment on how well this approach may work: To ensure the same long-term benefits that come with ownership (eg, equity on a house purchase), a bunch of practical considerations are probably implied. For instance, if you hold on to your cash instead of spending it on a down payment, you have to invest it a way that will generate value equivalent to the required return on ownership down the road; you can’t spend the extra cash the way most of us spend ‘disposable’ income – on more food and entertainment.
Most people rely on home equity as a financial safety net or to cover major life expenses (eg, assisted living) in their later years. Something big needs to change there for this model to work. It will be interesting to see how many people are actually able to capitalize on the cash they free up and how investment behavior changes if and as this trend takes root.
