On Thu, Sep 8, 2011 at 12:19 PM, Kragen Javier Sitaker <kra...@canonical.org> wrote: > > > To compete with a 3% ROI from other possible investments of your capital, a > US$239 investment needs to earn or save you US$7 per year, even assuming that
People make consumption decisions to maximize utility, not a hypothetical ROI, which should really only be used for financial investments, not consumption spending. Since utility functions vary widely between people, wearing flips-flops would be the optimal decision for you only if the utility you derive from walking around in $200 shoes (even when flip-flops may be applicable) is less than the utility you get from the money saved buying $0.75 flip-flops. > it *never* wears out or depreciates. You can probably find investments with a > 3% ROI in almost any economic times and at almost any scale. Any number of hedge fund managers would beg to differ, I'm sure! Venkat Inumella
