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No.4

The value of DIY

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The time has come to have my annual meeting with my insurance agent. I have my home owners and all of our vehicles with the same company as the savings are significant. During this meeting the request to catalog the contents of our home will undoubtedly come up. Assigning a value to these contents for the most part is fairly straight forward as most are common consumer goods. However, the topic of my DIY stereo system has been a grey area in previous conversations with my agent. I can calculate the value of the individual purchased components, but how do I value the finished product. Certainly, time and skill need to be calculated in the total value of these items. Unfortunately, due to fact that I am a hoarder of my own creations I have never sold any of my DIY items. One suggestion my agent had was to have someone appraise the value of these items. I would assume that someone involved in similar cottage industry with a history of sales would suffice, but I don’t know for sure.

Have any of you ever encountered this situation? I would think heavily modified components would also fall into this category to some extent as well.

 

Let me know your thoughts.

 

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This is a sticky wicket for sure. If you get an appraiser make sure YOUR labor costs are factored in somehow. In my situation the contents of the home are insured at 1/2 or 3/4 of the homes value, I can't remember which. In either case there is NO WAY the contents of my home are worth any where near that amount. And my HT and 2 channel rig are not jewelry or furs so I assume therefore they would be covered. Maybe that's a bad assumption and I should talk to my agent also.

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Tough subject !!! 

 

I think it is impossible to find a good appraiser for DIY gear.  When a person sells such items, its a total crap shoot as to what you will get. 

 

Often, a DIY piece goes for about the cost of the parts, with NO recognition for performance improvements, if they exist in fact. 

 

What ever " Labor" you apply is a pure " labor of love ", since its not intended for resale.  ( It was not a labor to put food on the table, feed your family. )

 

The DIY hobby is for YOUR satisfaction, not for others.  Your DIYed gear was improved to make YOU happy on YOUR specific audio system.   It may not apply at all, to other audiophiles' systems.  Usually, it doesn't IME !!!

 

The most conservative insurance valuation,  will be that of parts-replacement-value, IMHO.  

 

Jeffrey Medwin

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I think that we all value the fruits of our labor higher than others value them, because we know what went into them, why they were done the way that they were (based on our own requirements lists and their relative precedence) and how much effort it took. It takes people with good ears to hear what we've done in our sound systems.  Most people don't have those, I've found.

 

Another problem that I see is the "brand" factor--i.e., most people today don't value performance and quality of construction of DIY like we do.  In fact, I see a lot of "Beranek's Law" in DIY that usually propels me in the opposite direction.  It takes not only good workmanship and quality parts, but also good judgment--and frankly, a lot of DIY optimizes aspects of design that I don't value as highly.  The trick of brands and branding is that the question of "did I choose the right requirements/precedence of requirements?" is not typically an issue.  Another intangible issue is that many/most people don't value things unless others value them.  This is the problem of DIY.  If you're Nelson Pass or Troels Gravesen, DIY for them is like brand name stuff for others that see and value their stuff--because they think that others value their stuff.  It's like gold or diamonds: why would most guys like that sort of thing, other than the fact that others would pay money for them?  If the price of gold or diamonds were like the price of painted molded plastic or cubic zirconia, no one would pay much attention.

 

So it goes for DIY.  It's like off-brand stuff.  You have to realize that most people are paying many times what the cost to the builder was to get their stuff (Klipsch included).  That's how they stay in business.  Stocks and bonds are also like this. You have to adjust by multiples of the sum-total product cost if you don't have a well-valued brand attached. 

 

Swimming pools with houses are a notoriously very poor investment, while building extra bathrooms in the house will usually net you a much higher return on investment (albeit, less than you probably paid for the parts and perhaps labor).  Life is like this.  I've learned to not get too excited when people that might buy something make extremely poor decisions from a point of view of what it would cost me to replicate the brand name stuff...I just adjust for people's poor judgment.  Insurance companies cater to those type of people (collectively). As an engineer, to me this isn't terribly logical or consistent behavior, but it's certainly generally accepted behavior. 

 

I just think of the movie And Justice for All, and smile.

 

Chris

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I'd see if I could find similar units sold on e-bay/audiogon/us audiomart, etc to get close to a market value.

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6 minutes ago, CECAA850 said:

I'd see if I could find similar units sold on e-bay/audiogon/us audiomart, etc to get close to a market value.

 

Not enough DIYed examples exist,  on resale markets............ to make such a logical decision. 

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Easy, post pics of what you have and we will offer values, take an average, multiply by 2 and there you go.😀 

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2 hours ago, No.4 said:

The time has come to have my annual meeting with my insurance agent. I have my home owners and all of our vehicles with the same company as the savings are significant. During this meeting the request to catalog the contents of our home will undoubtedly come up. Assigning a value to these contents for the most part is fairly straight forward as most are common consumer goods. However, the topic of my DIY stereo system has been a grey area in previous conversations with my agent. I can calculate the value of the individual purchased components, but how do I value the finished product. Certainly, time and skill need to be calculated in the total value of these items. Unfortunately, due to fact that I am a hoarder of my own creations I have never sold any of my DIY items. One suggestion my agent had was to have someone appraise the value of these items. I would assume that someone involved in similar cottage industry with a history of sales would suffice, but I don’t know for sure.

Have any of you ever encountered this situation? I would think heavily modified components would also fall into this category to some extent as well.

 

Let me know your thoughts.

 

 

Am I missing something when I look at your original post?

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16 minutes ago, Khornukopia said:

 

Am I missing something when I look at your original post?

@Khornukopia I don’t think so?

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It's showing white on white for me as well. I've highlighted the text and screencapped it for illustration purposes.

 

image.thumb.png.5b1f1fc5fbea6176135688d78ca5a06c.png

 

image.thumb.png.7430e2dcd6ba086e4a83151279dc1eed.png

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14 minutes ago, Thaddeus Smith said:

It's showing white on white for me as well. I've highlighted the text and screencapped it for illustration purposes.

 

The old invisible text technique developed by a secret spy agency. 

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2 minutes ago, No.4 said:

Better?

 

I can read it now. On my display, it now shows as white text in black highlight bars.

 

As for you insurance question, the company will cover just about anything you are willing to pay them to insure, it then becomes a matter of what that cost is worth to you.

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If a homeowner builds his own home is it worth less than the neighbors similar house of similar size ?

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19 minutes ago, jason str said:

If a homeowner builds his own home is it worth less than the neighbors similar house of similar size ?

 

Depends on the neighbor... 🙄

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Just now, Marvel said:

 

Depends on the neighbor... 🙄

And depends on the homeowner.  Materials, trim, construction technique............

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25 minutes ago, jason str said:

If a homeowner builds his own home is it worth less than the neighbors similar house of similar size ?

Not to the taxman.....ask me how I know:ph34r:

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I would insure it for a little more than it would cost me to replace it with more DIY.  IMO, expecting to recover your time is naive.  For me it’s a hobby, not an income stream.

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58 minutes ago, DizRotus said:

I would insure it for a little more than it would cost me to replace it with more DIY.  IMO, expecting to recover your time is naive.  For me it’s a hobby, not an income stream.

Many hobbies result in finished projects that have more value than the sum of the components involved. Skilled execution has value, especially because not everyone possesses said skills. 

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