From this post, I'm not sure if you have underpriced dining rooms are exceedingly cheap, or if you are unaware how much a rental place actually costs. My parents have a rather nice dining room that they host every major holiday in and they still spent more than 10k in the last ~2 years alone for family gatherings they did away from home.
Edit: Reading through the thread I've come away with the feeling most people are just talking past each other with no frame of reference for how the other lives. There are people it seems coming from cultures centered on weekly/monthly gatherings that are bewildered that someone would consider a dining room superflous.
This is because people look at the utility of the room when it is used, but forget to multiply that by the frequency of its use.
And yes, sometimes a dining room can surprisingly come in handy for something that comes up. However, this is true of almost any use you can think of for the room. I would venture to say that most people who have dining rooms, who don't routinely host dinners, would be better served making it a video game room, or an aquarium, or a giant closet, or a room for whatever hobby they actually do. Yet across America, millions of dining rooms sit empty for months at a spread, screaming to be made into something that more accurately reflects the lifestyles of their owners.
Every day, my money sits in my bank account screaming to be spent on something intangible...
I know a group, where 8 people + a dungeon master meet weekly/bi-weekly to play DnD. It's a little on the larger side but this would be "dinner" party size. Of course they bring food and drinks as well. It would be a little ridiculous (and expensive) for them to rent a grand ballroom every weekend.
Similarly there are plenty of people I know who look forward to college football and hold similarly sized game days with themselves and significant others. Again nothing special, just 6-12 people ultimately watching tv. Food is brought, and drinks are had, but they aren't having a "rager". Renting a park every weekend to watch college football every weekend would be expensive.
The fact that you would think to rent a park for these kind of things just leads me to believe we are talking past each other. We are missing significant cultural context on the utilities of these rooms. If you don't watch sports or don't play DnD I can see how the idea of needing a dining room is superfluous.
And most people would't throw away their friend groups in order to invest $10k on the S&P. At that point, why even have the money?
I do have a couple rooms that can accommodate 8 or so people each and I use them when I have guests. Also outdoor space in the summer. But I use those spaces for other things as well.
I have s living room with kitchen which is 24 square meters, definitely not big, contains the kitchen, sofas, tables and I hosted 10 people in it.
The (bi)weekly social engagement that is an important part of their social life is not an edge case though.
Not really, because your principal loses value because of inflation.
If you buy that $10k CD, you get $500 out per year; you pay a couple hundred bucks of that in taxes, leaving $300. If inflation sticks around 3.2%, you'll be losing $20/year before you spend anything.
But it's beside the point. The point is that opportunity costs must be accounted for.
So yeah opportunity costs must be accounted for, but in your scenario the opportunity cost is negligible. We're talking 0.4% per year. Investing in a CD is like pissing in the ocean
You still generally owe taxes as the interest is accrued. So, the situation doesn't change-- that CD loses money unless your tax rate is low.
Even with compounded interest not subject to taxation until withdrawal, it's not much better. Even in a ridiculous case with 30 years, 10000 * (1.05^30) = $43220 ; minus .4 * 33220 = $29932; 29932 / (1.032^30) = $11401-- or about .4% real return per year.
Opportunity costs beyond inflation make the picture even more ridiculous.
Not surprising that a lower tax rate gets to the same number sooner through compounding.
BUt the bigger issue is that you have to pay tax on interest as it is accrued, not all at the end. So in your case there's a 3.35% return vs. 3.2% inflation or a .15% net return.
At least in areas where space matters...
Most people? I haven’t hosted any party in years.
Notably I am not imagining large parties (the 300 people you mention). I just haven't had more than 1 person over to my place at a time in over a year.
> Would you rent a space to host 8 people every week just to play DnD?
No but in such a situation only 1/8th of the people involved need to have a living room.
We host a few people, often using our dining room, at least once a week and often more. Sometimes two people sometimes twenty. Sometimes dinner, tea, craft night, board games, dungeons and dragons, birthday parties, whiskey tastings, family visits.
We aren't exceptional in this among our friend group - everyone shares the fun and stress of hosting.
I'm not in some exotic culture either, just a medium sized city in the southeast US.
You got me there, I'm not a sociologist and I can only draw from experience. I come from an immigrant family in New England and one my of my best friends is an immigrant from Europe which places high priority on the eating together thing. That said you could be right as more and more relationships move online.
>No but in such a situation only 1/8th of the people involved need to have a living room.
In a perfect economy with 100% efficient utilization there will never be any waste or duplication of resources. We don't have a perfect economy.
I guess I am just thinking about it from an urbanist point of view, and how our view of personal space and a relative lack of focus on publicly accessible community spaces affects our land use and exacerbates the housing crisis. I say this as someone in a family which has been in this country for generations, and probably focused too much on personal wealth and access to large homes. I am learning to appreciate the value of smaller private spaces and bigger public spaces as I have slowly moved from the country to a dense city throughout my life. I go to weekly gatherings with friends, but that's at the local hackerspace not at anyone's house.
I can see how from an immigrant background there is more focus on familial togetherness and I think that is a good cultural trait for us to encourage and support in city design. Though as a queer person my family is not who I want to spend time with on a weekly basis.
No offering your spare bedroom when someone drinks too much, no communal potlucks, no gatherings when businesses are closed...
Where you invest your resources speaks volumes about your priorities in life.
And I don’t have a spare bedroom. Also most of my friend group doesn’t drink.
Owning things means you get to be your own master. That is worth different things to different people.
I know couples without kids who only rent cars but that number goes way down for people who have kids.
Tell that to fixed income folks who are priced out of the houses they own due to property tax increases.
Can't really think of anything else I own that has anything equivalent to a property tax.
But anyways you're missing the point. For instance my house had a 'dining room' when I bought it, but I made it into something that I use every day (music studio/band practice room).
The conventional part of me would have just kept it a dining room, and used it maybe once or twice.
$10k would get you about $500 a year long term (5%).
$500 a year doesn't go far, and that assumes you don't use the dining room for any other purpose than a couple of parties a year.
Take the dining room example. A quick search says it costs ~$20,000 to build a dining room, so let's say a house with one costs $10,000 more than a house without. So by foregoing a dining room, one now has an extra 10k that they can spend however they want.
But that DOESN'T mean that they can't spend it on throwing parties! I'm pretty sure that even spread over many years, 10k dollars can produce a lot of fun times.