I was introduced to the concept of twos by an economics professor in Edmonton who specialized in buying small businesses. His method was to have at least two in hand to compare. His strategy wasn’t just about getting the best deal.
Rather, he found that by having two legitimate contenders to evaluate, the emotion involved in buying was reduced. He also discovered that after putting two different companies through a rigorous analysis, he often chose the one that he had initially found least attractive.
I try to apply the same principle to houses, cars and other big ticket items. Even if it’s love at first sight with a house and or a condo, for instance, have at least one other property to compare it with.
The comparison exercise often teaches you a great deal about your intended purchase.
Make a detailed list of the attributes of each contender from price to square footage, needed repairs or renovations, location, distance to work and services, taxes, utility costs, and other characteristics such as natural light and potential for expansion.
Next, go over the list thoroughly with your partner, friend or family member. This discussion will help you focus on what is really important to you.
Frankly, this strategy has saved me from buying the wrong house a couple of times and never fails to give me insight into what my family really needs and wants in a house, which is sometimes different than what we think.
The rule of twos works with cars as well. There aren’t too many things more seductive than new wheels.
Isn’t that exactly what auto designers are all about? Going through the rules of twos process will help you get beyond the glitz and glitter to the important points of mileage, resale value, repair record and suitability for your lifestyle.