JetSmooth
Well-Known Member
I'll be in Roanoke this weekend for my brother in law's birthday. Nice little city.
Cost vs. Labor - Before I do anything!
- Thread starter StarCityBrewMaster
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cimirie
Well-Known Member
Instead of posting, I sat here for 18 hours just shaking my head the whole time. This is probably more productive...
I'm glad I come here for functional brewing advice and don't ask anyone with accounting help
The idea of something being a sunk cost for a FUTURE purchase had me LOL. The sunk cost concept is about making a finance affecting decision right now in light of all that has happened in the past. I'm sure you mean fixed cost. Dammit, why why why do I get roped into this one?
No, I absolutely mean sunk cost. A sunk cost is simply a past cost that cannot be recovered. If anybody cares to reread my post I was talking about MY situation. As in, a situation where I already have my equipment (which is the definition of a sunk cost). I never mentioned future purchases. People keep attributing that idea to me, yet it was never actually mentioned.
You can laugh about anything that makes you happy, but nothing I wrote was that funny!
kidsmakeyoucrazy
Well-Known Member
It depends on what you like. I like Belgian beers...especially the ones I drank and smuggled back from Belgium. Those are around 10-12 bucks for a 750ml bottle...., or 10-12 bucks a six pack (but the best ones are in the big bottles....they just taste better to me). I can brew it (not including equipment or time) for about 2-2.5 bucks a liter.... If you're brewing to match a 7 buck a sixer beer, you'll be lucky to break even. But, the cool think about brewing is you can make stuff you can't even buy locally.
The other great thing is it's sort of like cooking at home with really fresh ingredients....when you get it right (like I did with the lemon grilled salmon last weekend)...it's just awesome and worth whatever it cost to do it....Of course a lot of this is coming from the Irish Red I brewed mid January and seems to be hitting it's "please drink me" phase.
kidsmakeyoucrazy
Well-Known Member
I couldn't resist ...A sunk cost is just that. It is money already spent. You don't base future expenditures on sunk costs...aka "I've already spent $2000 on this car, so I have to fix it to get my money back"...that is a bad decision. But homebrewing isn't about business which is why I continue to sink money into it ;P
BTW, can't we write off some of this stuff? It is a hobby isn't it?
Except that is also a misused concept. This is one of the most frequent justifications for stealing a keg. Businesses can just, "write that off" as if that means something.
If you hit someone in the mouth, just tell them to write it off.
The OP put Cost vs Labor in his/her post meaning s/he has an understanding of economics so it was addressed. If you are mortal, your time is valuable and like it or not a labor cost can be determined based upon how you choose to spend it. The OP has since moved on, so perhaps so should we all.
kidsmakeyoucrazy
Well-Known Member
I actually meant as a tax writeoff on the "hobby expeneses" line on a 1040A. I thought we were talking economicsExcept that is also a misused concept. This is one of the most frequent justifications for stealing a keg. Businesses can just, "write that off" as if that means something.
If you hit someone in the mouth, just tell them to write it off.
The OP put Cost vs Labor in his/her post meaning s/he has an understanding of economics so it was addressed. If you are mortal, your time is valuable and like it or not a labor cost can be determined based upon how you choose to spend it. The OP has since moved on, so perhaps so should we all.
There is a legitimate deduction for hobby expenses as long as you do not make money from it. I didn't realize we'd gone from brewing at home to stealing a keg....although that time the keg fell off the truck and almost hit my car (true story btw...)...we had a hell of a party the next weekend!
![Craft A Brew - Safale BE-256 Yeast - Fermentis - Belgian Ale Dry Yeast - For Belgian & Strong Ales - Ingredients for Home Brewing - Beer Making Supplies - [3 Pack]](https://m.media-amazon.com/images/I/51bcKEwQmWL._SL500_.jpg)
You'd need to consult an individual tax expert, but my understanding of hobby expenses/losses is that you can only write them off up to the amount of your hobby income. Last time I checked legally selling your homebrew isn't easy.
Ok I found this kind of interesting so I figured I would do the math myself for an extract situation with bottling.
The cheapest kit from ahs is 26.46$ with yeast. This is the American light lager. It would cost you about 40$ In ny(I did this from a quick web search)
so that is a difference of 13$. At bear minimum you would need to pick up a 5 gallon pot, a fermenting bucket with airlock, a bottling bucket, autosiphon, tubing, bottle filler, caps, a capper and sanitizer. That will cost you about 79$ at ahs. Looks like it would take about 7 batches to recoup the money spent and have it be cheeper. You would have to do this differently depending on what you are going to brew, and if you compare to a more expecive craft brew it would also be different. I'd like to try this again with all grain when I get a chance. The ingredients cost less but equipment costs are much higher.
Edit forgot the brewpot. That's another 35$. Which will make it 9 batches.
Thank god I don't do this to save money.
The cheapest kit from ahs is 26.46$ with yeast. This is the American light lager. It would cost you about 40$ In ny(I did this from a quick web search)
so that is a difference of 13$. At bear minimum you would need to pick up a 5 gallon pot, a fermenting bucket with airlock, a bottling bucket, autosiphon, tubing, bottle filler, caps, a capper and sanitizer. That will cost you about 79$ at ahs. Looks like it would take about 7 batches to recoup the money spent and have it be cheeper. You would have to do this differently depending on what you are going to brew, and if you compare to a more expecive craft brew it would also be different. I'd like to try this again with all grain when I get a chance. The ingredients cost less but equipment costs are much higher.
Edit forgot the brewpot. That's another 35$. Which will make it 9 batches.
Thank god I don't do this to save money.
It costs me around $28 for a case of 24 for a good tasting beer at my local beer store. With home brewing (with kits) I can make a significantly better tasting beer for alot less money. For around $40 I can make 67 beers. That's $14.33 for a 24.
Store = $1.16 per beer
Home = $0.60 per beer (way better taste)
Some might say the savings dont justify doing it, I disagree.
Store = $1.16 per beer
Home = $0.60 per beer (way better taste)
Some might say the savings dont justify doing it, I disagree.
bullinachinashop
Well-Known Member
remilard
Well-Known Member
Given the purpose of this thread, to provide advice to the OP, your post in context was advice that once the equipment is purchased it will be a sunk cost, which is absurd advice.
If you want to talk about your situation free from the context of the OP, a new thread would be more appropriate.
Pivot
Well-Known Member
Im in college and the reason I started brewing was for a cheaper way to drink, and so far its proving to be very true. i would not be drunk nearly as much as i am now if it wasnt for homebrewing!! I have all the equipment I need for a few years and when i make 5 gallons for 20-30 bucks then yes i am making it very cheap
CarsonCE
Well-Known Member
SWMBO and I have an agreement. We are pretty picky about our finances, and we keep track of what we spend money on. We consider ingredients to be a regular expense (we buy less commercial beer and it easily offsets). We consider new equipment to be an extra expense and we wait for our coffers to be full before purchasing.
Once you buy your initial equipment, you can easily brew cost effective beer. You will quickly learn what new equipment you want but don't need. When you save some money, you can then buy that equipment to help streamline your process and brew better beer.
Once you buy your initial equipment, you can easily brew cost effective beer. You will quickly learn what new equipment you want but don't need. When you save some money, you can then buy that equipment to help streamline your process and brew better beer.
99% of us can easily justify the hidden costs of this hobby because we so thoroughly enjoy it. In fact, I'd probably still homebrew if I gave most of it away. The decision to homebrew has to be based on the intrinsic enjoyment of the act of homebrewing because unless you consider your time worthless, ignore energy costs, and work with bare minimum equipment, it is not a cheap way to get beer.
Work it out like a school word problem.
What is the cheapest way to obtain beer, buy or make? If you answer this question objectively, not as a homebrewer but strictly as a beer drinker, all costs including labor must be worked into it. If you skip it, you're cheating and you fail.
Work it out like a school word problem.
What is the cheapest way to obtain beer, buy or make? If you answer this question objectively, not as a homebrewer but strictly as a beer drinker, all costs including labor must be worked into it. If you skip it, you're cheating and you fail.
calbrew
Member
Agree, and the first time you hand over a bottle of your brew for someone to taste and they say "it tastes like beer", its really satisfying...or annoying on second thought.
Just my two cents, I work for a beer distributor and can get beer CHEAP, but obviously I'm here because I too have been sucked in. Making your own beer will always be more rewarding in the long run than just runnin to the store.
Hang Glider
Beer Drinker
+1,000,000
You're in it for the love of the hobby. Period. If I paid a dollar an hour to myself for my labor, I'm already underwater. You cannot "save" money with this hobby if you value your time.
Of course - there's always going "pro" and making 150 gallon batches for sale...
stageseven
Well-Known Member
At this point it's absolutely saving me money. If I'm not buying decent beer, I'm not buying beer at all. When I do still buy commercial beer I only buy craft beers or imports I wanted to try out. Last night for instance, I got a bottle of DFH Red & White, a 6-pack of Stone Pale Ale, and a 4-pack of North Coast's barleywine. It cost about $38 for what amounts to about half a case of beer. It only cost me $10 more to get ingredients to make 7.5 gallons, so that's like 3 cases.
I can understand factoring in equipment costs to figure out your actual cost per beer, but I really don't get factoring in the time. It's a hobby, most of us do it for fun because we enjoy it. If I go to the movies I'm paying to sit there for 2 hours and do nothing. I'm not saying the true cost of that movie was $24 because my ticket was $10 and I could have made $7 an hour working at McDonald's in that time.
There's value in the fact that you're enjoying yourself at the time. I think that more the offsets any theoretical cost of what you could have been doing otherwise.
I can understand factoring in equipment costs to figure out your actual cost per beer, but I really don't get factoring in the time. It's a hobby, most of us do it for fun because we enjoy it. If I go to the movies I'm paying to sit there for 2 hours and do nothing. I'm not saying the true cost of that movie was $24 because my ticket was $10 and I could have made $7 an hour working at McDonald's in that time.
There's value in the fact that you're enjoying yourself at the time. I think that more the offsets any theoretical cost of what you could have been doing otherwise.
remilard
Well-Known Member
I'm not sure why this is so hard to understand, but I am now convinced that basic economics should be taught in high school.
It costs more in terms of overhead, ingredients and the opportunity cost of your time to brew beer than to buy it.
Depending on how much value you place on brewing as a leisure activity, you may derive sufficient utility from home brewing (making + consuming) to offset the higher cost.
That's exactly what it costs to watch a movie. The cost of the ticket plus the marginal value of the time. You will only choose to watch the movie if the marginal utility of leisure spent in that fashion is greater than the cost. If you go to a movie rather than working, how can you interpret that in any way other than that you value going to the movie more than the money you would have earned by working?
It costs more in terms of overhead, ingredients and the opportunity cost of your time to brew beer than to buy it.
Depending on how much value you place on brewing as a leisure activity, you may derive sufficient utility from home brewing (making + consuming) to offset the higher cost.
That's exactly what it costs to watch a movie. The cost of the ticket plus the marginal value of the time. You will only choose to watch the movie if the marginal utility of leisure spent in that fashion is greater than the cost. If you go to a movie rather than working, how can you interpret that in any way other than that you value going to the movie more than the money you would have earned by working?
OP
OP
StarCityBrewMaster
Well-Known Member
I'm the OP and basically what I wanted to make sure of was from an ingredients standpoint I wasn't going to get in over my head with costs. I can see what it costs for basic equipment and I'm ok with that initial cost. I didn't understand at the time of the post what ingredients cost, how much brew that made, and how much time when into it.
What I didn't want to do is find out that I was going to be paying much more than what it cost to walk in and buy beer at the store. With out a doubt I would love to make my own beer and I am getting my equipment to do so this weekend but I don't necessarily have the funds to make my own brew at a higher cost than that of a store purchased beer on a consistent basis.
Now that I have the answer I was hoping for in that "yes" beer making cost less strictly from an ingredients standpoint and I have something to tinker with (which all guys need) that has an end result that can truly be enjoyed by myself and others there is no reason why not to brew your own beer. Laziness would be the only reason not to or if you have a taste for only piss beer (coors, natty, bud light) like my dad. In fact every time my dad see's me drinking an import or a microbrew he say's to me "if I wanted an import I'd drive to Canada and order a Budweiser."
What I didn't want to do is find out that I was going to be paying much more than what it cost to walk in and buy beer at the store. With out a doubt I would love to make my own beer and I am getting my equipment to do so this weekend but I don't necessarily have the funds to make my own brew at a higher cost than that of a store purchased beer on a consistent basis.
Now that I have the answer I was hoping for in that "yes" beer making cost less strictly from an ingredients standpoint and I have something to tinker with (which all guys need) that has an end result that can truly be enjoyed by myself and others there is no reason why not to brew your own beer. Laziness would be the only reason not to or if you have a taste for only piss beer (coors, natty, bud light) like my dad. In fact every time my dad see's me drinking an import or a microbrew he say's to me "if I wanted an import I'd drive to Canada and order a Budweiser."
And my input too.... So I just bottled my first batch last weekend. It is a brown ale. Between the cost of my equipment and the recipe kit, my 49 bottles of beer will be about $4.50 a bottle... right now it isnt saving me any money but with each batch I make, I will eventually be ahead of the game, just because I watch what I spend. I am not including my time because it is a hobby and I get enjoyment out of it. This subject has been brought up at work before with hunters I work with. They do it to put food on the table, but by time they buy a gun, deer tag, truck, gas to get to the hunt, camping supplies and food to survive while on the hunt, it doesnt make sense to go hunting to save money right away. Eventually the cost come down, assuming they use the same truck and gun for many future hunts for years down the road....
djt17
Well-Known Member
Well said...it appears that you managed to retrieve valuable information from this thread even though it took a few detours.
stageseven
Well-Known Member
Wow, that wasn't at all condescending. However, the rest of your post pretty much illustrates my point. So far everyone I've seen in the thread saying that you have to account for time in the "cost" of the beer isn't accounting for the value of enjoying what they're doing. For simplicity, I would not include the value of the time into factoring the cost of the batch, simply because the fact that I choose to do it shows that I value the entertainment more than I value the time it takes to do it. It's impossible to assign an actual figure to the value of the entertainment factor, save that it's greater than the marginal cost of the time. Simply ignoring that value when you are factoring the value of the time in the cost of the beer leaves the equation unbalanced. Btw, are you factoring in cost of gas, time driving, time spent standing in the store deciding what you'd like to buy, etc. into your cost of commercial beer?
Yes I know we're talking about cost vs value. It just seems relevant.
To the OP... glad you got the info you wanted and enjoy your new hobby! Sorry for the detour.
NorCalAngler
Well-Known Member
When I play a round of golf and my wife asks how much it's going to cost I don't tell her $60 plus 5 hours of labor at $25/hr. The same thing applies to making beer. If I wasn't making beer I would be watching TV, playing video games, surfing the 'net, or some other activity that adds zero income.
Since the first point I made is still valid, I'll just post it again..
The obvious fact is, any time someone comes in asking what appears to be a simple question of "what does it COST to brew beer", viewers will either answer in terms of their already biased view of the HOBBY or they will think of it as an economics question. It's all personality I suppose. Maybe the answer should always be, yup, homebrewing is extremely cheap. We all already have that answer on deck for SWMBO anyway.
However, if some day someone really comes in asking whether it is cheaper to make beer rather than buy it... nevermind, no one does that.
The obvious fact is, any time someone comes in asking what appears to be a simple question of "what does it COST to brew beer", viewers will either answer in terms of their already biased view of the HOBBY or they will think of it as an economics question. It's all personality I suppose. Maybe the answer should always be, yup, homebrewing is extremely cheap. We all already have that answer on deck for SWMBO anyway.
However, if some day someone really comes in asking whether it is cheaper to make beer rather than buy it... nevermind, no one does that.
Golf isn't a hobby that produces a product that people buy. No one asks if it's cheaper to make or buy 18 holes of completed golf. Analogy doesn't hold up.
NorCalAngler
Well-Known Member
In the strictest sense, you're right the analogy is off. My main point is about the labor hours of a hobby not being calculated in any other scenario so why in homebrewing? You're right, this is a hobby that costs about the same as a round of golf, but you are also producing a consumable product that you would otherwise buy. It's a double-win!
The other way to think of this is that we all embrace homebrewing as a hobby that just happens to supply us with a great product. If the product was the ONLY reason one would consider it, hence no intrinsic enjoyment, it would not be worth it.
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Yes, but the reverse is true also. If the process was the only reason to brew there'd be no enjoyment either. If brewing didn't produce a product that we can enjoy and can share, I don't think that anyone would do it. It's not the process that we take pleasure in. If our yeast only produced CO2 and not alcohol, I doubt if there'd be brewers spend all the hours we do trying to make better CO2. Homebrewing is mostly about producing a consumable product and for some, improving upon that product and its production method.
Edit:
Drifting off-topic here, but I think the OP has his answer.
CarsonCE
Well-Known Member
I don't know what you're talking about. Personally, I save all my CO2 produced during fermentation in bottles, balloons, and ziplock bags. I dump the beer after primary fermentation. All my friends agree that my CO2 is superior to any other they've had. Sure it's more expensive than just creating CO2 from respiration, but it's my hobby!
/sarcasm
