The difference between price, cost, value, and worth

I used to drive a used German car with over 300,000 miles on it. The price of the was only $1200 when I bought it.

The cost of the car was another $3300/year of insurance, repairs, inspections & registration, plus all the time of caring for it, and all the frustration of things breaking and degrading over time.

The cost was high, but the value of the car was even higher. It gave me comfort, style, and total freedom of movement. It gave me a way to get to work, to visit loved ones, to travel and look cool in a German car.

But when it came time to sell the car, the car was worthless. No one would buy it. No one wanted to learn the cars quirks, or put up with its failing components. The only buyer was a junkyard who paid me $200. The junker can get value out of the car by selling parts, but I can’t. Worthless to me. Valuable to him.

Price, cost, and worth are all out of your control, but value is up to you. Make sure you know which is which.