I started self-hosting after noticing that my AWS bill increased from like $300 per month to $600 per month within a couple of years. When looking at my bill, 3/4 of the cost was 'AWS Other'; mostly bandwidth. I couldn't understand why I was paying so much for bandwidth given that all my database instances ran on the same host as the app servers and I didn't have any regular communication between instances.

I suspect it may have been related to the Network File System (NFS)? Like whenever I read a file on the host machine, it goes across the data-center network and charges me? Is this correct?

Anyway, I just decided to take control of those costs. Took me 2 weeks of part-time work to migrate all my stuff to a self-hosted machine. I put everything behind Cloudflare with a load balancer. Was a bit tricky to configure as I'm hosting multiple domains from the same machine. It's a small form factor PC tower with 20 CPU cores; easily runs all my stuff though. In 2 months, I already recouped the full cost of the machine through savings in my AWS bill. Now I pay like $10 a month to Cloudflare and even that's basically an optional cost. I strongly recommend.

Anyway it's impressive how AWS costs had been creeping slowly and imperceptibly over time. With my own machine, I now have way more compute than I need. I did a calculation and figured out that to get the same CPU capacity (no throttling, no bandwidth limitations) on AWS, I would have to pay like $1400 per month... But amortized over 4 years my machine's cost is like $20 per month plus $5 per month to get a static IP address. I didn't need to change my internet plan other than that. So AWS EC2 represented a 56x cost factor. It's mind-boggling.

I think it's one of these costs that I kind of brushed under the carpet as "It's an investment." But eventually, this cost became a topic of conversation with my wife and she started making jokes about our contribution to Jeff Bezos' wife's diamond ring. Then it came to our attention that his megayacht is so large that it comes with a second yacht beside it. Then I understood where he got it all from. Though to be fair to him, he is a truly great businessman; he didn't get it from institutional money or complex hidden political scheme; he got it fair and square through a very clever business plan.

Over 5 years or so that I've been using AWS, the costs had been flat. Meanwhile the costs of the underlying hardware had dropped to like 1/56th... and I didn't even notice. Is anything more profitable than apathy and neglect?

The most likely culprit was talking to other nodes via their public IP instead of their local ones. That gets billed as interent traffic (most expensive). The second culprit is your database or other nodes are in different AZs and you get a x-zone bandwidth charge.

Bandwidth inside the same zone is free.