I thought so too.... as i spent over $1000 on our stash. But we used it for 14 months before i decided to go back to disposables, and i ended up selling it second hand for $600. So if you work out the math that way... it definately saved money because it only cost me about $400 on nappies for 14 months, which is heaps cheaper than disposables. For us though, in the long run, we worked out that my time was worth more than having 2 children in cloth - the amount of washing and hanging time was just too much. So they are both in disposables now, and although it costs more and creates more rubbish, i have more time to spend with the kids and for myself.

I guess it depends what kinds of nappies you use, how long you plan to use them for, whether you would use them for 2 kids in the end and then how much return you'll get back when you sell them.