Saturday, 7 November 2015

Credit Where It's Due

How time flies in the world of technology! My partner has just ditched the "new" laptop she bought 18 months ago because, despite its many attributes, it had two maddening characteristics: it was unable to keep up with the speed of her neurotransmissions and it was reluctant to connect with unfamiliar Wi-Fi systems - as if it was shy or suspicious of them. If there are two things we all expect from computers these days they are speed and Wi-Fi connectivity so it has been discarded, its cost written off, and replaced by a model which is not only faster but also bolder (it needs to be, since it has no socket for cable connection to a router).

It is also quite expensive, so before buying it we reviewed our finances - mindful, as always, of Mr Micawber's advice to heed the importance of cash-flow and its starkly alternative bottom line results, "happiness" or "misery". This I was able to do on my own laptop because - while I will always be grateful to Micawber for explaining so succinctly the advisability of regulating expenditure according to income - I do have Microsoft to thank for providing a tool with which to do the maths: the Excel spreadsheet. Left to my own devices the calculations would most certainly be questionable. Happily, as it turned out, the insertion of the proposed purchase into the "November" cell did not turn the ink red further along the row. How I love computers - sometimes.

But people's expenditure isn't always controlled according to Micawber's rational principle. All too often a cashflow will result in "misery" because of unaffordable purchases. Perhaps in such cases the possibility of a lottery win might have been factored hopefully into the equation? When I was re-organising my favourite websites into folders yesterday (it was raining) I noted with some alarm that I had filed the National Lottery website in the 'Finance' folder, along with HSBC, Halifax, Lloyds, HMRC etc. Optimistic? I think so: to date the National Lottery has had only a negative impact on our finances.

It has been observed that "Too many people spend money they haven't earned, to buy things they don't need, to impress people they don't like". It's true that we are easily persuaded to spend more than is necessary - whether we can afford it or not. The power of branding proves the point. Apple, for example, is the only manufacturer which makes a good profit on handsets. It does this by being able to convince people to pay much more than they would for other brands and, while there are those who buy an iPhone because they prefer the technology, there are others who simply want to be seen to be able to afford it. Some can afford it: for the rest there is credit - a concept which tests the notion of affordability. A cautionary note here - and I'm sure Micawber would have agreed: credit is better employed in the acquisition of appreciating assets than it is in the purchase of depreciating hardware.

But this inclination to buy stuff on credit may be just a passing phase. Futurologists are already predicting the end of personal ownership of cars - once they become driverless and universally available on-demand per journey there will be no need for individuals to buy them and keep them parked up for most of their useful life. It could be the beginning of the end of superfluous consumption and the dawning of a new age of sustainable economics. For years now it has been possible to rent mobile phones: I hope the same will apply soon to laptops, as I've accumulated quite a few "old" ones already.


Tom Brent said...

Logical observations well noted as usual Jo. Thanks Tom

Joe Holdsworth said...

Thank you Tom.