It is Obvious

Chris Rick has got altogether too much to say

Archive for January, 2014

Shall I?

Posted by chrisrick13 on January 9, 2014

It is obvious: I am a thinking person

Yesterday I became a grandfather again.  I feel no pain as it is 12,000 miles away.  My wife and I went out for a meal to celebrate.  Orange Wednesday, so we went to Pizza Express and had one meal for free.  I know how to give a girl a good time.

The question I ask of my wife about something like that, on occasion, is: how do you know we can afford that?  Not a question I ask that often as the response is usually aggressive.

It came to £30 and I had £30 in my pocket.  So I certainly had the money.  Spending the money did not stop me doing anything that evening and it won’t stop me doing anything this week.

What if I want to fly and see that grandchild in the middle of this year and I am £30 short of the airfare?  What if, in, say, 3 years I need to repair the roof and am £30 short?

I don’t have infinite money so any money I spend now will mean that I have  less to spend on something else later.

I could take the risk.  Spend now on what I want and if I am short later on borrow the money and then choose not to go to the restaurant one day and instead pay off the loan…provided I can persuade to the thought that someone I am a good risk.

There are a lot of factors that I am not going to list.  They all involve predicting the future.  The chances of getting the numbers to balance when I die are remote.  I am going to die owing money (good) or I am going die leaving an inheritance (bad).  Along the way I am going to do a lot of the things I want to do and not doing an even bigger number that I also want to do.

There is a key though.  If I do the things that are most important to me first, then the things that matter least to me come under increasing threat of not happening.  I’m going to be getting the most ‘bangs-per-buck’ that I can.

Hands up who thinks that through for all the things that they buy?  Thought so.  Don’t bother me now though, I’m debating with myself about acquiring a Kit Kat.

It is obvious: I am a thinking person sorely in need of something to occupy my time

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We don’t need no education

Posted by chrisrick13 on January 8, 2014

It is obvious: your money or your life

I saw an article estimating the cost of putting a child through private education.  I didn’t like their numbers as they were going for a headline.

A bit of research says about £10,000 a year for a nice round number.  Hope they go to A-levels, or whatever their name is now, and you pay £130,000 at today’s rates.  Add in the extra costs for trombone lessons and a nice round £150,000 comes out.

There is now a lot to consider.  At the moment putting anything in the bank and having it buy as much as it did a year later is not easy to do.  So not paying for private education means that you will lose some of the value of that £150,000 13 years later if you keep it.  That gives me a powerful argument to spend it on myself.  Maybe I could spend it on healthier food: organic, free range.

What incremental value do I get over using (free) state education?  Perhaps a higher grade or two at A-level, perhaps an extra A-level.  Could make a big difference: university or not .  Who said that university was so important?  Gates and Buffett didn’t do it.

How would it have affected you if your parents gave you £150,000 when you were 18?

It is obvious: your money or your life – I’ll have both please

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I wonder

Posted by chrisrick13 on January 2, 2014

It is obvious: I told you so

I remember reading about astronomers in the distant past having the earth at the centre of…everything.  They would draw up their charts for celestial motion based on observations.  Then a while later their new observations required charts of more complexity to keep the earth as the rotation point.  I can’t remember the academic journey to the sun being the centre but it was bound up in a lot of theology and pain.  I’m sure that whatever was happening in public there were plenty of ‘heretics’ who tried putting the sun at the centre and got nice simple charts.

There are many similarities to today in economics.  There are many theories about what is happening and what to do to run national economies.  However there seems to be changes in response to observed events to make the theories fit.  They get ever more convoluted.  Alas there is no simple sun-in-the-middle solution.  There are plenty of ‘heretics’ around who are putting out much more realistic analyses of what is happening and the likely course of events.

I have to mention Keynes about whose work I know little.  He and other great names were operating at a time when GDP was sitting in the middle of the very flat part of an exponential curve.  Consumption of resources was in the same place.  This meant available resources were essentially infinite as was the ability to grow economies.  The observations and their theories that explained them were, to continue the analogy, of another solar system.

Today we run national economies based on theories that applied in another place – physically the same but separated in time, sitting on the steep part of the exponential curve.  There is a simple answer: assume no growth.  Until we do that we will have more and more complex celestial charts covered up by more and more obfuscated statistics from government, central bankers, and those with vested interests.

It is obvious: I told you so is not something I want ever to say

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