Thoughts on capital purchases; 29 Aug 10

I’m not really sure what prompted the following but I guess we’re all concerned, if not worried, about the state of the economy and that starts you thinking about what you’ve spent your money on. Anyway I started thinking about my biggest capital purchases. And if you get to the end of this entry you’ll find out what really triggered it.

In common with most people I guess my biggest ever capital purchase has been my house. In my time I, in partnership with the wife, have bought 5 houses. There were a couple in North Wales way back, for reasons which are too boring to recount, which cost £12K and £30K in the 70s. We also bought our first house in Switzerland in the early 80s for just under SFr500K (then a little over £200K). We’ve since bought houses in Wilmslow (1993) and Cambridge (1997) also for a little over £200K. We still have the latter and it embarrasses me to say what it’s currently said to be worth.

Big purchase number 2 has been my car. As a young man in the 60s and 70s I bought a succession of cars for ‘some hundreds’ of pounds. The last of these was a Triumph Spitfire; those were the days! I then bought and sold a Subaru in Indonesia, a Honda Civic in Hong Kong and a BMW320i and a Nissan Prairie in Switzerland. I then found myself in the fortunate position of getting company cars until 2004 when I bought a new Skoda Octavia for about £12K. I have since traded this in for a new model which is still with me.

These two are similar in that prices have gone up over time. The next two show the opposite trend.

I bought my first computer in the late 1980s. That was a 386 processor PC and I think it cost about SFr6K although I might have got this wrong. I replaced this with one from Gateway in 1995 for just under £2K. I traded up again in 2001 for £1K and when I had a hard disk crash a couple of years ago traded up one more time buying from Dell at £500.  I also bought a laptop in 2004 for about £1K which I still have. Clear evidence of the impact advancing technology and ‘Moore’s Law’ has had on the cost of such goods

Big capital purchase number 4 has been my camera. I bought my first SLR, a Minolta,  in Singapore in 1974 for, I would guess, about £400. I replaced this in Hong Kong in 1978 and in Cambridge in 2002 for the same amount. I then went digital with a Sony for £400 in 2006. This was stolen in Bali in 2008 (click here for that story) and I replaced it the same year, again for about £400. Of course there have also been lenses along the way which have added another couple of hundred pounds at different times.

And finally: big capital purchase number 5 is my latest pair of glasses. Check out the photo above. You can hardly see them. As the lady in the opticians said ‘very minimalist’. They are also very light weight which I like but I thought rimless would be cheaper, less material right? Not these. They are made by a Danish company: Lindberg. They are also vari-focals. It has been a bit of an eye-opener (sorry) that such an apparently incidental purchase should number so high in my list of all-time major capital purchases.

The smart reader might note that I have ignored other purchases for the house like furniture, new kitchens etc but forgive me. I am a man and such items are more like consumables. They’re not gadgets.