Future loss to present cost ratio
Okay – so I have nothing better to do on a Sunday morning than think about this. And yes – I do ‘have a life’!
Some advert came in from Argos on new TVs. I don’t even need a new TV. I click on the advert and came across a 75-inch Samsung TV for £900(£899 – if you have OCD).
Right – so there is a story about my two TVs.
My first TV was from Richer Sounds about 8 years ago at a cost of £699 (with 6-year warranty included in price). It was a plasma 50-inch TV screen. The screen developed problems at year 5.5. They replaced it with a brand new LED TV that was slightly bigger and better specification at no cost under their 6 year warranty. It’s going well and I have not felt a need to replace it. My future loss here is £699.
My second TV (no longer available) functions as my computer monitor. It was purchased on 19 Feb 2017 at £649 again from Richer Sounds with a 6 year warranty included in that price. It’s brilliant. I can stream my Neflix, Amazon and some online TV channels. This TV would have minimal or no resale value to today. So my loss on future value is say £649.
Now I could have bought much higher spec TVs i.e. 4K this and that for say £6K to £8K. That’s not an over estimate at all. 8 years ago a 4K TV of same screensize would probably have been £6K. Then 3 years ago a 49 inch 4K would have been around 2 to 3K. So – call that ‘present cost’ or projected present cost. But that projected present cost is a greater projected ‘future loss’. Tons of people are now totally confused. I just know it.
So by not spending excessively on high-end TVs, I’ve avoided a loss of £6000 – £1350 = £4650. So my ratio of ‘future loss’ to present cost (at time of purchase) is 4650/1350 = 3.4. That’s fine for me. It may not be fine for ‘everybody’ else.
Now if either or both of my TVs go on the blink, I can get something much better in terms of specification. But again, I would not purchase at the high-spec end of the market. It’s just a waste of money for ‘feel-good’ factor.
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