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Dec 11 2008

How Banks Make Money

Jamie Barrows

dollarback

 

Just read a very funny (and informative,  if I’m remembering my economics classes correctly) post on the banking industry.

It made me laugh, so I thought I would post it here. Click the link to read it for yourself. How to make Money


Jul 30 2007

Do we live in a disposable culture?

Jamie Barrows

Disposable Culture


The above cartoon really struck me. Probably because it is so real. Nearly everything I own is disposable. I don’t mean disposable in that you throw it away after a single use. There are plenty of items in my house and office that are single use items. People have been complaining about the amount of trash our modern society generates because of disposable items for a long time.

No, what I mean is that nothing I own was built to last beyond a few years. It used to be that things you bought would continue to work for your entire life. You could even pass them down to your children or grandchildren. Now, nothing lasts that long. I kind of already knew that. So it isn’t really a surprise, but I guess I never really thought about it and analyzed it. So why is everything disposable? Would it be better if things were the way they used to be?

There seem to be several reasons why everything is disposable. If it has to do with electronics, its simple. The technology changes so fast that designing anything to last more that a few years is a waste. No one is going to want the fancy stereo that is ten years old. Even if the stereo works as well as it did when it was purchased. And if the item is a computer it will not just be clunky, it will also be useless after a few years. The same goes for things like cell phones and TVs. No one wants them after a few years. So what is the point in building them to last that long.

But what about other machines we use? Things like coffee makers, microwaves, dishwashers, and pretty much any household appliance? Are the ones you have in your house really any better than the ones your parents had? No one really cares if they have last years microwave model, or if their vacuum cleaner is three years old. And yet, none of our household appliances last beyond a few years anymore either. I think that is largely a labor problem. It costs almost as much to fix something as it does to buy another one. So rather than fix it, we trash that microwave and buy a new model. The manufactures know we want the lowest price, and know we will put up with buying a new model every year or two. So they make the machine cheaply with inferior parts. And we buy them. The expensive four and five hundred dollar machines that will probably last longer are left on the shelf. The cheap under a hundred machines are snapped up. our logic being that if it breaks in a year, we can buy another one and still end up saving money.

But this doesn’t apply only to machines and electronics. It applies to everything from clothes to furniture. We buy cheaply made things with the intention of throwing them away when they wear out. And we expect them to wear out rapidly. Gone are the days when people would save for a year or two to buy a furniture set that would last them their entire lives. Now people buy cheap furniture and throw it out when it breaks or even sometimes when they move. Often it is more expensive to move the cheap furniture to your new home, than it is to just buy some more.

So I ask, is this a good thing? Would we be better off if everything wasn’t disposable? I really don’t know. On the one hand, nothing we have is actually worth anything. On the other, we can afford so much more.

I can afford to furnish my whole house without having to save for years. I can afford every appliance a modern kitchen would contain. Big screen TV, high powered stereo, a computer that runs all of the latest software, no problem. I can have it all now. No need to wait and save. That’s the benefit of the disposable culture.

The downside is that nothing I have is worth anything. I won’t be passing any of my furniture or dishes down to my children and grandchildren. because everything I have is junk. And all of it will break down or fall apart not long after I get it. everything I currently have in my house will be going to the dump after it breaks. And it will break.

So I guess I don’t really know what would be better. To have less stuff that is better quality, or to have more stuff that is poor quality. Let me know what you think.


Jun 26 2007

Priorities: Were we spend our money

Jamie Barrows

Money

I had an interesting conversation with someone the other day. It was all about what we put our money into after paying for our basic needs. And that got me thinking about what I do with my money as opposed to my friends.

I have a tendency to live with older, not as nice things, so that I can always have spending money for trivial things when they come up. For example, I drive an older car. A lot of my friends have new cars and trucks. Many of them quite nice. All of those cars are on payment plans. Which is not really a problem. I could afford the payments on a new car, I just would rather have the extra money for trivial and non-essential things.

So any time I’m out with people and they want to do something, I can always afford it. I don’t have to ask myself if it is in my budget. Many of my friends cannot. Clothes, electronics, computers, are all things that I have but that aren’t the best or the latest. All things that my friends spend their money on, but I make do with what I have. I wear last years fashions, use an older computer, have an older TV. My friends don’t. They buy all the latest. They also have to watch their budgets a lot closer than I do, just to be able to pay all their bills. Of course, they have the benefit of having nicer stuff than I do, but I have the benefit of a freer budget.

I don’t really think my method is better than theirs, it’s just different. I end up spending as much money on trivial things as they did on their new cars, clothes and electronics. So I’m not really saving much more than they are, or using the money in a wiser way. Just differently.