plonkee money an english-er's thoughts on personal finance

July 31, 2008

mobile phones and blackberrys

Filed under: shopping — Tags: , , , , , — plonkee @ 12:00 pm

My last contract on my mobile phone has just run out, so I’m free to switch. I’m currently with T-Mobile on a £25 a month tariff. I don’t really use my mobile all that often, usually it’s a couple of dozen text messages and some 50 minutes of calls a month.

One of the things that’s actually really expensive on my tariff is data. Browsing the internet and accessing email are both possible on my phone, I’ll just have to pay an arm and a leg to do so. And really, it’s something that I’d like to be able to do. I’ve always got emails to check, and I travel a reasonable amount, it would be helpful to have be able to access them whilst I’m not connected to t’internet with wires.

So, I’m contemplating getting a Blackberry. I can get one with O2 for free on a two year contract with 250 texts, 75 minutes and unlimited WAP and “Blackberry Data” (in quotation marks because I have no idea what that means). Oh, and the total cost is £25 a month.

Apart from the contract being twice as long as my existing contract this seems too good to be true. It does have fewer phone minutes than my existing contract, but still more than I actually use each month. Is there something that I’m missing?

Naturally, I can’t make an important decision like getting a new mobile phone without some input from  you guys, so what do you think? Am I just imagining  that a Blackberry would be good? Is there a fatal flaw in this plan?  And what exactly is Blackberry Data anyway?

Thanks in advance :) .

July 29, 2008

financial goals, and living your life anyway

Filed under: philosophical — Tags: , — plonkee @ 12:00 pm

Having taken up the oboe, naturally I spend some time hanging out on music student forums. From time to time, someone will post a thread asking whether they could become a professional musician. It seems to be the general consensus that with enough work and a suitable teacher, anyone sufficiently dedicated could get to the standard required for music college. In case you’re interested I’d reckon something in the region of 2,000 to 3,000 hours of proper structured practice would be required.

But it got me thinking about whether anyone could become rich. I’d say it’s the general consensus that with sufficient drive and focus, anyone sufficiently dedicated who is reading this blog could accumulate a million pounds. You’d need to put the power of compound earnings to work and so it couldn’t be done overnight. But if it’s what you really want to do, it’s not that hard – simply spend a sufficient amount less than you earn, invest the remainder and keep going for at least 10 years.

Really, most things are within the reach of most people, if they set them up as their only goal. The trick is in trying to balance competing goals. I want to travel, and have a nice house, and not worry about money on a day to day level, and wear decent clothes and save and invest a good proportion of my income. I don’t have the single-minded focus needed to accumulate a large pile of money, or pay off my mortgage within a few years.

If you have a goal that’s going to take more than 2 years to reach, I think that it’s extremely difficult to focus solely on it for the duration. To give yourself the best chance you need to make it as automatic as possible, and to allow yourself other pleasures in the mean time. There’s only so long that you can put the rest of your life on hold.

It’s much better to acknowledge these sorts of limitations, than pretend that they don’t exist. If you don’t then you won’t stay on the wagon. Instead be realistic. Cut back on things that you don’t care about, invest energy in things that make you happy. Keep your eyes on your goal, but allow other good things into your peripheral vision.

July 25, 2008

planning for the worst

Filed under: philosophical — Tags: , — plonkee @ 12:00 pm

Good news is in.

With access to the right drugs, HIV has become a manageable chronic illness rather than a fatal disease. It’s kind of like Type I Diabetes now, although if you stop taking insulin you’ll die much more quickly – if you stop taking HIV medication then there’s a variable amount of time before you develop Aids, after which you’ve probably got 9 to 12 months.

As with diabetes there can be serious complications, in the case of HIV these can be from the effects of the virus itself, and the side-effects of the anti-retrovirals required to keep it at bay. But treatment has added 13 years to average life expectancies of HIV+ people already, without treatment 10 years after the point of infection was your expected lifespan.

cost of treatment

In addition to increasing life expectancy, the cost of treating HIV+ patients has also been revised upwards. It’s been estimated at $618k over a lifetime, which sounds like a lot of money to me, but apparently it’s about the same as the lifetime cost of treating heart disease. In the UK, treatment for HIV is free on the NHS to legal residents (no prescription charges), which is good because even with standard costs, all those drugs would work out expensive.

planning for a brighter future

I’m sure you’re all pleased about this, but what does it have to do with personal finance?

Well, I’m sure you remember that diagnosis of HIV+ status used to be a death sentence. If you know you’ve only got a few years to live, you plan things differently. And just like every cloud has a silver lining, I’m convinced that every piece of great news has it’s own downsides. The downside of realising that your life expectancy has seriously increased is that it means that you’ve got a future – one which will require money. You’ll have to plan for retirement after all.

I’m a firm believer in expecting the best, but planning for the worst, the implications of this are often counter-intuitive. If you have a reduced life expectancy then you should plan for the worst – which is that you’ll die early, but on the other hand as far as your finances are concerned the worst case is actually that you live longer than expected and run out of money.

For people struggling with infertility who decide to go for IVF treatment, the worst outcome personally is probably that they spend thousands on cycles and still end up without a successful pregnancy. But, as far as budgeting goes, the worst (most expensive) outcome is that you spend thousands on cycles and end up with a successful pregnancy with twins or more. Because they are expensive. Really expensive.

You may as well set some money aside to prepare for the expense of things going better than expected. If they don’t, the money can be used for other purposes – if you can’t think of anything, I can give you a list of suitable charities. Naturally, you should balance this against the pulls on your money. But sometimes planning for the worst, actually means planning for the best as well.

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