Monday, June 6, 2011

Durable goods - 10 year period.

I have been heavily involved in closing out a contract at work last month, hence 13-14 hours a day, for a month was a norm.  In our industry competition is fierce, hence no overtime, no bonuses, just hard work.
Thinking about family finances made me realize that every new appliance means that sooner or later it will require a replacement and you have to start saving for it straight away.

Current story:
#
Item
# per family
Cost per Item
# replacement every years
Over 10 years, USD
1
Mobile phone
2
750
3
4,500
2
Camcorder
1
2,500
5
5,000
3
Camera
1
2,000
5
4,000
4
Laptop
2
2,500
5
10,000
5
Car
1
35,000
10
35,000
6
Miscellaneous



10,000

Total



70,000

It means that to replace them we have to save about 600 USD a month, just to maintain current position. This is just a reminder that every new buy will cost you over the lifetime, just to keep it the same.