Do the Math

A lot of acquaintances often approach me to suggest them a PC configuration that would last 4-5 years without the need for an upgrade. Understandably, they are willing to invest a premium amount for the fastest hardware, but I must say, it's for all the wrong reasons.

My advice is rather simple - no hardware out there is future-proof, irrespective of how powerful it may seem today. So there's absolutely no need to pay a hefty premium for the fastest components available, just to avoid an upgrade a couple of years down the line.

Buy the fastest, only if you really "need" that much processing power, or if you have enough money to splurge to simply flaunt the hot-stuff. Don't buy it thinking that you'll actually save money by not upgrading it for half a decade; that's like buying a diesel car hoping to save on the operating cost because diesel is cheaper. Now what's wrong with that, you may ask. Nothing, other than the fact that in all probability, you've already paid for the fuel you were intending to save your money on. Confused? Let me do some math for you.

Let's take an example of any B segment mid-sized car. The cost of the diesel version on an average is Rs. 1.2 lakhs higher than its petrol variant. The cost of petrol and diesel in Mumbai is roughly around Rs. 48 and Rs. 36, respectively. Let's consider the average fuel economy of the petrol car as 12 Kmpl, while that of the diesel version to be 25% higher at 15 Kmpl. Not considering the cost of spares and maintenance and other expenses, the operating cost per kilometer for the cars is Rs. 4 (petrol) and Rs. 2.4 (diesel), respectively. Thus, the diesel car will save you Rs. 1.6 per kilometer. So in order to justify the extra 1.2 Lakh, you paid upfront for the car, you will have to use the car for 120000/1.6 = 75,000 km to break even.

In other words, you will save on the operating cost, only if you use the car beyond 75,000 kilometers, else there are going to be no savings. Mind you, I have not taken into consideration the higher maintenance cost for diesel cars which will stretch the 75,000 km mark further.

To cite another example, this time from the hardware segment; let's go back to early 2006. The fastest graphics card back then was the Nvidia Geforce 7900GTX selling for roughly around 35K. The 7600GT back then was selling for almost 14K, it supported all the features that the 7900GTX did and was capable of handling most of games at playable frame rates. Today, the resale value for both is not much and neither support DirectX 10 (DX10). A Geforce 8800GT sells for around 14K today and is DX10 compliant.

Those who opted for the 7900GTX back then as a 4-year investment, spent 35K on it and won't be able to enjoy DX10 games today. On the contrary, those who bought the 7600GT back then and upgraded to an 8800GT now, did not miss on any of the DirectX 9 action over the past 2 years and now have a DX10 card that is clearly faster than the 7900GTX. All this at 20% lower cost. The same logic holds true for the future too.

Now, that's enough math for one day. The point I am trying to drive is that before you buy any piece of technology, you better have a good enough reason to buy that particular thing. Do look at the bigger picture and have a long-term plan in place, but don't try and plan too far ahead for a future that you cannot foresee.