I can't afford to... - so what the hell does it mean? As an economist I should understand and clearly define the meaning of such predication, yet I could struggle and all attempts to do it could go in vain. Affordability is probably one of the most ambiguous concepts in economics, containing enough imprecision to leave its users much room for (mis)interpretations.
Personally, I would distniguish three main concepts of it. If you can afford to buy something, you:
1) have enough money not only to purchase the item you want to have but also don't need to cut back on other expenditures - a very conservative approach, I'm kind of attracted by,
2) have enough money to spend it on a specific item - conservative approach, the one I'm guided by while managing my personal finances,
3) expect to have enough money to service the debt you run up to buy what you want and in the meantime don't have to tighten the belt while repaying the loan - a contemporary approach, not really what I embrace, yet not what I reject,
4) expect to have money to pay back the loan you take out to finance you dreams, but struggle to make ends meet - a subprime approach, what I consider a regular folly and signifcant threat to financial stability on micro- and macroeconomic levels.
While approaches no. 2 and 3 prevail, the difference between the two can be illustrated by the language of accounting. If you have cash at hand to buy something, I would call it a balance-sheet approach, whereas calculating what share of your monthly income can be spent on debt service can be called a cash-flow approach. Banks, when they analyse their customers' creditworthiness, check, whether the current cash flows are high enough to cover the debt service expenses. This method is a huge simplification, as it assumes that:
1) a borrower doesn't lose their source of income (downcase scenario) or
2) a borrower doesn't receive an additional income (upcase scenario).
Most people around lean towards the cash-flow approach. It's not uncommon that a human being is impatient and would like to have its needs met immediately*, without waiting and putting money aside and often without initial sacrifices. Such approach squares also with life-time income theory, yet as every model is based on several assumptions, including no misfortune is going to crop up. The model works properly as long as your career develops in a natural course (i.e. at startpoint you earn little and then your earnings rise until you retire), no illness, accident or death hits you. Well, there is no perfect model in economics, each model has its limitations, and inputs will always determine outputs.
My personal preference of the balance-sheet approach stems from the insecurity. I hope what future holds for me is only bright and do my best to ensure it, but since I've seen fellow good workers laid off out of the blue in an inhuman way, I don't want to take a risk of having a debt burden and being jobless at the same time.
* Example I heard at work in April 2011, one of my colleagues saying about her friends: They have a flat, but would like to swap it for a bigger one, but unfortunately their outstanding mortgage debt in CHF is higher than the market value of their current flat - my jaw dropped open, how about yours???
Another example - recently I changed my commuting routes and leave the car at a P&R car park closer to home, this lets me save some 3 PLN each day. But I did it not because I can't afford to buy petrol - I could even easily drive directly to the office every day and spend on it some 200 PLN more a month. I clamped down on driving because I consider it a waste of money which could be put it aside and utilised in a better way in the future.
Next week: The Iron Lady - film review (watched it, but had too little time to put all my thought into the correct order)
I hatched the idea of writing this in late 2009, after seeing on my two friends' respectively: facebook profile and website their "about me" descriptions. One described her interests as "pure hedonism" (hedonizm w czystej postaci, the other introduced herself as "consummate hedonist" (wytrawna hedonistka. I read it with a bit of disdain, pulled a silly face and decided that the next day I would ask my closest schoolmates how they would react to it.
My pristine reaction was "there's nothing to boast about". Pursuit of pleasure is not evil itself, but setting it as an overriding goal in life smacked of being totally out of place. Then I read the entry in wikipedia to learn more about this so-called "school of thoughts", the read dispelled some of my doubts, but the bad aftertaste remained - maybe I was biased. But then it turned out my friends' opinions generally squared with mine. Actually they didn't find it as repulsive as I did, but were all far cry from embracing the pleasure-oriented stance.
As open-minded and tolerant people, we are aware and accept that people have different definitions of happiness and different hierarchies of values and they have a right to arrange their lives in a way they choose. Different people mean different objectives in life. For some the most important things are: family, friends, work, career, money, material goods, travels, education, sport, hobby, entertainment, fun, sacrifice to other people, etc., so why not pleasure? The take on how one assesses hedonism probably hinges upon the definition of the term. What occured to me, at first glance, was that pursuit of pleasure, the most important goal in life for a hedonist, must be subordinated to other values, including feelings of fellow people. The "at all cost" pursuit of pleasure probably whipped up my reject of the concept. My first association was that seeking happiness must be done at the expense of other people. I see two reasons for such reaction: blissful ignorance (mother of prejudices, misunderstandings and egregious errors) and my perception of the two women who’d declared themselves hedonists and whose behaviour usually involved caring little about others.
The wikipedia article says: a hedonist strives to maximize net pleasure (pleasure minus pain). Well, I'd had it in mind before and this probably will always prevent me from embracing hedonism. The pain, not physical, but primarily emotional, is an indispensable element of a human life. If you've never experienced a pain tearing you apart, you can't call yourself a human. You simply can't always avoid pain. Suffering adds you experience, toughens you up, makes you wiser, allows you to sympathise with the worse-off. This puts me further away from the embrace and brings me closer to reject.
So is the hedonism about self-centredness then? Maybe if it's rational to take care of one's own interests firstly, the answer is 'yes'? Is there one good answer? Are there still more questions than answers? I don't wish to condemn the dissenters, but it seems the key question is whether somebody is able to strike a trade-off between egoism and altruism, with more emphasis on the latter.
The whole post is apparently one huge ramble, may it charm consist in the confusing disorder of thoughts...
Just a few sentences not to let pass the third anniversary of my blogging pass unnoticed. Few people manage to run the blog for so long, but knowing I hardly ever post more often than once a week, I can't consider this a success. Of course I'll keep it up, but the inspiration and passion I used to have in 2009 or 2010 are long gone. It's rather a call of duty that prompts to update the blog (usually) each Sunday, not the desire to write I had prior to the start of my professional career in summer 2010. The blog has seen a shift from subject matters mentioned in its title to more personal observations and I have serious doubts whether this is the right direction...
My big thanks for the faithful readers who keep visiting the site, despite declining quality of its content. Please don't run out of patience and if you still like PES, gee me up from time to time.
And I'll try to refrain from sharing the state of my mind here. Will do it better
I tied myself with wire
to let the horses roam free
Playing with the fire
till the fire played with me
(...)
Two souls to smart to be
in the realm of certainty
(...)
Every eye looking every other way
Counting down till the pain would stop
A sudden attack of winter is probably the best incentive for some people to tidy up their garages and find there enough room to park their vehicles. The rest, who don’t have garages, use their garages as lumber-rooms or have too small garages to keep their cars, have their vehicles put to the test by the cold weather. Below is a coverage of how my car, almost nine-year-old Renault Megane (runs on petrol), kept for the first winter outside a garage, has borne up the recent big freeze.
Friday, 27 January 2012
06:50 / -13C
Engine starts obediently, something near the clutch squeaks when I pull out or change gears. The unpleasant noise ceases when engine warms up.
17:50 / -11C
Fires up like a dream, oil in the gearbox is a bit thick.
Saturday, 28 January 2012
Night-time low: -13C
08:20 / -12C
Engine starts without enthusiasm, but also without hesitation, then it warms up and defrosts windscreen and rear screen while I scrape the hard rime off side windows. Clutch again is a bit frozen up.
08:50 / -12C
Fires up like a dream, off for a 12 kilometres journey, everything warms up and runs very smoothly.
10:45 / -10C
At the car park outside my grandparents’ block I spot a guy starting his Skoda Octavia with diesel engine. The owner has a rough ride, the third attempt is successful. My engine hasn’t run cold during an hour-long sitting.
14:10 / -8C
While on my walk I hear two other cars wheezing… Note temperature hasn’t dropped below –15C and problems have begun for many carefree drivers.
17:15 / -10C
No sign of six hours of sitting, cranks up like in summer…
21:15 / -12C
Again exemplary start, later the car left for a cold night and morning…
Sunday, 29 January 2012
Night-time low: -14C
09:50 / -13C
Just like yesterday, everything works properly. No sign of winter on car’s bodywork, so after a minute of heating the engine up I set off to Media Markt Okęcie. I cover altogether 40 kilometres, therein first 7 before the engine reaches its working temperature. A longer run at the steady speed with radio and heating turned off does good to the battery.
11:30 / -10C
And now the vehicle left for 19 hours of sitting, including twelve hours in double-digit frost, expected to hit even –18C.
Monday, 30 January 2012
Night-time low: -16C
06:35 / -16C
Okay, this might be boring, the car cranks up obediently. My colleagues say there’s nothing to be excited about, each well-maintained, petrol-fuelled car, with properly charged battery, will start without problems in temperature above –30C. I somehow don’t feel like checking it, but nothing indicates it could pack up…
18:20 / -12C
Fires up as if it was summer, unfortunately the bottom part of windscreen froze over inside and the car defrost itself very slowly. OK, as long as it doesn’t impede driving…
Tuesday, 31 January 2012
Night-time low: -17C
06:40 / -17C
No changes since yesterday. It should keep running well as long as it’s driven every day, albeit it has to be said exposure to frost is not what vehicles like the most. Natural selection on the roads – I put down lighter traffic to the fact some cars failed the cold weather test
17:45 / -13C
Engine warms up quite quickly – wondering why…
Wednesday, 1 February 2012
Night-time low: -20C
06:35 / -20C
It has to be said for over 8 years in my family Megane had never been used in temperature lower than –19C.
Another good start and another rough ride with frosty windows. Hard rime is very hard to scrape, plus fingers, even in gloves are freezing. The traffic is sparse and 90% of cars on the road have driven out of garages (no sign of sitting in the cold), so I go by car to the office…
17:50 / -15C
The car sat for 10 hours in the sun and an unpleasant surprise inside – the windscreen has frozen over… inside. It’s not totally frozen, so I pull out and begin the crawl in a traffic jam towards Plac Zawiszy (less than one kilometre out of my 18 kilometre journey and covering it takes 15 minutes (vs. 45 minutes for remaining 17 kilometres), by the time I reach it, the car defrosts itself. I was a bit stressed out by goings-on at work and frozen screen and didn’t make out whether the engine was hesitant to start…
Thursday, 2 February 2012
Night-time low: -22C
06:40 / -22C
Oil in the gearbox is very thick, but the battery is doing a great job. Kicks in immediately despite harsh frost. Number of cars on the roads that have stayed the night in the harsh frost is lower than yesterday. Warsaw is full of cars left where they packed up.
17:05 / -18C
I leave the office at time and again find the windscreen frozen inside, but the layer of frost is not as thick as yesterday. After warming the engine up for half a minute I pull out, all frozen elements creak, windscreen is being defrosted while moving in a snarled-up traffic. A very frosty night ahead!
Friday, 3 February 2012
Night-time low: -24C
06:35 / -24C
Minus twenty four – no such word as “fun”. I barely can turn the gear from rear to neutral, then press the start button, hear a short wheezing and the engine cranks up!
Then ensues a long scrape during which my fingers are in a state near frostbite. Than it all looks pretty surreal. Radiation fog lingers, roads are swathed in clouds of fumes from engines of sparse cars. This looks like an icy hell, but Megane bravely carries me to work. Traffic is holiday-time-like – very light. Most cars sitting outside have refused to start… Mine works, but LCD displays go bonkers, when I try to check if the radio works, I learn it doesn’t, the computer indicates current consumption of petrol on cold engine is 40 litres per 100 kilometres…
17:15 / -17C
Well, not a surprise that it starts, but I wonder where’s the boundary of the machinery (battery, starter, engine, oil…). Would it start at –30C?
Saturday, 4 February 2012
Night-time low: -22C
08:40 / -21C
Oil is thicker than yesterday, or maybe it just seems to be just because the car has been sitting for two hours longer. Sun melts some of the frost, so scraping takes shorter and I manage to pull out faster. Two first kilometres are disastrous… I’ve had enough of grappling with barely movable gear lever…
09:30 / -20C
Ok, now it starts briskly… At my father’s insistence I turn the radio on; it seems to work when it’s above –20C outside… When I arrive at my grandparents I see another comedy titled “Using wires to start a car”.
10:40 / -19C
Off to home, engine within an hour of sitting has not run cold, then the car is left for some 22 hours of sitting in the cold.
Sunday, 5 February 2012
Night-time low: -19C
11:00 / -15C
The car sat for 24 hours in temperature below –15C and kicks in without hesitation. There’s no frost on windows and I can easily set it in motion without warming the engine up. Oil in the gearbox is not very thick. To the petrol station and then for a 10-kilometre ride to charge up the battery. If the worst is over and the car withstood the nadir of cold snap, it doesn’t mean precautions don’t have to be taken.
Monday, 6 February 2012
Night-time low: -20C
06:40 / -20C
Another brisk start after 20 hours of sitting in the frost. The car’s got used to the frost, but it only puts up with low temperatures. I’m sick of thick oil in the gearbox and several noises it gives off before it warms up.
17:45 / -15C
Traffic on ul. Puławska is oddly sparse. Longing for single-digit frost…
Tuesday, 7 February 2012
Night-time low: -14C
06:45 / -13C
Dammit, oil in the gearbox is not really thick, only falling snow slightly impedes driving
17:55 / -10C
Hey, I haven’t seen such a brisk cold start for a week. We’re returning to normal driving!
Wednesday, 8 February 2012
Night-time low: -12C
Is there any point in writing???
Until today, each morning was colder, with –19C hitting today. The engine has always cranked up impeccably. But today I again saw some cars whose owners made the most of the weekend to start them with wires and electric current borrowed from another vehicle.
So why some cars don’t cause their owners any troubles, while other pack up. My take on the issue is that not the car, but its owner (or user) is to blame… Maybe the content below is belated, but I prepared some advice for carefree drivers…
1. If your car runs on petrol, you’re some 10 degrees ahead. Diesel engines need more energy from the battery to be started, but beware – this doesn’t exempt you from taking care of your vehicle.
2. Good battery is a crucial when temperatures drop really low – check it before winter comes, if necessary charge it up or buy a new one. Prudent drivers do it in the autumn (I changed the battery in November), carefree wrangle with a dead one while standing in double-digit frost.
3. Other devices must work properly – nothing’s going to help your good battery, if alternator doesn’t charge it properly, motor starter is worn-down, ignition and injection systems are faulty, or fuel is tainted with water. When it’s below minus twenty any weaker link in the chain might immobilise your car…
4. Avoid short runs and starting the engine many times a day – during short trips shortage of energy used to start the engine is not replenished by alternator. Also crawling in traffic jams doesn’t do good as engine revolutions are low and little energy is produced and goes to battery.
5. Drive every day even if you don’t have to – the big freeze set me back some extra 30 zlotys spent on petrol – on account of driving longer distance directly to work (which in fact is a waste of money, but to my surprise not time!) and driving on one Sunday when I didn’t need to, but it spared me potential troubles. A well-maintained car will sit overnight in –25C and start, but adding to it one more day and a second night might be a risky step.
6. Hold back from using energy-consuming devices – radio and CD are off, heating is not turned up, windscreen and rear-screen heating are in use only when necessary. Energy produced by the alternator should charge the battery (and it’s the last receiver of energy, so it receives only the surplus of the produced electricity), whose capacity in –20C is by some 50% lower and which needs to give more energy to crank up an iced engine…
The frosty period is coming to an end – this means denser traffic…
There are moments when it never hurts to look back on one’s old thoughts and review their accuracy with hindsight. A year ago I, a half-baked graduate, just in the eve of starting my first permanent job, set out to summarise ups and downs of leaving university and stepping into the corporate world. Time to quote my thoughts from February 2011 and confront them with my views today.
I WILL MISS:
1. Day-to-day contact with peers. Truth be told my colleagues will be a bit or much older than me. From my past experience I know I can get along with older colleagues very well, but they are a sort of a different breed, they have different problems, pastime activities, interests, priorities in life, usually they have a different point of view because they have their own families and obligations it entails.
I somehow miss it less than I expected. I’ve always found it easy to get along with older people and so I do at work, but there’s a noticeable gap between us – most of them have spouses and children, hence have different duties and problems. I haven’t experienced their daily bread, they long for carefree period of youth in which I, in their opinion, still am.
2. Clever, awe-inspiring lecturers, just to name a few:
dr Bogusław Czarny, who taught me basic micro- and macroeconomics, inspired to think independently, form my own opinions and who stressed the importance of the overriding rule in economics, that an assertion is true when it cannot be disproved, not when it can be proved,
prof. Marek Garbicz, for his breathtaking lectures, sense of humour and open mind,
prof. Maria Podgórska, for her patience, consistency and the fact she did not confine just to teach econometrics and mathematics in finance and insurance, but also wanted to instil in us integrity and made us aware how important in life it was,
mgr Sławomira Rajkowska, my best German teacher ever, unfortunately she stood in for our lecturer just for one term, but the progress I made (without much effort) was unbelievable. Had my Deutsch been that good today...
mgr Aneta Piwko, my best English teacher ever. If all teachers had such excellent command of English, passion and drive to teach, Germans would not stack up against Poles in terms of English skills.
prof. Sławiński... Here words are very unnecessary. Who experienced the pleasure of attending his lectures knows what I mean. The rest may only regret.
dr Piotr Mielus, the supervisor of my MA thesis and an outstanding practitioner.
True, but on the other hand, I met several awe-inspiring people where I work, and, like at SGH, many mediocre individuals (who are in a minority). I should kick myself for not attending open lectures at my school, or not visiting some of my favourite scholars during their office hours. Yet still there time to make up…
3. Casual clothes. From next week will fit for weekends, holidays and cult dress-down Fridays. I actually like formal outfits so this one should be taken with a pinch of salt.
Well, I’m still at the age, when I don’t mind wearing a suit and tie (business casual dress code Mon – Thu), but dress code policy is much more flexible than I expected – if I don’t have any important meeting there’s no reason why I couldn’t wear jeans, casual shirt, or a jumper if I feel like.
4. Commuting in non-peak hours. Lovely it was to get from or to Warsaw within fifty minutes in the middle of the day or in the evening when streets were already unclogged. My new recipe for avoiding traffic jams will be trains, so the journey between home and the office should take around an hour.
In July I swapped trains for a car, since then I’ve used public transport within the boundaries of Warsaw only (P&R to work and back + getting about town). I depart for work in early rush hours when traffic is snarled-up, but not stationary. I return to P&R in late rush-hours or after it. Carrying one’s arse in a vehicle is convenient, but expensive…
5. Job fairs, event, meeting famous people who visited SGH and other events. First two and a half years abounded in such events. Later the crisis came, companies cut their promotion budgets and I ran out of disposable pens.
At work there are different events during which I can pick up other gadgets. And I slightly miss these small talks with representatives of employers on potential internships. These days internships are beyond the scope of my career interests and provided no big wipe-out (i.e. lay-offs) strikes out of the blue, I should hold down the job.
6. Privileges. Not that soon. I will pick up my diploma some three months after the final MA exam, so I until then will I make the most of my ticket concession and other measurable benefits of being a student. The new world will compensate me for this by giving perks.
I lost my privileges on the last day of June 2011. From then I’ve had to pay the full fare for my travelcard, but on the other hard I have a health-care package, swimming pool entry card and reimbursement of glasses expenses.
7. Unfettered speculation on stock exchange. From now I will not be able to do a real-time trading plus I will have several trading restrictions. This does not mean I will pull back from the stock market at all; the speculator will become a mid-term investor.
I have to keep away from some stocks and I’m obliged to submit weekly report on my trading activity. These days all those limitations don’t hurt me at all, I don’t understand where and why markets are heading, so I trade very cautiously, or not trade at all.
I WILL NOT MISS:
1. The overwhelming mess, bad communication between authorities and students and general disinformation.
Replace “authorities” with “superiors” and “students” with “subordinates”, and the sentence stays true!
2. Ignorance and laziness of lecturers. I do not even wish to comment. The list of admired lecturers was short. The list of big let-downs from the whole course of my studies would be much longer...
The problem of ignorance is far less appalling, actually people there are well-educated and reservations concerning their expertise are rather sparse. Plus they are ready to lend a helping hand and share their experience, if I’m in need.
3. Workings of the student office (dziekanat), its surly personnel, quaint decisions (deleting completed courses from track record of studies, informing me about my Bachelor's exam the day before in the evening)...
Thank God I’ve finished school! But a private corporation with head office in the fatherland of capitalism has its own set of absurdities, equally enervating.
4. To boot bad organisation, doing everything at eleventh hour...
This has not sunk into oblivion, just manifests itself in a different way. Closing deal at eleventh hour is not infrequent, being assigned tasks with tight deadlines is not uncommon, but it’s typical for the corporate world and at least if the job is done correctly, it’s appreciated.
5. Appalling use of English, which was ridiculed on this blog repeatedly.
At the bank virtually everyone uses English and everyone does it as good as they can, still too often with putting too little emphasis on quality. People from London or from the US have got accustomed to us mangling English. I’ve been reproved a few times for using too difficult (for native speakers) vocabulary, but no one’s ever told me off for polishing up a piece written in not-up-to-the-standard English.
6. Broken down central heating when outside it was -15C or unopenable windows and lack of curtains or blinds when outside temperature hit +30C
It’s been kind of dreadfully cold over the last week and temperature in my office was around +19C, barely above the threshold of +18C, allowing employees to refuse to work. But aircon was doing well in summer.
7. Lectures at 19:00 for day-time students (prevalent, alas).
There were a few incidences of working later than until 7 p.m. over that year, with record-late knock-off at quarter to nine in the evening, but if you think anyone at the top cares that it’s after 5 p.m. and it should be your private time, you’re wrong.
Immersing in the corporate world will not only mean I will be self-supporting, but also will bring new challenges and real learning opportunities. In the coming months I expect to work harder and learn more than within four and a half years of my studies.
Here I wasn’t wrong.
Hitherto I have not observed any symptoms of depresja magisterska, (graduates afflicted with this malady are down in the dumps because the carefree period of studies is drawing to a close and they are in for forty years of work), but the worst might be still to come.
There have been ups and downs over that year, but all in all I don’t miss school. Somewhere deep down I feel the clock is ticking, years are passing by (about to turn 25 in ten months) and self-fulfilment should lie above all outside work, if for somebody it also lies within it, they must be very happy.
Deny, distract, dilute
-
Here's my assessment of the current 'drone flap'.
Sometime in mid-November, craft of non-human origins began showing up over
military bases in the UK an...
