Wednesday, April 30, 2008

Be a gadget freak without losing money

tags: gadgets, guide, tips, gadget freak's, secret
This entry is truncated. click the "read more" link below to read the entire article

Scan this article from top to bottom. Check out the pictures. Yep all those gadgets are mine or were once mine. Profusely excessive you might say. I would disagree. I spend a lot on gadgets but I’m not actually losing money. In fact it’s quite the opposite.
Here are some basic things that you should know about so you can get all the gadgets you without losing a lot of cash. The basic principle here is to try to keep the monetary value of all your gadgets, more or less, at a constant. Let’s say you have 200k worth of gadgets right now. If you keep those gadgets for 3 years, the value might go down to 80k or maybe even lower. But if instead of keeping them for that length of time, you convert them to cash before they depreciate and then convert the cash to gadgets again, you’ll always have close to 200k worth of items without infusing extra cash.

Read and learn…

Brand new and 2nd hand value: The price difference between brand new and 2nd hand units for certain items like ipods, can be relatively small. (There was a time when brand new ipod videos sold for 11500 and 2nd hand units sold for just 10k) while it can be pretty significant for certain items like minidv camcorders. As soon as it leaves the electronics shop, the minidv camcorder that you bought for 25k will only be worth 11k. Keep in mind that the instant you buy a gadget, it’s a already 2nd hand. So the value of that camcorder that you just bought isn’t 25k. It’s 11k. When computing the value of your gadgets, always use their 2nd hand value. Buying brand new always entails instant loss of value and this is not good if you’re trying to keep the monetary value of your gadgets at a constant. When deciding whether to get brand new or 2nd hand, ask yourself what you’re paying extra for and if it’s worth it

Depreciation rate: Most electronic gadgets tend to be sold at a huge premium when they’re first released. Prices would usually fall sharply after a few months as supply meets demand and as the hype dwindles. It would stabilize after a certain point and won’t drop significantly again ‘til an updated model gets released. Introduction of new models, either from the same manufacturer or from competing brands will likely trigger significant price drops. If you familiarize yourself with the release dates of new models and the depreciation rate of a particular item, you can work out a strategy on when to buy and when to sell. It’s best to buy when the price plateaus and it’s best to sell before the next significant price drop

Depreciation threshold: There’s a certain point at which some gadgets, more or less, stop depreciating. For the last few years, the depreciation threshold for minidv camcorders has been at around 8-10k; for branded digital cameras, it’s at around 4k, around 6k for slim digicams; for entry level digital SLR cameras, it’s around 17-20k.
If you buy a 2nd hand DSLR camera worth 20k, you won’t have to worry that it’ll lose 50% of its value within the next few years. You can keep your dslr for 3 years and it’s unlikely that price will go much lower than 16k. it definitely won’t depreciate to the point where it’s about the same price as a regular point and shoot camera or a regular prosumer camera. If you don’t plan to buy and resell your items too often, it’s best to buy items that are near the depreciation threshold already. Of course this threshold won’t remain constant forever but prices rarely drop sharply after they’ve hit the threshold

Not all electronic gadgets have a Depreciation threshold. Most Celphones will continue to depreciate ‘til they’re worth practically nothing. In markets where technology evolves very fast and new models get released very quickly, prices drop like rocks.
Video cards are some of the fastest depreciating items you can buy. In a period of 2 years, the price of a video card could drop from 30k to 5k -It’s a bottomless pit so it’s highly inadvisable to hold on to such items for a long time.
Brand new or 2nd hand
If you’re buying brand new gadgets, what you’re mostly paying for is the warranty. Most electronic gadgets have very few mechanical parts and therefore they don’t wear down as predictably as cars or powertools do. there’s no guarantee that a brand new ipod will last longer than one that’s been used for a year already. It could last for 20 years or just 2. There’s just no way of knowing. Also, warranties for most gadgets is only 1yr and that usually doesn’t cover physical damages caused by mishandling. Few electronic gadgets fail in that time period so 1yr warranties are practically useless in my opinion. Additionally, the price difference between brand new and 2nd hand units for certain items can be so great that it could cover the price of any major repair 3 times over. Always weigh what advantages you’ll get and whether those advantages are worth the price difference or not
To minimize the amount of money you’ll lose, you’ll have to buy your gadgets 2nd hand. If you plan to follow my strategy, you shouldn’t be keeping any gadget for more than a year anyway so longevity shouldn’t be too much of an issue.
Buying 2nd hand: Buying 2nd hand units always entails a certain amount of risk but if you know what to watch out for, you can minimize the risk to an acceptable level. Most trading sites have a feedback system in which you could check the past deals of every member and how they all went. Always check the ratings of a seller first. ]The best forms of transactions are those where you get to meet the seller and personally test the unit. Safest mode of payment is through bank account since it’s traceable.
Whenever I do long distance transactions where I don’t get to actually see the unit, I do a background check on the seller. I’d ask for personal details. his blog url, friendster profile etc (ask him to send you a message through friendster to confirm that it really is his profile), I’d try to converse with him and check if there are inconsistencies. Weigh what he has to lose and what he has to gain by duping you. Detecting scammers requires experience and involves a lot of gut feel. I strongly suggest that you don’t do long distance transactions until you’ve gained enough experience already.

These are just general pointers. There is no universal formula that you can use for all gadgets. The key to being a successful gadget freak is knowing the product and the market. Do research. Check out trading sites like ebay or bidshot. Always be updated on the prices of items.

Once you get the hang of it, you may find yourself buying expensive stuff on a whim, stuff that you don’t really need or may not even actually want that badly… Once you’ve mastered the art of being a successful gadget freak, life becomes a lot more interesting.
Expect more detailed guides for specific gadgets from me in the future.


van said...

I'm salivating from gadgets-envy.

jaywalker said...

haha. just follow my tips and pretty soon you'll have an extensive collection as well