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844 posts

Ultimate Geek
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  Reply # 382705 21-Sep-2010 14:50 Send private message

bazzer:
Handle9:
bazzer:
Handle9: Personally I'd put the sweet spot at around 4 years.

Based on what?  As I pointed out earlier in the thread, financially you're better off after 3 years (assuming 6% interest).  Under the same assumption, 4 years of $15 works out to about $640 in today's money (compared to an extra $500 cost for the "buy" option).

You'd need to be making 20% interest on your money for the sweet spot to be around 4 years.  Actually, maybe that isn't so far fetched if you also have credit card debt you could clear instead.


Based on that you could loose your job, crash your car etc etc etc and have to give up Sky which could mean that your $699 is a sunk cost, which you get no benefit out of.

Time value of money calculations are all very well but they don't take into account possible change of circumstances.

To me flexibility is worth an extra couple of hundred dollars over 4 years. Obviously if you're in a very stable situation where you're sure you won't be giving up Sky then it's a different story. For us mere mortgage slaves however...

I just didn't know where you got the 4 years from?  Your idea is perfectly fine, sure you may lseo your job etc.  Why would the sweet spot be 4 years?  That doesn't make any sense.



If I was pretty sure I was going to keep sky for more than 4 years continuously then I'd pay the up front cost. 4 years is approx 3 years payback + 1 year safety factor to allow for risk. If you have a higher threshold for risk then you may want to allow less than that.

If I thought that there was a possibility that my circumstances change over that period would change then I'd rent. 

It makes sense to me. It may not make sense to you but I can't really help that.

922 posts

Ultimate Geek
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  Reply # 382729 21-Sep-2010 15:28 Send private message

Handle9:


If I was pretty sure I was going to keep sky for more than 4 years continuously then I'd pay the up front cost. 4 years is approx 3 years payback + 1 year safety factor to allow for risk. If you have a higher threshold for risk then you may want to allow less than that.

If I thought that there was a possibility that my circumstances change over that period would change then I'd rent. 

It makes sense to me. It may not make sense to you but I can't really help that.


You'd only have to be sure you're keeping it for the break-even timeframe (i.e. just over three years). Even if you lose your job at exactly the break-even point and have to give it up, you've not paid a single cent more at that stage than you would have done if you'd chosen the rent option. You don't need a 1-year "safety factor" for it to make financial sense to pay the one-off fee.

1163 posts

Uber Geek


  Reply # 382738 21-Sep-2010 15:44

Sky needs some competition. Wish the gov unbundled them too. I can't think of any other company where you buy the PVR for $500, but you never actually own it.

844 posts

Ultimate Geek
+1 received by user: 146

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  Reply # 382749 21-Sep-2010 16:05 Send private message

steve98:
Handle9:


If I was pretty sure I was going to keep sky for more than 4 years continuously then I'd pay the up front cost. 4 years is approx 3 years payback + 1 year safety factor to allow for risk. If you have a higher threshold for risk then you may want to allow less than that.

If I thought that there was a possibility that my circumstances change over that period would change then I'd rent. 

It makes sense to me. It may not make sense to you but I can't really help that.


You'd only have to be sure you're keeping it for the break-even timeframe (i.e. just over three years). Even if you lose your job at exactly the break-even point and have to give it up, you've not paid a single cent more at that stage than you would have done if you'd chosen the rent option. You don't need a 1-year "safety factor" for it to make financial sense to pay the one-off fee.


And if you lose your job/health next month and have to give up Sky then you lose in a big way. As I said if you value risk in a different way then you could allow for less. This is what made sense to me when I got MySky a couple of years ago.

My circumstances did change (we bought a bigger house with a much bigger mortgage) and I got rid of Sky. Worked for me. It all comes down to how you choose to price risk/flexibilty.

1163 posts

Uber Geek


  Reply # 382754 21-Sep-2010 16:12

Handle9:
steve98:
Handle9:


If I was pretty sure I was going to keep sky for more than 4 years continuously then I'd pay the up front cost. 4 years is approx 3 years payback + 1 year safety factor to allow for risk. If you have a higher threshold for risk then you may want to allow less than that.

If I thought that there was a possibility that my circumstances change over that period would change then I'd rent. 

It makes sense to me. It may not make sense to you but I can't really help that.


You'd only have to be sure you're keeping it for the break-even timeframe (i.e. just over three years). Even if you lose your job at exactly the break-even point and have to give it up, you've not paid a single cent more at that stage than you would have done if you'd chosen the rent option. You don't need a 1-year "safety factor" for it to make financial sense to pay the one-off fee.


And if you lose your job/health next month and have to give up Sky then you lose in a big way. As I said if you value risk in a different way then you could allow for less. This is what made sense to me when I got MySky a couple of years ago.


My circumstances did change (we bought a bigger house with a much bigger mortgage) and I got rid of Sky. Worked for me. It all comes down to how you choose to price risk/flexibilty.


 

I've got freeview, and find that there is more than enough on there. The only things that I would miss are the live sports, but you have to be on a premium plan to get those channels anyway. Just go around to the mates or a pub to watch those if the need arises. Sky is definately something that can be lived without. Especially as you can now buy a freeview Tivo for just $360.

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