Why is it, to normal people (or to me at least) that financial terms seem to be so obscure and intimidating? Acronyms are everywhere. Just off the top of my head, and while my memory of excruciating corporate Board meetings hasn’t yet faded, may I list in no particular order, EBITDA, ROI, ROCE, POR, SKU, NSV, NNSV ….. and so on. Then there’s Cash Flow versus Free Cash Flow, I’ll talk gross margins but you’ll talk net (nett?), or net net (nett nett?) and how are you defining “profit” anyway? Even relatively simple terms, like does a “creditor” owe you money or is it the “debtor” that does, can make me question the fundamentals. I could go on, but already I’m losing the will to live.

The Depreciated Macbook Heading to ebay

The one concept that I liked, and used in my own finances, was depreciation. The way I used it was like this: I bought an Apple Macbook for £1,000 cash. I decided it would last me five years, so each month I “depreciated” it by direct debiting £20 a month into a savings account and forgetting about it. Five years later, I had accumulated the cash pile to buy a brand new Macbook (and I flogged the old one on ebay as a bonus).

It almost goes without saying that the trick to using positive depreciation is to have the cash to make the capital investment first. So saving money is the priority.

I could well have done with being educated this way instead of how I actually was – borrow the money and pay it off with a “Hire Purchase” agreement. As I write the term “Hire Purchase”, I’m struck by the sneaky wording. It actually sounds like quite a positive thing. Much better than “Stinking Debt Repayment” or something similar.

It took me the best part of thirty years to learn about the real difference between credit and debt. I think this is because that my first experience of Hire Purchase was a positive one. Without it, I would never have been able to buy my first racing bike, a Raleigh Shadow, purchased from Halfords when I was fifteen years old. It cost seventy five quid, a figure well beyond me and my folks at the time. It was with a sense of awe that I discovered Halfords would let me buy the bike “today” and pay it off later at the sum of £1.25 a week, which I earned delivering papers. It’s hard to describe how this option suddenly transformed my view of how people could afford things. “Debt” wasn’t one of the words that occurred to me. All I was focused on was the fact that I could have the bike now, right now, the object of my heart’s desire that had seemed an impossibility before.

In fact, thinking about it, there was a positive aspect to the debt – I took it without question that I must pay it off. This underlined to me that I would need to work and keep my job in order to pay back Halfords who I actually felt quite grateful to for giving me this option. I’d put the cart before the horse, of course, and had been encouraged to do it, but that’s not how I viewed it at the time.

I was also lucky in that I didn’t have much else to spend the money on at that age. I do remember that the weekly payments took the majority of my earnings and that I actually had to visit the Halfords shop every Saturday to make them. I had a little card that was filled in and signed by the shop assistant each week when I made a payment. (Ye Gods, even to me that sounds like Victorian Times compared to our computerised era. It was only the Seventies!)

Anyway, at least in those simpler days I had only that one financial acronym to deal with, “HP”, and I understood the deal. If only I could say the same with confidence today.

Keep a Journal

I once had a couple of sessions at work with a “life coach” although, being British, we pretended that wasn’t what he was, really. More like a mentor.

We chatted for a few hours about work-life balance, goal setting, self-development, continuous learning and all the usual suspects that people who have the luxury of being a bit self-obsessed are allowed to indulge in.

At the end of the session, he reached into his pocket and said, “You know, you should really keep a daily journal for yourself”, as he dug out a small Moleskin notebook. “You can jot down your thoughts and feelings in this – I find it quite therapeutic, and I wouldn’t be able to go a day without filling it in now”.

This daily journal is what we used to call a diary. Personally, I’d been filling one out for years, and was able to smuggly inform the coach, “Been there, am doing that”, but had to agree with his assessment. It is therapeutic, and I find it hard to start the day without first writing down something in my own.

My Psion 5

My Psion 5

The thing that moved me from thinking about keeping

a diary to actually doing so was technology. I bought a Psion 3 back in 1994 – it was then called a Personal Digital Assistant or PDA – and it enabled me to make entries into its word processor and save them to a disk. Better than that, you could password protect the files. I never looked back and I still think that the keyboard on the Psion 5, which I duly upgraded to, was a work of genius.

Unless you’re a celebrity* your diary is your own. I’m pretty certain mine would be fairly boring to any other reader but, as Mae West said, I keep it and it often helps to keep me. There’s a comfort in knowing that your life and thoughts flow in a certain way, and those that you see most often repeated are what life coaches would probably call your “values”.

Since 1994, technology has stormed ahead, and these days I keep my diary in “The Cloud”. Otherwise known as Google Docs, which doesn’t sound as sexy, but is pretty suited to my needs. The ability to store words, and maybe the odd picture, and access them from pretty much anywhere is all I need.

I’m sure there must be plenty of on-line applications that offer a more “diary like” experience but I can’t recommend them because I’ve not tried them. Google Docs gives me everything I need, although I sometimes worry about the profile that Google will be able to build of me when they finally come to govern the world. Much of my life since 1994 is on there.
If anyone has experience of a good on-line diary let me know. And, if you don’t keep one, I’d recommend you head to Google Docs and start today.

* I do enjoy reading “celebrity” diaries too. Some of my favourites are:

Michael Palin – I think he’s published three volumes now, and all of them are pretty entertaining.
Gyles Brandreth – yes, he’s a bit of a prat, but these diaries are really funny and at the same time totally enlightening about the media and political worlds.
Low Life – not a diary in the traditional sense, but an account of one man’s progression through his own days. One of the funniest and slightly odd books I’ve read (and I’ve read it twice).
Chris Mullen – forget Alastair Campbell, these are the best diaries of the Blair years by a mile.
Piers Morgan – A chronological account of Morgan’s decade as editor of the Daily Mirror. Given the man, and the inability of most of us to stick him, you won’t believe how incredibly enjoyable this book is.
Kenneth Williams – candid in the extreme, funny, bitchy and will make your toes curl.