I wrote this for the SMH "Heckler" column, but it seems that it will not be published there.

OK, if there’s one thing that annoys me more than anything, it’s this: discounted cash flow. Well, not exactly that, but the way people do not understand it. No, that’s not right either. Ah, I have it. What annoys me is that people do not realise that they do not understand discounted cash flow.

“Live with it,” I hear you mutter, unsympathetically. But that’s the problem. I do have to live with it. I wince every time I hear someone suggest that we all install solar panels on our roofs, as the Mayor of Waverley did the other day. I shake my head when people get their cars converted to LPG, but only use the vehicles for shopping and taking the kids to school. I bite my tongue when a neighbour tells me they’re ripping out their perfectly good hot water system and replacing it with a solar one. And when a friend tries to tell me how much money she’s going to save by installing a rainwater tank... words fail me.

“Why is it so hard to explain?” I ask myself. It usually starts off with no problem “Which would you prefer to have in ten years time; more money, or less money?” If I ever get the answer “less money” I’ll call in the guys with the straight jackets, but it hasn't happened yet. Then I mention interest rates, and their interest rate rapidly wanes. I can tell that their thoughts have drifted off into a reverie about how much money they’re saving. Gritting my teeth, I carry on, until I get to the punch line. Of course, it wasn’t meant to be a joke, but it might as well have been. “Why are you laughing” I ask. “Oh, because that can’t be right” they say.

cont....

...cont

But it is right. Discounted cash flow is the reason our base load power stations run on coal, but peak load power stations run on other fuels. It’s the reason we do not have a high-speed railway running between Melbourne and Sydney. It’s also the reason no sane person puts photovoltaic panels on their roof, converts their low usage car to LPG, replaces a working hot-water system with solar, or, indeed, installs a rainwater tank in the expectation of saving money.

Or at least, it would be reason no sane person did those things, if only they realised that they do not understand discounted cash flow. I wish I’d never heard of it, now. Then I could happily join the others in their expenditure on all these things, with the happy delusion that I was saving money, and being totally oblivious of the cruel truth.

I’ll climb back into my hole now. I have some beans that need counting.

Huh ?? ?? (:>()

Exactly.

Well....

If thought I was bamboozled before, now I know I am.

And flummoxed as well!!

I wonder why SMH "Heckler" did not run your article. It could be that they couldn't understand the damn thing. "Please explain"