In the 1980s my first computer was a little Sinclair which cost around pounds 100. I was so thrilled with my new toy and the fact that I could actually program it that within two months I had gone to my bank and asked for a pounds 4,000 loan to buy a bigger and better machine.
Before long I was totally obsessed with writing programs. I started buying all sorts of add-ons so that I could do colour graphics and pretty soon I was sufficiently good that no one could understand what I was doing.
At that point I decided to become a video director and put all my snazzy software ideas to good use. I was very fortunate in that I became successful very quickly. The more successful I became, the more money 1 was paid, and soon it was time to expand my working environment.
I bought more computers, more video machines, more sound equipment and so on. I was very comfortably off, the work was coming in thick and fast, and my reputation was getting better and better.
The total cost of the equipment was around pounds 200,000. I paid about a third of it from my profits and the rest was raised by increasing my mortgage and taking out bank loans and overdrafts.
But suddenly, in the early Nineties - almost as if somebody had switched off the lights - interest rates went through the roof and simultaneously my work just evaporated.
To cap it all, the wonderful working environment which I had created began to go wrong. The machines needed servicing; they became less and less functional as time went on, and by about 1994 I found myself with a studio full of obsolete equipment and a lot of heavy duty loans.
My accountant had told me I would get 10 per cent depreciation on capital expenditure over the year, but in fact both the Inland Revenue and accountant knew something I didn't, which was that all of that stuff goes out of date or loses value dramatically.
My broadcast video equipment actually depreciated by 50 per cent a year. I had a vision mixer which cost pounds 16,000 and an edit controller which cost pounds 12,000, but when I went along to second-hand equipment dealers they just laughed at me. "You can't be serious," said one. "Nobody wants that sort of stuff; you can't even sell it in Iran or Algeria."
It will take me until the year 2003 to pay for equipment which is now worse than useless, because I can't even give it away.
The first lesson to learn is that you should never buy what is known as a "turn-key" system, in other words, a system which only has one function: a vision mixer which only mixes vision images, or a sound console which only mixes sound.
Today, just one capable computer with the correct software can replace all of that dedicated hardware. So whenever I have to invest in more equipment, I make sure it can do a range of tasks.
In those days, there weren't so many choices. Everyone was terribly impressed when they saw my studio in the late Eighties, but if I had had more sense I would have hired its equipment rather than bought it.
It was all right to borrow as much as I liked on my rising income, but as soon as my income fell and my repayments rose dramatically, I was in big trouble. My mortgage alone had risen to pounds 2,700 a month, and for two people this is a hell of a lot of money to find, but on top of that I was paying pounds 875 a month for a business loan.
The upshot is that although interest rates eventually came down and my mortgage, dropped to pounds 1,700 a month, the only sensible thing to do was to sell the house in London and buy a flat elsewhere.
If I'd been sensible and sunk my money into the house, I would have had a much greater degree of security. On the other hand, that would have been boring. I can't honestly say I have any regrets, but I certainly wouldn't advise anyone else to make the same mistakes.Reuse content