Providing Walkmans in a world of smartphones

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Imagine for a moment what the world would be like if Steve Wozniak and Steve Jobs were more interested in real estate in San Francisco than in computers.

The couple founded the company we know today as Apple by selling Wozniak’s scientific calculator and Jobs’s Volkswagen van. This money was enough to launch Apple on the path that not only shipped the world’s personal computers, but the iPod and iPhone as well.

Steve Wozniak with Steve Jobs and one of the first Apple computers.Credit:Bloomberg

It was a huge, and ultimately successful, financial bet by the pair.

The benefits of that move in the mid-1970s can’t just be measured in Apple’s market capitalization (somewhere north of $ 2,000 billion) – the productivity gains are still being felt today.

If Wozniak and Jobs, rather than building and marketing a PC, had invested in real estate, they could have made enough money to be very comfortable. But you might still be listening to music on a Sony Walkman while you wait for your visual display terminal to warm up enough for you to use it as an electric typewriter.

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In economic terms, it’s the opportunity cost – what you give up to do something else. In Apple’s case, the chance to break into IT was (luckily) more enticing than a life in real estate.

It is becoming increasingly clear that as a country Australians are making the other choice.

Our tax system, our monetary policy settings, our tax settings, and even our TV shows all push us to invest money in real estate rather than in something that could be riskier but could generate huge gains in real estate. long term.

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