Your computer can be thought of as an orchestra, moving data through its various components and performing calculations. Like an orchestra, all the parts have to work together, and in some cases, the computer's performance is set by the slowest performing part. What most computer users call "computer performance" is computer responsiveness -- the noticeable delay between your inputs and what you see happening on the screen. A number of hardware factors contribute to responsiveness.
RAM Quantity and Speed
If you're trying to speed up your computer, you can never go wrong by installing more RAM. With the advent of 64-bit processors, computers can now utilize more than four gigabytes of RAM, and RAM has fallen in price considerably. What has changed is that computer software, at least for early 2014, hasn't grown faster than available RAM in default configurations. Unless you're doing scientific computing, or manipulating video for editing, four to eight gigabytes of RAM will suffice for most uses. For best results, install the fastest memory supported by your motherboard.
Processor Speeds and Cores
Processor speed is another benchmark that’s changed over time. Due to manufacturing limitations and voltage regulation, most CPUs won't exceed 3.5 GHz of processing speed. However, manufacturers still find new ways to continue to improve performance. They've used elaborate pipeline chains and out-of-order execution routines to get more work done per clock cycle, and they've added multiple cores to a CPU die, giving you two, four or six cores per processor. Each core is effectively a stand-alone CPU. Most Intel processors also use hyperthreading, which is a technique to make "virtual" CPUs out of different registers. For most computer users, and the most recent versions of Mac OS X and Windows, more than two CPUs will provide dramatically diminished returns per core. Only users who are doing lots of real time rendering of large scenes in games or 3D art programs are likely to need more than four cores in a processor.
Hard Drive Speed
Most operating systems use a swap file. When your operating system is running out of RAM, it copies the information from RAM that hasn't been accessed in a while and writes it to the hard drive. The downside of this is that hard drives are vastly slower than RAM, both at reading and writing. What's changed recently is that solid state disks have dropped in price. SSDs use high speed flash memory to store data, and are considerably faster than spinning platter hard drives. No single hardware upgrade will lengthen the useful life of your computer, or provide a greater performance boost for less money, than swapping out a spinning platter hard drive for an SSD.
Long gone are the days when you absolutely needed a separate video card to make a computer useful at all. Every CPU Intel and AMD have produced in the last few years has had onboard graphics adapters which are capable of supporting everyday office applications and Web browsers, as well as modest 3D gaming. If you're playing a 3D rendered game with heavy graphics requirements, a good 3D adapter is a must; most users won't notice using integrated graphics chipsets otherwise.
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