Iphone X: Before you buy

 

So I saw that the new iPhone whatever is out. And the price tag is, hold your breath, $1000. Wow..

That is crazy. Keep in mind that I have already shown you that a more than capable smartphone can be purchased for $150.

Why it's a mistake to buy any smart phone for $1000: 

It's simple really, sinking that much money into a depreciating asset is insane from a mathematical perspective because you are putting LOTS of money into something that is NOT going to accumulate value. Yes, you could make the argument that due to the nature of your work the device will enable you to earn more money than $1000 and you'd probably be right. But on that logic, you might as well buy a Corvette to drive to work since that can also help you earn money.

So why don't we all buy cars we cannot afford? Well, aside from bankruptcy, we know it's not reasonable to buy a car with the Corvette price tag when we could simply purchase a Toyota Corolla or similar car. Yeah, the economy car my not be the fastest car on your street, but it is good enough for most basic situations and won't cause you to be homeless. 

Source:

Looking at the chart above, you can see that the iPhone loses nearly 60% of its value just after 12 months. Investments are not good investments if they lose money. Therefore, can we please stop calling smartphones an "investment". They are tools. Over time, tools break and we need to replace them. In the case of the smartphone, there is an abundance of tools all of which do similar functions. Perhaps we can find a tool that doesn't destroy our wealth building ability. 

 Workout that Financial Muscle:

Making the right decisions constantly is what enables us to accumulate wealth. for example, I jog three times a week. I have less than 11% body fat so I don't really need to jog that much. However, sticking to the discipline of jogging so much is the reason why I don't really need to jog at all.

Likewise with financial decisions. ALL purchases I make are judged equally.  Ask yourself, do you really need to make this purchase or can you get similar functionality by opting to go for the smartphone of last year. Or even better, you could pickup a lower priced Android phone as referenced earlier. 

But I can make low monthly payments? 

So what? That just means you are prolonging the fact that you are wasting money. And in some cases, you are charged a fee to facilitate that low monthly payment fleecing program.  

Instead make that money grow:

Don't forget the purpose of my posts here. We want financial independence. So instead of wasting that money on an overpriced piece of metal, below are a few ideas on what you can do with the savings of not buying the $1000 phone;

• Pay off Debt and save on interest. 
• Be proactive and upgrade mechanical vehicle parts that are failing. 
• Add the extra money to your retirement fund. 
• Take a course and obtain a new certification that increases your income. 
• Get a health checkup and be proactive about diet measures to reduce the chance of medical emergencies.
• Plant some veggies and reduce your grocery bill. 

These are just a few ideas off the top of my head. Please share your idea with me on what you would do with the savings. 

Do you know anyone who is about to waste their money? Please share this article with them. Perhaps we can avoid the fleecing.