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Old 7 Nov 2021, 10:46 AM   #1
webecedarian
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The True Cost of Upgrading Your Phone

The True Cost of Upgrading Your Phone
Buying a $1,000 iPhone can be equivalent to giving up $17,000 in retirement savings or 2,500 cups of coffee.

By Brian X. Chen

Let’s talk about buying an iPhone for $1,000. Tim Cook, Apple’s chief executive, once compared this eye-popping price tag to buying a cup of coffee a day over a year. No big deal, right?

But financial advisers see this differently. By some estimates, an investment of $1,000 in a retirement account today would balloon to about $17,000 in 30 years.

In other words, $700 to $1,000 — the price range of modern smartphones — is a big purchase. Fewer than half of American adults have enough savings set aside to cover three months of emergency expenses, according to the Pew Research Center. Yet one in five people surveyed by the financial website WalletHub thought a new phone was worth going into debt for.

https://www.nytimes.com/2021/10/20/t...sultPosition=1

https://theprofessionalcycle.com/202...-your-phone-2/

https://musicfoodandlife.com/the-tru...ng-your-phone/
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Old 7 Nov 2021, 04:13 PM   #2
chrisretusn
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Why I don't buy iPhones.
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Old 8 Nov 2021, 04:16 AM   #3
janusz
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Quote:
Buying a $1,000 <name any item here> can be equivalent to giving up $17,000 in retirement savings or 2,500 cups of coffee.
.
Conclusion: don't buy <name any item here>, save for retirement
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Old 8 Nov 2021, 08:00 AM   #4
n5bb
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I retired two years ago and am now building a new custom house after demolishing my old house. Since you can’t get much of a mortgage if you don’t have a job, I saved money over the past 25 years in my tax-advantaged retirement accounts. The key financial advice I would give to a young person in the US is to save each month. The most important tip is to save at a minimum enough to get a full employer match to your 401(k) retirement savings account. If you max out the allowable retirement savings contributions each year, you can get a very large retirement nest egg.

The most convenient method of making purchases (credit card with long term balance) is by far the worst for your financial health. Unless you have an important expense which is larger than your emergency savings, never carry a credit card balance! Once you get in the habit of doing this, start saving at least a little bit (such as $50 dollars) a month, and you will build up a checking balance which will allow you to not need to carry credit card interest. If you save $50 per month, even without compounding after two years you will have $1,200, sufficient to buy that expensive phone.

Bill
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Old 22 Nov 2021, 06:05 AM   #5
webecedarian
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Quote:
Originally Posted by n5bb View Post
I retired two years ago and am now building a new custom house after demolishing my old house. Since you can’t get much of a mortgage if you don’t have a job, I saved money over the past 25 years in my tax-advantaged retirement accounts. The key financial advice I would give to a young person in the US is to save each month. The most important tip is to save at a minimum enough to get a full employer match to your 401(k) retirement savings account. If you max out the allowable retirement savings contributions each year, you can get a very large retirement nest egg.

The most convenient method of making purchases (credit card with long term balance) is by far the worst for your financial health. Unless you have an important expense which is larger than your emergency savings, never carry a credit card balance! Once you get in the habit of doing this, start saving at least a little bit (such as $50 dollars) a month, and you will build up a checking balance which will allow you to not need to carry credit card interest. If you save $50 per month, even without compounding after two years you will have $1,200, sufficient to buy that expensive phone.

Bill
On top of the interest rate on credit cards, it's been shown - not surprisingly - that people who use credit cards tend to waste money by spending more on impulse purchases. I also like to choose restaurants that don't take credit cards, knowing that the full amount of money goes to them.
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Old 22 Nov 2021, 10:57 PM   #6
TenFour
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That's just silly. Sure, if you don't spend $1,000 on anything and instead invest it smartly you will make money in the long run. Why pick on smartphones? Don't buy that granite counter top. Don't buy a new car. Don't buy a new bicycle. Don't take a vacation. To me life is not about dying with the most money but about living a great life along the way. If the phone enhances that, it is worth spending money on it. For example, I take lots of photos and have over 250GB of digital shots saved, along with thousands of slides and negatives. It is worth it to me to have a phone with a great camera--makes my life better. Even on the money front, if that $1,000 phone happens to be there when I get the job interview, helps me find the location and get there on time, and then looks professional when I put it on the table during the interview, that might mean $10s of thousands of dollars more per year of salary. Or, that great phone might be used to save my life or someone else's life. Believe me, nobody calling 911 or using an app to help avoid a tornado or hurricane ever regretted having the best phone possible. Plus, there is nothing inherently wrong with using credit cards. I earn hundreds of dollars in credit card rebates every year because I charge everything I possibly can. Instead of an emergency fund sitting in a bank earning nothing right now it is far better financially to put that money into maybe a retirement account, or your 401K, or whatever. I have so much credit I could easily live for a year off of credit cards in the worst case scenario. Look at it this way, with a bank paying less than the rate of inflation your emergency fund is losing money sitting there, so at the very least invest it in the stock market or do something useful with that money while still being able to get at it quickly.
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Old 23 Nov 2021, 03:04 AM   #7
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Even on the money front, if that $1,000 phone happens to be there when I get the job interview, helps me find the location and get there on time, and then looks professional when I put it on the table during the interview
It's been quite a while since I attended for a job interview, but do people actually take their 'phone and put it on display for the interviewer to see?

If I was an interviewer, I would think if the interviewee has got a $1000 iPhone then they've got more money than sense.

But then that's me.
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Old 23 Nov 2021, 03:09 AM   #8
TenFour
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If I was an interviewer, I would think if the interviewee has got a $1000 iPhone then they've got more money than sense.
Not if you're applying for a job at a tech company. Think of it this way. If you go to an interview on a job site and you're a carpenter they will notice how you keep your tools and what they are. Same thing if you are interviewing at a tech company, or many other businesses. Same reason people put on a nice suit and tie for a job interview. These days lots of phones cost $1,000. Sure, it may not make sense to you, but it might make perfect sense for the person working at Google or Apple, or many other places where that $1,000 phone is one of the tools of the exact demographic they are marketing to. EDIT. And, if you pull out an old phone they will immediately think you are not up on the latest, greatest stuff. Pull out a flip phone and you will be the butt of jokes after they dismiss you.

Last edited by TenFour : 23 Nov 2021 at 03:14 AM.
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Old 23 Nov 2021, 03:20 AM   #9
FredOnline
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Originally Posted by TenFour View Post
Not if you're applying for a job at a tech company. Think of it this way. If you go to an interview on a job site and you're a carpenter they will notice how you keep your tools and what they are. Same thing if you are interviewing at a tech company, or many other businesses. Same reason people put on a nice suit and tie for a job interview. These days lots of phones cost $1,000. Sure, it may not make sense to you, but it might make perfect sense for the person working at Google or Apple, or many other places where that $1,000 phone is one of the tools of the exact demographic they are marketing to. EDIT. And, if you pull out an old phone they will immediately think you are not up on the latest, greatest stuff. Pull out a flip phone and you will be the butt of jokes after they dismiss you.
Style over substance? That's the way of the world, and your edit confirms it.
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Old 23 Nov 2021, 03:24 AM   #10
TenFour
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Style over substance? That's the way of the world, and your edit confirms it.
Not really if the company you are applying for makes stuff that directly applies to the $1,000 phones and/or the people that buy them. I worked for a small tech company for awhile, and even though we did not market directly to the phone market we had to keep testing our product's mobile version on all the latest, greatest phones. Every day we would have discussions about some technical aspect of these phones and how they were used with regard to our products.
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Old 23 Nov 2021, 03:55 AM   #11
hadaso
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Originally Posted by TenFour View Post
... And, if you pull out an old phone they will immediately think you are not up on the latest, greatest stuff. Pull out a flip phone and you will be the butt of jokes after they dismiss you.
A 20 years old Motorola flip phone compared to a 3 years old Samsung Galaxy or a brand new iPhone is like a 1967 VW Beatle compared to a 2016 Toyota Corolla or a brand new Tesla. It makes one stand out of the crowd.
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