The True Cost of Upgrading Your Phone

[JohnnyBGoode]

I have often marveled at people that have the latest and greatest iPhone (that gets more expensive each "improved" version) but yet seem to be financially challenged in so many other ways. Plus money spent now has a large opportunity cost if invested wisely. The question is, of course, whether than money spent on the latest phone would actually be put to a "better purpose".

This recent NYTimes article addresses this directly. https://www.nytimes.com/2021/10/20/technology/personaltech/iphone-upgrades-cost.html

Great article, but the first few paragraphs give you the gist:

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.

I'm perfectly happy with my 3-year-old iPhone XR, but even I can drool a bit at the new offerings.

 

[Midpack]

We finally traded in our iPhone 6-Plus’s for iPhone 12’s last year. And we’ll probably get the iPhone 18 when it comes out, or whatever is new when Apple stops supporting our iPhone 12’s…

Most of my peers always have newish smartphones, and it’s all they can do to make phone calls and send texts with them. Email, maps or anything else and I get this

 

[nobody]

last year had to let go of my 7 year old $200 android phone since it couldn't run newer apps when I started to get into home automation. So I upgraded to a $300 android phone with a $200 a year plan. Inot made of money.

 

[Qs Laptop]

So, according to the NY Times the true cost of buying a $1,000 phone is missing a $16,000 gain had you instead invested the $1,000 for 30 years??!!

And we're supposed to take this seriously?

Let's do some more...

* The true cost of buying a $1,500 mattress/frame set is $22,500--had you invested the money instead.

* The true cost of buying a $750 propane BBQ grill is $11,250--had you invested the money instead.

* The true cost of buying a $1,000 <fill in the space> is $17,000--had you invested the money instead.

Silly, isn't it?

 

[bloom2708]

Most people spend much more on alcohol and terrible food per year.

The smart phone is a magic device in a small package.

 

[Chuckanut]

Let's do some more...

* The true cost of buying a $1,500 mattress/frame set is $22,500--had you invested the money instead.

* The true cost of buying a $750 propane BBQ grill is $11,250--had you invested the money instead.

* The true cost of buying a $1,000 <fill in the space> is $17,000--had you invested the money instead.

Silly, isn't it?

Opportunity cost.

I think the true cost has to be measured against the value an item brings to your life. If the BBQ is used often to cook tasty meals, and entertain good friends, it might well be worth $11,250 over all those years. Or maybe not. It's all individual choices.

Before my 2012 Camry was totaled, I used to tell people it came with a one week vacation in Europe every year. That was the money I freed up for travel by not buying a new car every 3-4 years and thus avoiding the higher depreciation costs of newer vehicles. It made sense to me. A week in Europe versus having the latest BelchFire Turbo sports sedan in my driveway. My choice. YMMV..... pun intended.

 

[braumeister]

We bought the original iPhone and loved it. Upgraded every two or three years since then. Will continue to do so as long as we enjoy them. You do realize you get a nice refund on a trade-in, or even more selling the old one?

The other part is that for many trips (and we take many), this little device that fits in your pocket fulfills many roles. Web browsing, email, texting, local information, GPS location, health monitoring, entertainment, etc., etc. (even actual voice phone calls!).

But newspapers are prone to publish stuff they think will get your attention, aren't they?

 

[bobandsherry]

Meh, there's smart way to upgrade. Last 3 upgrades have been at no cost. Well, ok, just tax. Tmobile has had upgrade offers where you get phone for free after bill credits spread over 24 months. The cost of the phone is also spread over 24 months, so net zero other than tax paid at purchase. Also did an upgrade and paid off phone, then sold phone and put money in my pocket. I continue to get credits so will net to zero for cost and I make money. So overall I'm net with profit after all my upgrades. [emoji41]

 

[J277]

All depends on priorities. some people are super into phones or feel the need to have the latest and greatest tech wether to impress others or for personal enjoyment.

Personal finance is personal after all. Everyone has different values, goals, and beliefs that shape their way of life and spending habits. If we all were about optimizing our income to the max we would live off lentils in a house with 20 roommates.

I didn’t necessarily need a new phone when I went from my XR to my 12 mini. Only reasons I did is battery life and I wanted a smaller phone again. Meanwhile I’ve had the same iWatch since launch day and don’t intend on upgrading until mine no longer holds a charge thru the day or breaks.

I do see your point about the financially challenged seem to want the best and newest tech. But I see people on the FI path who do the same.

 

[catii]

I was perfectly happy with my Galaxy Note 5 until the battery decided to self-immolate, expand, & crack the screen. So I went high-end, & bought the new $1100 Galaxy Note 20 Ultra, because they gave me a $300 credit on my dead phone. By the time I got over to pick up the new phone, the Galaxy Note 21 was out, & since they didn't want me to switch, they gave me another $500 credit. So, for $300, I'm pretty happy.

 

[ivinsfan]

What a boatload....BIL managed to run over his 2 year old Samsung with the big digger one phone call to Verizon and they next day aired him an new A12e for 200 bucks.
It's phone, GPSer on the auto steering, part lookerupper on the fly and communication with the outside world from inside the combine...I dare the NYT to show me a better value.

 

[JohnnyBGoode]

We bought the original iPhone and loved it. Upgraded every two or three years since then. Will continue to do so as long as we enjoy them. You do realize you get a nice refund on a trade-in, or even more selling the old one?

The other part is that for many trips (and we take many), this little device that fits in your pocket fulfills many roles. Web browsing, email, texting, local information, GPS location, health monitoring, entertainment, etc., etc. (even actual voice phone calls!).

But newspapers are prone to publish stuff they think will get your attention, aren't they?

Yep, I think in this case both things can be true. It is a lot of money that, if invested, could grow a lot. But that is true with anything you spend money on today. Living in a cardboard box under the overpass and investing 100% of your money is the extreme end of this scenario.

But I do agree that modern phones are a marvel. Bang-for-buck I probably get more use/enjoyment out of the phone than any other tech.

I think the bottom line is to not get sucked into the latest-version-hype if your current device is doing fine. And don't get into debt to get the nicest version of the iPhone if you can't afford it. Go used, get a cheaper Android model, etc. But if you can afford it and it doesn't get in the way of your plans or obligations, then go for it.

 

[disneysteve]

I think the true cost has to be measured against the value an item brings to your life.

True. My iPhone is far and away the most useful and versatile item I've ever owned. It is an amazing resource. It allows me to stay connected with friends around the world, get directions, order food, shop, take photos and videos and share them with others, track my finances and make transactions, make bank deposits, sell on Marketplace and ebay, play games, watch TV shows and movies, check the weather forecast, get the latest news, listen to music and podcasts, save money in various ways, keep track of my work schedule, book travel, track my exercise routine, scan and quickly pay while grocery shopping, attend our bi-weekly staff meetings, browse real estate listings in Florida, and so many more things.


$1,000 for a pocket size device that does all of that? I challenge anyone to show me a better bargain.


For the record, I've got an iPhone 7 but I'm starting to think about upgrading. Probably within the next year.

 

[Ronstar]

So, according to the NY Times the true cost of buying a $1,000 phone is missing a $16,000 gain had you instead invested the $1,000 for 30 years??!!

And we're supposed to take this seriously?

Let's do some more...

* The true cost of buying a $1,500 mattress/frame set is $22,500--had you invested the money instead.

* The true cost of buying a $750 propane BBQ grill is $11,250--had you invested the money instead.

* The true cost of buying a $1,000 <fill in the space> is $17,000--had you invested the money instead.

Silly, isn't it?

Exactly! Same could be said about every expenditure. I should have never bought a house - should have lived my whole life in a cardboard box. I can't imagine the amount of money that this house has really cost me.

 

[disneysteve]

Exactly! Same could be said about every expenditure. I should have never bought a house - should have lived my whole life in a cardboard box. I can't imagine the amount of money that this house has really cost me.

I'd be far wealthier if I had stayed single and childless.

 

[ivinsfan]

I'd be far wealthier if I had stayed single and childless.

You mean you'd have more money but your life might not feel as wealthy.

 

[disneysteve]

You mean you'd have more money but your life might not feel as wealthy.

Absolutely. I definitely wouldn't trade the life we have for more money. That was the point I was trying to make. It's not all about the money.

 

[ivinsfan]

Absolutely. I definitely wouldn't trade the life we have for more money. That was the point I was trying to make. It's not all about the money.

Just wait there will be an article coming along soon telling us the true cost of throwing money in the salvation army kettle.

 

[rk911]

I have often marveled at people that have the latest and greatest iPhone (that gets more expensive each "improved" version) but yet seem to be financially challenged in so many other ways. Plus money spent now has a large opportunity cost if invested wisely. The question is, of course, whether than money spent on the latest phone would actually be put to a "better purpose".

This recent NYTimes article addresses this directly. https://www.nytimes.com/2021/10/20/technology/personaltech/iphone-upgrades-cost.html

Great article, but the first few paragraphs give you the gist:



I'm perfectly happy with my 3-year-old iPhone XR, but even I can drool a bit at the new offerings.

we're still using our Iphone 7's which weren't state-of-the-art when we bought them years ago. we plan to keep them for at least until the IoS cannot be updated. hint: try socking away your loose change into a can every day and adding your $1 bills at the end of the week. by the time your current phone is obsolete you'll have saved most or all of the cost of a new phone.

 

[rembrandt]

My cellphone is basically a paperweight. I only use it to generate a code to unlock my work computer.

 

[disneysteve]

we're still using our Iphone 7's which weren't state-of-the-art when we bought them years ago. we plan to keep them for at least until the IoS cannot be updated. hint: try socking away your loose change into a can every day and adding your $1 bills at the end of the week. by the time your current phone is obsolete you'll have saved most or all of the cost of a new phone.

What is this loose change you speak of? I very rarely use cash for anything so very rarely have change.


As I said, I'm a fellow iPhone 7 user, and mine wasn't the latest model when I bought it either. I tend to buy one model back so the 8 was probably out, maybe even the X.


I do need to at least update the OS because sometime soon I won't be able to access my work stuff on it if I don't.

 

[skyking1]

What a boatload....BIL managed to run over his 2 year old Samsung with the big digger one phone call to Verizon and they next day aired him an new A12e for 200 bucks.
It's phone, GPSer on the auto steering, part lookerupper on the fly and communication with the outside world from inside the combine...I dare the NYT to show me a better value.

Hehe, you reminded me of a burner phone I got to sell a travel trailer. It fell out of a big digger when I was working in Mt. Rainier park, and got all the smoke let out of it. Wow did it get hot! That's why they call them burner phones?
Luckily I had my cool phone there to take a picture.

 

[Montecfo]

True. My iPhone is far and away the most useful and versatile item I've ever owned. It is an amazing resource. It allows me to stay connected with friends around the world, get directions, order food, shop, take photos and videos and share them with others, track my finances and make transactions, make bank deposits, sell on Marketplace and ebay, play games, watch TV shows and movies, check the weather forecast, get the latest news, listen to music and podcasts, save money in various ways, keep track of my work schedule, book travel, track my exercise routine, scan and quickly pay while grocery shopping, attend our bi-weekly staff meetings, browse real estate listings in Florida, and so many more things.


$1,000 for a pocket size device that does all of that? I challenge anyone to show me a better bargain.

I accept the challenge.

Surely a less expensive smartphone is an even better value. I can afford a $1000 phone but I do not see the value proposition. Our Pixels are fantastic and very highly rated at way under half the price. They do everything you listed and have fantastic cameras .

And as an aside if you buy the insurance on these phones, that is an exceedingly poor value in my view.

 

[mrfeh]

I am repeatedly amazed by what people spend on mobile phones - not just the device, but monthly plans.

I've never spent more than $200 on a phone. My monthly plan is $8.

 

[mrfeh]

Surely a less expensive smartphone is an even better value. I can afford a $1000 phone but I do not see the value proposition. Our Pixels are fantastic and very highly rated at way under half the price. They do everything you listed and have fantastic cameras .

+1

The debate isn't phone vs no phone. It's about value.