The new iPhone Duo is getting a lot of buzz, should you buy one? At $3199 its kind of expensive but you can get it for nothing down and just $88 per month! A bargain, right? Lets take a look at how much this little luxury is really going to cost you and then you can decide for yourself:
$88.87 for 36 months (phone) - $3199 total cost
$20/mo for 36 months (Apple care) - $720 total cost
$90/mo for 36 months (cellphone plan) - $3240 total cost
The three year cost for this phone is $7,159. Well you HAVE to have a phone, right? Yes, but do you need this phone and this expensive plan? Lets look at a cheaper option, the iPhone 16e from tracfone with a pay as you go plan:
$349 iPhone 16e - total cost $349
$20/mo cellphone plan (4GB/mo) 36mo total costs $720
Total 36 month cost for the iPhone 16e thru tracfone is $1,069
iPhone Duo or save $6,090 with a iPhone 16e?
So we are looking at a 3 year expense of $7,159 for the iPhone Duo vs $1,069 for the iPhone 16e which is a difference of $6,090. The iPhone 16e is a cruddy phone and 4GB per month is not a lot of data but do you NEED the iPhone duo and its unlimited data plan or do you WANT it? That $6,090 you save buys a lot of groceries and gas.
How phone choices can make a huge difference over 30 years
Lets compare two different lifestyles over 30 years and see where they end up. In one future you always have the latest and best phone because every three years you buy the most expensive phone like the iPhone Duo. In the other future you buy a phone just good enough to get by. In each case you have a phone but with the cheapo you save $6,090 savings every 3 years ($2030/yr). Because of inflation, that number goes up 3% per year. Now lets look at what that $2030/yr savings does when you invest it in the stock market earning the historical average of 8% return. You end up with $309,000 in your stock market account, this is the magic of compound interest. Which is more important to you, always having the latest and greatest phone or having $309,000 in 30 years? Feel free to do your own spreadsheet if you do not like my assumptions of 3% for inflation and 8% for the stock market but its not going to change the result.
I use the AT&T $300 per year upfront prepaid plan with 16 gb per month, and I pay cash for a new non-pro iPhone every five years. So many people seem to actually believe the carrier deals where they get a “free” phone with monthly credits actually benefits them, as though the carriers aren’t in the business of making money. They done realize those monthly credits are the new three year contract.
Its actual imprisonment. Consumerism robs your freedom. Debt makes you a slave.