iPhone vs. Retirement

I got my iPhone in summer of 2008, and I’ve really enjoyed it over the last two years. However, it’s beginning to show its age, so I’ve been considering getting the new iPhone 4. But then I started really thinking about the total cost. The new iPhone 4 is $299, plus the voice and data plans that you have to get as well. If my wife and I both get the phone, that’s an initial outlay of about $700 (with taxes), and then we’ll spend at least $150 / month for voice and data plans (if we go with the cheapest option). As a result, for a 2-year contract, we’ve just spent at least $4300. And for what? So I can check my email when I’m hanging out with friends? So my clients can bug me when I’m out for a run? Hey, I love looking up some obscure trivia while in line at the bank as much as the next guy, but when I step back and really examine the situation, I’m entirely unconvinced that it’s worth the money. It seems like the digital equivalent of fast food: slightly enjoyable in the moment, but ultimately unsatisfying and very unhealthy.

The situation gets really ugly when you consider that you could invest all that money saved. We still need cell phones, but we’d just get prepaid phones and use Skype for calls in the office, which could easily cut our monthly bill from $150 / month down to $50 / month. If we invested that $700 we saved by not buying the phones, and then saved an extra $100 / month at an inflation-adjusted return of 8% over the next 40 years, we’d end up with $366,000 (even after you adjust for inflation). I’m not sure there’s any Tetris clone or Wikipedia entry that’s worth that much to me. This is especially true when I consider that I too often use the phone as a means to escape my current reality, which is detrimental to my desire to be more present, purposeful, and engaged.

Now, you can break just about anything down like this. Enjoying that cup of coffee? Well just think of how much you could have if you never drank coffee again and invested the money instead!! Some financial authors advocate just this, though I think the more salient point is that you should think carefully about what’s really important to you, and look at the true cost of ownership before you flush hundreds of thousands down the toilet without even realizing it.