Do NOT Buy the iPhone 6

do not buy the iphone 6

Yes, the world stopped for an hour this Tuesday as Apple made it’s annual iPhone announcement. The new iPhone 6, the greatest thing that has ever been built in existence. Wait, hasn’t Apple claimed that throughout every iPhone cycle? I digress. Now, I’m here to tell you to stop! Do NOT buy the iPhone 6!


 

APPLE THE SEDUCTRESS

I haven’t been this tempted to throw hard earned money out the window in a long time. I’ve even been building up this purchase with my wife by constantly reminding her all summer that the new iPhone 6 will be coming out in September. I bemoaned to her “I oh-so-neeeeeed to upgrade by piddly iPhone 4, from gasp, 2010. Do you know how long ago that was? Ke$ha’s Tik Tok was the top song of 2010. How can I even associate myself with a phone from that era!?”

This is what I was getting ready to do today on the Apple online store:

do not buy the iPhone 6

However, rather than letting emotions control my monetary decision making process – and possibly making a dumb money decision – I went through a long and hard logical thought process.

STOP DROP & MATH

First thing first, do we really need a new iPhone? Since buying my revolutionary iPhone 4 in 2010, I have seen three even more revolutionary iPhones come and go (4s, 5, and 5s). What makes this one so special? Absolutely nothing! Oh pooh pooh you might point me over here and tell me how great all the new features are. You’ll probably even tell me that the phone is bigger. WHOA! I never knew adding a few inches to a smartphone was considered revolutionary.

Let’s get something straight, if we were to buy the new iPhone 6, there is no need for the 16 GB model. Unless you plan on never taking video, pictures, having apps, or having music, 16 GB is laughable. We can agree that the 64 GB model is the sane choice for most people. And I don’t know about you, but I would never buy a phone on a contract. Contracts are stupidly expensive. I get by on a hacked $20 a month prepaid plan with unlimited voice, text, and data. That’s a post for another day. But in any case, we are looking to purchase unlocked iPhones at full price.

do not buy an iphone 6

Let’s chose the iPhone 6 Plus because we are gluttonous consumer drones. And let’s say we are faint of heart and want AppleCare. Ok. Throw in another $88 ($79+taxes). Oh, and throw in a case for your brand new precious for maybe around $40. Let’s see, what does this all work out to?

do not buy an iphone 6

OPPORTUNITY COST ALTERNATIVES

Holy pig on a stick, what else can we do with $1228?!

1) Buy 11 shares of AAPL – Hey look, you can just own shares of the company selling the iPhone 6 and get rich off all the suckers consumers buying Apple’s “overpriced premium priced” products! And look, they pay a 1.86% dividend to boot!

2) Buy 8 shares of BRK.B – I may be extremely biased on this one, it’s my favourite stock.

3) Buy 47 shares of VXC – Why own an iPhone when you can basically own all the biggest companies in the world outside of Canada? This one is for all the Canadian readers.

4) Buy 22 shares of VXUS – The VXC equivalent for the American readers.

What would $1228 grow to over 10, 20, 30, 40 and 50 year periods fully invested in the stock market? Using historical market average nominal returns of 10%, our iPhone 6 purchase could have turned into:

do not buy the iphone 6

Holy $H** who knew cash today for an iPhone 6 was so valuable if invested and left to compound for 50 years!? My iPhone 4 isn’t looking too shabby anymore. Now, instead of throwing my money at Apple, I want to do this to my investment accounts:

don't buy the iPhone 6

Geesh, seriously. I want to take the money I have earmarked for the iPhone 6 purchase and just buy one of those 4 investment options I listed above.

CONSUMERISM AT ITS FINEST

So should you buy an iPhone 6? Well, that is up to you. But in my opinion, if your phone is still working fine, take a pass. At the least take a time out and think things through very methodically.

If you really need to get a new phone, why not a brand new Google Nexus 5 for under half the price?

I leave you with a clip from one of the best parodies of Apple and iPhones ever.

Are you being tempted by the new iPhone 6 and iPhone 6 Plus? Have you already made your hedonistic purchase? What will you do when the next revolutionary iPhone comes out?

Like what you’re reading? Than maybe it’s time you join the legion of other Kapitalusts! No spam. No ham. No nonsense. It’s super easy to unsubscribe if it ain’t for you! So why not give it a try?

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24 thoughts on “Do NOT Buy the iPhone 6

  1. I’ve never gotten the appeal of Apple-mania. I do have an iPad 2 from about 3 years ago, but I never had an iPod or an iPhone, etc. I just don’t get it!

    PS, love the phrase “stop, drop and math”. I might need to borrow that at some point 🙂

    1. We have everything Apple in terms of electronics: iMac, Macbook Pro, iPad Mini, and my iPhone 4.

      They do make very dependable products. They are also aesthetically pleasing. And the materials and the style they use definitely make it feel much more premium than some plastic cased electronic product. Put it all together and they do actually make very good products.

      My iPhone 4 is still going strong 4 years in. The iMac is still going strong (after a minor RAM upgrade) 4 years in. Same with the Macbook Pro. I guess you pay a premium up front for products that will last quite a long time (in terms of electronics).

      And you are most welcome to have world-wide, exclusive no-royalty license to use the phrase “stop, drop and math” haha!

      1. I disagree that Apple make good products built to last any more. They’re absolutely designed for planned obsolecence nowadays and upgrading RAM etc is hard to do.

        I’ve got an old Dell PC running Windows XP from approx 2002 that still does most of what I’d ever want to do on a computer (Not actually used it for a year or so as work provide me with a MacBook). I might fire it up soon as an experiment to see how it’s getting on actually! Good post, I would avoid buying one like the plague 🙂

        1. I would say some of the products are and some are not. The 2011 iMac and MacBook Pro we have are very easy to upgrade. My iMac will be good to use for at least another +5 years as I have maxed out the RAM and will eventually install a SSD. Same goes for the MacBook Pro.

          Now, the iPad and iPhone are different stories – they are not upgradeable in anyway.

          HOWEVER, my iPhone 4 is still going strong and will likely still go strong for another 2-3 years, on the hardware side. As long as you can keep the software on earlier generations of iOS or hack it and put your own custom iOS on it, there are no problems in terms of performance.

          I would argue that getting at least 4 years and perhaps up 6 to 7 years of performance out of a smartphone is pretty damn good for an electronic in this age!

          Perhaps we will have to agree to disagree 😛

    1. Hehe we briefly joked about it, but in our ongoing discussions about AAPL, we both agree that we don’t feel certain about how Apple will fare in the long term, so we stay away from the stock.

      However, I did get approval to buy BRK instead so I’m going to do that and it’ll be the subject of a future post! 😀

    1. Well with the quality of video and pictures the iPhone 6 will take, the songs you want to carry around (songs are like ~7-10mb a pop these days), the games and apps (with a lot of them running +100mb a pop), and potentially video you might want on these large screen bad boys, 16 GB will fill up fast.

      16 GB could work if you run bare bones and stream everything and have minimal apps/games.

      And 16 GB is really like ~14 GB because some GB is used up with the software on the phone!

  2. As an AAPL shareholder, I say go out and buy that iPhone 6/iPhone 6 Plus!!!

    I never understood people that update their phones or electronic gadgets every year (or sometimes less than a year). How the heck did you get all that money from?

    1. By renewing their gross +$60 monthly contracts with their cellular carriers!!

      I mean, it’s great from a shareholder/market participant perspective, but terrible on an individual basis – haha the paradox!!

  3. For the price of an iPhone 6, you can buy the Nexus 5 ($400), Nexus 7 tablet ($230) and an LG G watch ($250) to fulfill all your tech needs, plus have enough left over to buy some AAPL shares.

    1. That is amazing haha! Thanks for running the math for us!!

      I wonder what other electronic combos we can build for the price of an iPhone 6 Plus fully loaded!?

    1. Shipping times are “slipping”. Strategic words for “we have all the phones but want to increase perception of shortage, which makes people even crazier” haha!

  4. A smartphone is an ‘investment’ to me because I constantly use the damn thing! Now more than ever to keep up with the personal finance blogosphere and my own blog.

    Dropping over $1000 on an iPhone is ludicrous though. It’s absolutely not worth that amount of money! My HTC One M8 is arguably as good or even better than the iPhone 6 and cost way less.

    Luckily my employer pays for most of my telecommunications expenses, even my phone. Otherwise I’d have a hard time to convince myself I needed to
    spend so much money on a phone every year.

    1. I agree cause I use my iPhone 4 quite a lot to read+Twitter+email+text and it could definitely be faster, as surely it would be with an iPhone 6. I guess dropping the +$1000 is where I am getting a little disillusioned 😛

      Some employees of my work get their smartphones and bills covered by the employer – perhaps one day I can join their ranks!!

  5. Haha, great post! I love how you took this one purchase and put out the true costs of it be comparing investing and buying the phones. With that said…

    SHUT UP AND TAKE MY MONEY FIDELITY!

  6. Thanks for the analysis. You’ve convinced me not to buy an iPhone 6 🙂 $1,100 for a phone is too price, and the screen resolution isn’t even quad HD. But I’m thinking about upgrading my phone anyway. The current one I have still works, but it’s too slow to browse the internet. Maybe I should get a 5s instead? Or a Nexus, LG, Galaxy, Xperia, or Moto. So many to choose from.

    1. You can always scour Craigslist for all sorts of deals now that people with 5s want to upgrade to the 6. Maybe there are a few desperate people who want to offload their pristine 5s so they can buy a 6??

      There are so many options. It’s hard to move away from Apple once they have you in their ecosystem though – hence why a future phone will most likely continue to be an iPhone 😛

  7. Great post highlighting the nonsense that many people get involved with. Can’t wait to see the news reports of the people camping out in line to be the coveted first to own an i6. What a waste. Personally, I am on an LG Optimus from 2010 that I bought used on eBay a year ago for about $23 delivered to my door. I’m using Ting as my network and pay about $27 a month for two phones. Thanks for highlighting the craziness that permeates our consumer focused society.

  8. Hi Kapitalust,

    I didn’t buy an iphone and I never will in the future. The only things I do with my phone is calling, texting and reading my mails and I can do that with a phone from 75 Eur. The only apple product I own is an Ipad and i got that one for ‘free’ when i subscribed for a newspaper.

    I prefer the second option and put 1200 EUR in the stockmarket and let the magic of compounding do its work.

    Cheers,

    Geblin

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