Thursday, March 22, 2018

Millennial choice: House or Smartphone?

David Pogue: iPhone

To clarify, this is a message to any person under the age of 25, meaning that you were born 1993 or later. My claim is this:

You have a stark choice

a) You can start saving money and put it towards large purchases chiefly

- repayment of student loans
- a car for transport
- a home to live in

b) You can believe the Hype and take that disposable income, and spend it on short term gratifications principally like a new Smartphone

Unfortunate Truths

- House prices have risen astronomically

- Money is cheap, but only to the few.  Those few include Governments &  Highly Paid Professionals,  the sad irony being two groups to whom it should be expensive.

- You might not need a Car anymore.
This might seem like an advantage, but saving for a car, used to be an individuals first large purchase, the one they could not make straight for cash, but via a loan that was repaid over time.   With out this training, jumping straight to a house purchase is a mental jumpt too large for some

- When I bought a PC
Back in the day you might save just a little to buy a PC.   You know something with a screen and keyboard and mouse, and a system unit sitting on the ground.

You might buy one and then keep it for at least 5 years. Or if you were an enthusiast maybe 3 years. You would never considering replacing it every year because a newer model came out.

Cycle Times
Somehow the Smartphone Industry has convinced us all that our lives will be so much more wonderful if we replace our phone every 12 months.  Indeed, the update cycle of the major vendors like Apple is an updated product every 6 months.

And Geronimo, there is almost something wrong with me if I decide to keep my phone for 3 years, and I would almost have to hide my phone away from public display should it be 5 years old.

Inertia Pressure
The current conspicuous consumer economy pushes hard for you to maintain your most obvious status symbol, something you might use in public tens or hundreds of times a day

== your Smartphone

Manufacturer Mo Money

I am not sure how proud Apple are to have the accoldade of the first volume shipping Smartphone in excess of 1000 GBP for sale.

But wait: Samsung is at it too

Allowing 35 GBP for your dataplan this phone will cost you 919 GBP over its 24 month term.  (Not ideal since after 12 months you will want a new phone right?)

A Way Forward

We all deserve a little something special now and then, but a Smartphone costing 1000 GBP especially if it replaces a barely 1 year old Smartphone you already own does I venture, not fall into this category.

Sometimes we need to think about long term needs and our financial independence.   Just think hard whether that new Smartphone is really going to do it for you.

As Uncle Steve once said:  It's only a Phone :-)