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Will you be ordering the new iPhoneS or C ?

Discussion in 'Fred's House of Pancakes' started by JMD, Sep 10, 2013.

  1. JMD

    JMD 2012 Prius 4 Solar Roof

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    Still does not address 2 important factors low data speed and no new phone without paying the non contract fee which on a 5S is $700. In one example the service does not accept the 5S. Inferior call quality and data speed. For &60 more I'm stay on contract and get a new phone every year.

    The pre paid guys are where the people go who who have poor credit or high risk of default that is the social stigma.
     
  2. daniel

    daniel Cat Lovers Against the Bomb

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    I have never borrowed money in my life. I lived very frugally before I had money. As a result I had no credit history at the time when I decided I wanted a cell phone to carry in the car for emergencies. AT&T and other carriers refused to sell me a phone because I had no credit history. The fact that I have paid my utility bills on time all my life did not go on my credit history! So the stinking phone companies would not sell me a phone.

    Finally I stumbled on Verizon, which sold me a phone based on the fact that no credit history meant I had never defaulted on a debt.

    It is a perverted system that considers you a bad risk for a telephone, even though you've paid your phone bills on time for a lifetime (I was about 50 at the time) just because you have always lived within your means!

    I am opposed to capital punishment for people, but there are companies that I think should be executed: Dissolve the corporation and sell its assets. Companies that use a person's credit history to make non-credit-related decisions about their reliability, and credit-reporting companies that give bad ratings to people who have never failed to pay a bill, just because they don't spend money they do not have, are among them.

    Living within your means, and therefore having no credit history, should not be a social stigma.

    (P.S. After being unable to rent a car once, because I had a debit card rather than a credit card, I ended up getting a credit card. I pay my bill in full every month. So I suppose I now have a credit history. I sent away for it once, but couldn't actually decipher it, so I don't know, or care, what my credit rating is, since I have no intention of ever borrowing money.)
     
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  3. SageBrush

    SageBrush Senior Member

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    Huh, I thought I addressed those two arguments in a couple of posts. Once again though:

    These comparos are for the AT&T network, with an attempt to include taxes and fees set at 20% for contract and 0% for off-contract. Corporate discounts (~ 15% on service charges) are not included but may be available to some contract customers

    Costs:
    Unlimited voice/messages/2.5 - 3.0 GB LTE HS data
    -- Contract $135 - $150 a month, $35 activation fee, $199 + tax for iPhone: $3658 for two years
    -- Off-contract $50 a month, $650 - 700 for iPhone: $1850 - $1900 for two years

    Limited 450 voice/~200 messages/300 MB LTE
    --Contract ~ $72 a month, $199 + tax for iPhone: $1943 for two years
    -- Off-contract $30 a month, $650 - 700 for iPhone: $1370-1420 for two years.
     
  4. SageBrush

    SageBrush Senior Member

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    JMD is suggesting that his social circles deride people using off-contracts plans by stereotyping them as people who do so because they *cannot* pass AT&T muster for a contract due to poor credit behavior, rather than out of choice.

    In the old days off-contract implied inferior service and phones but that is no longer the case, so choosing a contract today mostly implies convenience, laziness or ignorance -- or living beyond one's means.* JMD may be an exception, since his choice is influenced by a company perk.
    <<shrug>>

    It is by choice for me, no doubt for you, and any other person who simply wants to save money. I really could not care less about conforming to, let alone paying for, silly social stereotypes. Actually, I am delighted to laugh all the way to the bank.

    *I must also mention the irony that the presumed 'upper crust' are the ones picking a contract to avoid the upfront cost of buying the iPhone outright. That kind of suggests that the contract players are the ones with finances in a poor state, living by monthly payments, rather than the reverse, doesn't it ?

    Only in America could a group that lives in life-long debt consider itself financially superior to those who avoid financing and contracts to save money and avoid indebtedness. LOL!
     
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  5. SageBrush

    SageBrush Senior Member

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    Last word, directed to small business owners:
    Off-contract is wonderful. E.g.,

    I'll buy the iPhone for $650 in OR,
    and pay $42 a month for the 'unlimited' plan as defined in post #363
    At tax time I'll deduct the entire amount as a company expense, thereby gaining a 45% discount.
    After two years I will have spent $912* dollars before I sell the iPhone and repeat.

    *In my specific case, I take advantage of my good credit to obtain cards that rebate me ~ 15 - 20% of my purchases. So my net total cost for two years of phone + service before I sell the iPhone and repeat the cycle is in the range of $620 - $670.

    If you can show me a contract that is cheaper, I am all ears.
     
  6. JMD

    JMD 2012 Prius 4 Solar Roof

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    I recall waiting on the line at the Att store when a rather loud and eager sales associate was directing credit challenged consumers to the pay as you go plan which eliminates the risk for ATT and still gets a cell phone plan in the hands if the consumer albeit a inferior plan.

    The cost is lower to assist the lower socioeconomic consumer cause business is business they will take your money as long as they are protected from default. Pay as you go targets low income consumers who do not qualify for long term contracts. That is whom is attracted to that program. Some exceptions apply as mentioned.

    Business tend to negotiate discounts etc. Rarely do businesses go with pay as you go plans. Exceptions may occur but it is an anomaly. Perhaps a boot string start up may deploy a pay as you go plan.

    Pay as you go plans also attract illegal immigrants who cannot produce a social security number to get a traditional plan but need a phone to call. Many will use to make international calls. Very common scenario in California

    Borrowing without responsibility is foolish. Good credit however is your best friend. It keeps capital working for you.

    The USA has the largest GDP in the world and much of that success is based on the strength of our capital markets. But that discussion may be a separate thread as opinions may be divergent
     
  7. SageBrush

    SageBrush Senior Member

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    Borrowing to put a shiny consumer toy in your pocket is foolish.

    I'm sure you are right that people with poor credit who want a cell phone must choose pre-paid. It is equally true that people with good credit but who are living on monthly payments (that is, lack financial reserves and are spending beyond their means) and want a new phone must choose a financed contract. Fwiw, I don't mind standing in line with the social outcasts of either stripe -- because I do not. I handle it all over the internet.

    We should be able to agree that neither group are paragons of financial responsibility to admire. Which brings us back to a simpler and much more useful question: How to spend less money on a chosen cell phone and service ?

    I've added what I know. You ?
     
  8. JMD

    JMD 2012 Prius 4 Solar Roof

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    I think your looking at it wrong. If I had a choice with a $1,000 cell phone budget. I would spend the $200 on the phone and invest the $800 on that new IPO REIT that owns the Empire State Building stick symbol ESRT. That way I get the phone which is new and a faster data plan and a better call quality. I also have a part ownership albeit a very small one in Manhattan commercial real estate. Money is a game and managing it is an art.

    If everyone in America just purchased the cheapest cars we would all be driving Toyota Yaris no options. If we had no credit we would live in Cuba or some other similar place. You drive a Prius cause it has something the cheaper car does not. Think along those lines . How important us a crystal clear phone reception in your business? Will it help add value?

    Money is money. It 'a like third grade . You don 't cry over it. You invest in it. Just as you invested in yourself.

    In 2 years you look at that $800 and if it us worth $1,520 you covered the price differential and you still own a brick at the tallest building in NY . Perhaps your business grows cause you improved call quality. If your REIT is worth more your a hero . If it's worth less you reevaluate. The fact that you hung your neck out there and took risk in itself will be a valuable lesson not hunting down the worst inexpensive cash up front back alley phone plan my landscaper uses. I digress.

    Think of this. You need to lower your energy bill . You spend $250 a month on electric. You don't unplug all the appliances and not fix the Air conditioning. That is silly . Maybe you lease a solar system that costs you. $75 a month and the utility company bill is zero . Just saying options are everywhere .
     
  9. SageBrush

    SageBrush Senior Member

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    If is the operative word here. I think it more likely your $800 investment is worth $300 in two years.

    I am familiar with opportunity cost, I assure you. As a reasonably savvy investor I do not take on investment risk I do not have in savings I am able to lose and stay solvent, in my home, able to continue my lifestyle.

    And frankly, it is a fool's errand to gamble that the difference is cost between a contract and off-contract phone can be made up by investment of the opportunity cost. Unless your name is Bernie M, but then bigger problems are on the horizon. Think about it a second: The unlimited contract player has spent about $250 on day #1, and then spends some $140 a month. The off-contract player spends $650 on day one, and then $42 a month. The opportunity costs cross after
    250 + 140x = 650 + 42x
    x = 5 months.

    Do you *really* think prudent investment is going to recoup ~ $2000+ dollars from investing less than $250 (averaged) in 5 months ?? I realize you service plan is different -- I leave the exercise in your capable hands.

    I liked your argument that you have a contract plan because of a company perk. The other arguments are really not rational or persuasive. In my opinion only, naturally.
     
  10. JMD

    JMD 2012 Prius 4 Solar Roof

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    Unless you have a crystal ball you do not know what that will be worth in 2 years. My Tesla stock purchased at $50 is clocking in over $180 a share. To put all investing as a Bernie M scenario just tells me you have a natural aversion in investing in ownership of American companies. Bernie is a crook and Justice was served. Various collections have restored much but not all the investments. I actually know someone's parents who got burned. It was a small part if there total worth and much has been returned. Diverse investments is prudent.

    However many examples exist that paint a much different picture of rewarded investors. Steve Jobs founded Apple in his parents garage today it is the most valuable brand in the world debunking Coke A Cola. He widow is among the wealthiest people in the world. I wonder if Steve ever had a pay as you go plan. There is a difference between investing $ and being penny wise and pound foolish.

    My previous calculation based on my usage only showed a $62 difference in both plans. Well worth the investment for better call quality and faster data speed.
     
  11. SageBrush

    SageBrush Senior Member

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    No crystal ball here, but I do know rolling 10 and 20 year historical risk/returns for the past 100 years of the US stock market. For every well timed (for now) investment in Tesla there are *thousands* of investors who thought they were smarter than a low risk, low cost Vanguard fund. A lot of them were right ... for a while.

    As an individual stock investor, sometimes you will do well and other times do poorly. If you are banking on much over 4-5% per annum real appreciation over time, I worry for you.
     
  12. JMD

    JMD 2012 Prius 4 Solar Roof

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  13. SageBrush

    SageBrush Senior Member

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    Not true when you correct for their habit of dumping poor performers from the index. Needless to say, the investors do not have the same privilege.

    Coming back (somewhat) to this thread, nothing prevents you from investing your monthly subscription savings. Look at this simple SS I just made. You can set the

    Monthly interest rate (mpr)
    Off contract monthly charge (OFF_SC)
    Contract monthly service charge (Contract_SC)

    And watch the graph.
     
  14. JMD

    JMD 2012 Prius 4 Solar Roof

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    The chart does not lie
     
  15. SageBrush

    SageBrush Senior Member

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    I hope not :)
    All the data and formulae are there to look at.

    Perhaps not obvious, I added in opportunity cost at whatever appreciation rate you care to hope for.
     
  16. JMD

    JMD 2012 Prius 4 Solar Roof

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    So Sage what is your road map to the pot of gold. Please don't tell me it is shutting off the utilities and living as a homeless person.
     
  17. SageBrush

    SageBrush Senior Member

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    • Work
    • Frugal, conservation driven Lifestyle
    • Healthy Lifestyle
    • Conservative Investing
    My wife will tell you that I shut off the lights all the !!!&%'!! time. Since we own a new Prius and I am posting in the new iPhone thread, it is a fair guess we are not homeless.
     
  18. JMD

    JMD 2012 Prius 4 Solar Roof

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    I agree with all that but your cell plan and not repairing the Ac to save a nickel. Better options exist :)
     
  19. SageBrush

    SageBrush Senior Member

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    Ah NO. Leaving the AC broken was my motivation to learn how to control the climate in my home with more natural means. When you cannot push a button, you have to use your noodle. And sometimes add in some sweat, but that is all good. Tomorrow I'll start the job of installing my remaining two windows still sitting in the garage. It will take a week, but what are vacations for ?

    As for the cell plan, if you know of a way for me to spend less money than I do now for equivalent phone and service, please tell.
     
  20. JMD

    JMD 2012 Prius 4 Solar Roof

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    The phone services you are comparing are like comparing apples to oranges.

    AC move to a more temperate climate. Santa Barbara near the ocean no AC required