Phoning It In (2016)


OK, I’m sick of it!  With all of the new mobile phone releases in the last couple weeks I think it’s high-time we talked about the little financial disaster that is that modern mobile phone gizmo.

Yes, you heard me right — a financial disaster!  It’s no secret that I’m not a fan of high-cost mobile phone plans.  That doesn’t mean I’m a neophyte, I still have a smart-phone!  

While smart-phones are extremely useful, it’s important to remember the device itself also comes at a very high cost.  

Can we find ways to save ourselves money on mobile phones?  Well, I’ve got a few ideas…

 

Replacement Cycles

Did you know that the average consumer replaces his phone every 2-3 years?  It’s true — either the phone breaks, the battery wears out, or you just get tired of it in 2-3 years.  

There is good news though:  The phone manufacturers of the world always have a new model for you.  Every year they launch a new model with all the latest tech and that hotter-than-shit styling.

Don’t get me wrong, every year something is improved — it might be the OLED screen, the camera, the battery, waterproofing, the glass, the software.  You name it, they always find something to improve…even if it’s a feature you never use like the fingerprint scanner, or the NFC feature.

The problem is, these new top drawer models cost a fortune!

Just how much?  Let’s look at the cost of this year’s steaming piles of wonder:

  • Iphone 7 Plus – $769, $869, $969 (32GB, 128 GB, and 256GB models respectively)
  • Iphone 7 – $649, $749, $849 (32GB, 128 GB, and 256GB models respectively)
  • Galaxy Note 7 – $850
  • Galaxy S7 – $650
  • LG G5 – $650
  • OnePlus 3 – $399
  • HTC 10 – $699
  • Moto Z – $624, 674 (32GB, and 64GB models respectively)

Holy Tentacles those phones are expensive!!  No wonder people have trouble saving enough for financial independence!  

OnePlus 3
All of this year’s top new models are over $500 except for the OnePlus 3! Is the OnePlus 3 any good? Some reviews say it is!

Replacing one of these devices every two years is a significant cost.  

For example, take the lower-end Iphone 7 at $649 — when replaced ever two years that’s an annual cost of $325!  And that’s only the low end model!

 

The Key To Saving

The key to saving money on mobile phones isn’t really about holding onto your phone longer (although that helps too) — The key to saving money on phones is being comfortable not having the most awesome phone.

Mobile phones are just like buying a new car:  You get that awesome ‘new’ feeling.  It looks cool.  You keep it polished to a shine.  You show it off.  It has tons of new features and gets great mileage (battery-life).  

But after a few years, hedonic adaptation sets in.  The car (or phone) gets a few scratches.  Maybe you don’t clean it quite as frequently.  Eventually new models come out, and your car (or phone) is no longer quite as cool.

You want to save money for financial independence?  Then don’t worry about having a cool phone.  Instead of lusting after that hot-pile of tech awesomeness, buy the cold pile of used-to-be-awesomeness.  You’ll get far more for your dollar.

 

Used is Cheapest

My personal cell-phone is a Galaxy Note 2.  It was released 4 years ago, in 2012.  It’s been a great phone over the last 3 years.  It’s survived countless drops, a bout with the washing machine, and has even done some pretty serious international traveling.  

But I’ll tell you a dirty little secret: I didn’t buy it new.

I found my phone on Craigslist from a guy who was interested in upgrading to the Galaxy Note 3.  He was willing to sell me his one year old Note 2 for only $200.  At the time, this was a great deal, but now you can find it for even less.

Just like a car, buying used is a fantastic way to save money.  Let someone else pay for all that depreciation, right?

Used equipment is always going to be your cheapest option, but I’ve been told buying a used phone isn’t for everyone…

It isn’t always clear if a used phone is going to be unlocked (or unlockable).  It’s also hard to evaluate the state of the phone’s battery when buying used (which is why I recommend buying used phones with replaceable batteries).  

Not everyone is going to be willing to do all that research and work just to buy a used phone.  Thankfully there are other options…

 

New & Refurbished

Why not buy a new older model?  While your favorite cell carrier won’t stock those older phones, major phone manufacturers still sell older models online years after release.  

Check out this example:  Samsung is selling a new Galaxy Note 4 on Amazon for $328.  That’s less than half the cost of the recently released Note 7 ($850)….and I’m pretty sure that new Note 4 won’t catch fire.

If you’re willing to go with a certified refurbished model (which in my mind is just as good as new), you can get that same Galaxy Note 4 model for as low as $254!  That’s three times less than the cost of a new Note 7.

If I was going to upgrade my Note 2 to this new Note 4, it would be a freaking awesome upgrade!  The screen would be better, the camera would be better, the phone might even be twice as fast as my old model.  I can still have those wonderful technology improvements…only a few years behind the current generation!  At a fraction of the cost!

It really is that simple folks — Find yourself a reputable seller of phones on the internet, like Amazon or NewEgg.  Then buy a model a couple years old, and save yourself tons of money. 

Want me to make it even easier than that?

Here’s a handy-dandy table of older models that still sell “new” and under $500*:

MakerModel(s)
AppleIphone 5 ($185)Iphone 5S ($260)  
SamsungGalaxy Note 4 ($254)Galaxy S4 ($149)Galaxy S5 ($189)Galaxy S6 ($260)
GoogleNexus 5 ($145)Nexus 5x ($243)Nexus 6p ($400) 
LGLG G4 ($198)LG V10 ($439)LG G5 ($437) 
OnePlusOne ($286)Two ($270)Three ($399) 
HTCOne A9 ($294)One M8 ($189)One M9 ($413) 
MotorolaMoto G4 ($200)Moto G4 Plus ($250)Moto X Pure ($338) 

* Prices subject to constant change!  Don’t blame me when the price changes!

 

Shopping the 2nd Tier

Another great tip when shopping for a cell phone is to consider purchasing from a “2nd Tier” manufacturer.  Remember that list of this year’s new models?  All those guys are what I call “1st Tier”.  They’re the big names and they make the most marketing noise when a new model comes out.  But they’re not the only players in the game — There are “2nd Tier” names that make phones too!

Blu phone
Lower-end phones like this one from Blu can be had for as little as $110.

Who are the 2nd Tier Manufacturers?  Typically they’re chinese brand phones made in the same factories that Apple and Samsung use.  These guys go by names like:

The 2nd Tier manufacturers typically produce budget phones — meaning there will be trade-offs compared to “1st Tier” flagship phones.

While I don’t have any personal experience with the phones of these manufacturers, I can say that I’ve read pretty decent reviews of these budget phones.  

Do your research carefully.

 

A Personal Choice

Personally I don’t have a problem using older phone technology.  My ego isn’t caught up in what phone I use.  By the time I get to a phone model, the issues have already been worked out, and the bugs fixed too.  It’s a situation that works for me, and provides financial benefits too!

But it’s a personal choice.  I get it.  Maybe owning the latest phone is important to you.  

Financial independence was always more important to me than a new phone.  In a couple years I’ll get to try out that new phone anyway…let me know if it’s any good, OK?

 

[Image Credit: Wikipedia]

20 thoughts on “Phoning It In (2016)

  • September 9, 2016 at 8:45 PM
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    On a recent family vacation my husband managed to lose his phone at the airport and I managed to shatter the screen on mine in the span of 2 days. We went to our carrier store and purchased 2 low end LG phones at the cost of $100 each out the door. They’re not flashy but they are Android so we have all the apps we need and they take OK photos (enough to document events but probably not the most frame-worthy). We joked that compared to the price of one of the higher end models, our new phones only needed to last 4 months to break even.

    Reply
    • September 10, 2016 at 11:57 AM
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      Phones really are fragile bits of technology. I can’t see the logic in paying top dollar when they’re so easy to break or lose.

      But, logic is not always the deciding factor in phone purchases.

      Reply
  • September 10, 2016 at 2:48 AM
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    Great post Mr. Tako! I work mostly online and use a $40 Nokia Lumia 630 Windows phone. I’m not into flashy either and I don’t really use many apps. I spend enough time on the computer – I don’t need to spend more time on my phone. We will look to upgrade next fall when we start traveling more and spend less time on the computer and more taking great pictures 🙂 We’ll go used – a few models back. Great links and information here!

    Reply
  • September 10, 2016 at 4:00 AM
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    I like cheap phones too. There used to be a time when I had an iPhone and payed $200 for extra protection. Now my new phones only cost $200.

    Reply
  • September 10, 2016 at 4:49 AM
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    Just three years ago I moved from my awesome little prepaid flip phone (fit in my pocket and I literally just had for emergencies) to a smartphone because I had to for work (boo!) – and I hope to keep that one until it is dying before replacing. In addition to the money, this is my biggest concern and what I do not want to contribute to: https://planetgreenrecycle.com/fundraising/e-waste/the-electronic-waste-crisis-cell-phones-facts-and-figures

    Reply
    • September 10, 2016 at 11:45 AM
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      Great point TTR! E-waste is a huge problem. I sure wish they made phone more durable…so we wouldn’t have to replace them every few years. But then again, they would probably cost even more!

      Reply
  • September 10, 2016 at 5:02 AM
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    So glad that i don’t have to think about this. Luckily work provides my phone and I haven’t paid for a phone or a plan in years. Going to order the iPhone 7 next week. One of the fringe benefits that will go away when I pull the plug unfortunately.

    Reply
    • September 10, 2016 at 11:44 AM
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      I’m really envious of you guys that get your phones and cell service provided for you. What a fantastic benefit.

      When you finally pull the plug are you going to be able to live with less?

      Reply
  • September 10, 2016 at 5:15 AM
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    For myself personally, I’ve made the decision that I want I will replace my phone every 2 or 3 years. However, I put that into my budget. I estimate that I’ll buy a new phone every 24 months. I then estimate the cost of a new phone and then set aside the appropriate amount every month for 24 months. By the time I’m ready to buy a new phone, I’ve got a the funds already sitting in a separate savings account ready to be deployed. I do the same thing with laptop purchases. Since I’ve historically purchased a new laptop every 5 years or so, I simply estimated the cost of a laptop and set those funds aside each month, just like a bill to myself.

    While it’s true that I could invest that money instead or do something else with it, I’ve made the personal decision that having a new phone is something I want. I don’t really think it’s necessarily a choice between financial independence or no financial independence. We all make choices, and as long as you can afford the choice and stay on track with your goals, I think it’s okay.

    But who knows, maybe other disagree. Seems like the phone thing is turning into the new latte factor…

    Reply
    • September 11, 2016 at 11:40 PM
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      I suppose for some people $800 is a rounding error. Doctors and dentists and CEOs.

      The rest of us aren’t so lucky. We make so little, *every* transaction matters.

      Reply
  • September 10, 2016 at 7:11 AM
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    Ah, the bleeding edge of technology, the frontier where our wallets gets knifed. Not for me. I’m fine with day old bread too – it makes great toast.

    Nice level headed article!

    Reply
  • September 10, 2016 at 9:49 AM
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    I just purchased a brand new Huawei Honor 5x at $169.99 last week. This phone is enough for a former tech guy like me. I don’t really want to spend $700 for a new phone and settled on this one. I would rather invest the different (700 – 169.99 = 530.01) in the dividend stocks!

    These days all of the major phone service companies (AT&T, Sprint, T-Mobile & Verizon) offer a monthly payment plan for new phones. Many people think it is the best deal because they can upgrade their phone every 2 years or so. That is why they cannot save money. That is why they cannot be financially independent. Their habit reflects on many other financial decisions.

    Reply
  • September 10, 2016 at 10:06 AM
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    I’ve had my same phone for around five years now, but the battery is getting pretty run down, so I went into the Verizon store to check out an upgrade. I was totally baffled by the prices. How did they possibly go up that much that quickly?! I opted to pick up a supplemental battery pack instead. I’ll have to follow some of your tips to find my next one! Thanks!

    Reply
    • September 10, 2016 at 11:49 AM
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      If you want to hold onto your phone a long time, it’s all about having a replaceable battery. Samsung and LG are the last holdouts (I believe) on replaceable batteries. Ever other manufacturer glues them into the internals now. Lithium ion chemistry being what it is, the battery capacity will continue to decline as the number of charge-discharge cycles go up.

      Most people get frustrated and buy a new phone, but swapping the battery is a cheap and easy solution.

      Reply
  • September 10, 2016 at 12:02 PM
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    Technically security is more of a software issue, not so much about hardware (in most cases). If the IT department is any good, they would understand this and require minimum OS security patch levels.

    Reply
  • September 10, 2016 at 2:17 PM
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    Stated with a freebie bankofthewest ipod touch and then moved on to a series of chinese branded phones – all just fine.

    Had a doogee phone that was really fine but wanted more memory(not storage) so now using a cubot note s. My son has a zte; and my mom has a newer doogee f5.

    All for less than $100 – the zte is regularly sold at best/buy and amazon for $50-60. Very nice phones there’s no need to spend more – except virtue signaling.

    Many of the chinese brands are available on the web – i’ve had good luck with gearbest and geekbuying. Many of the same phones show up on ebay and amazon – although often for a few bucks more.

    Reply
  • September 10, 2016 at 3:52 PM
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    I am all over the used phones and also have a Note 2 and Amazon Fire Phone. Each was under $150 in great condition.
    For my wife she gets used iPhones.

    Reply
  • September 29, 2016 at 7:52 PM
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    I waited until 2008 to get a cell phone at all. My first phone out of college was a shared land-line and we did not have voicemail. Didn’t get a smart phone until 2012. The first screen shattered within a year even within a protective case and I was so frustrated. My new phone has the toughest case I could get and will stay with me for many years. Thankfully now part of it is a business expense. I still find the expense frustrating.

    Reply

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