During our May 2016 Dividend Income and Expenses update, I shared the annual cost of our mobile phone plans. Many people were surprised by how little we paid annually for our mobile phone service. Today, I’ll share how we do that….
We Pay Annually
In total, our mobile service for two phones amounted to $122.45, for the upcoming year. Yes, the entire year! That works out to $5.10 per month per phone. Yes, it’s that low!
Before I give away the secret sauce, I should probably this story from the beginning…
My Cost Per Minute
The year 2000 was the year I graduated from college. I was fantastically optimistic back then. I had a paying job, and the future looked bright. In my arrogance, I went out and purchased a mobile phone with accompanying service plan. This was back in 2001. It was a nice Nokia dumb-phone (now I’ve completely dated myself!).
I paid about $50 for that Nokia. The monthly plan amounted to $29.99 per month. Yes, I was a big spendthrift back then – don’t worry, I’ve sinced learned from my (former) wasteful ways.
Anyway, I enjoyed the use of my very first mobile phone for an entire year. Once my one year contract was up, I decided to sit down and do a little math.
Remember my tools for temptation? I decided to calculate my cost per use.
I added up the annual cost of my mobile plan, and divided by the number of minutes I actually used it (I didn’t use SMS at the time).
Essentially, I found out the cost per minute of my mobile plan, and the result was shocking. The price per minute exceeded $1. Yes, I was paying over one dollar per minute. Why so high?
It turns out, I’m not a big talker! Neither is Mrs. Tako. Back then, I didn’t use my phone very much, and I still don’t today.
I would have been better off financially using a pay-phone. Yes, they still had pay-phones back then! Instead, I switched myself over to a Tmobile pay-as-you-go plan.
Pay As You Go Plans
Pay-as-you-go (sometimes called prepaid) plans are great for people who are not heavy mobile phone users. If you’re not familiar with how these plans work, just envision a bank account. You put money onto the account and maintain a balance. You “withdraw” money from that account when you talk or text. Sometimes the money in the account will ‘expire’ depending upon the plan terms.
Over the years we’ve built up a pretty decent balance on our accounts, and only need to pay the minimums ($10) to maintain the account for a year. We actually spent more than the minimums this year, but it’s still pretty cheap at $55 per account (before taxes)!
So that’s the big secret — We know how much we’re going to use our phones in a year. We don’t use them much, so we don’t bother paying for much! A simple pre-paid plan is more than enough for our usage!
Fast forward to 2016, and not much has changed.
Our T-mobile prepaid plan is now a “legacy” plan and not available for new subscribers. We still don’t talk on the phone much. We do have much better phones now, but we still get by with minimal pay-as-you-go plans. We also don’t sign contracts to subsidize the cost of our phones. Instead, we buy cheap phones off the internet (Mrs. Tako’s phone), or used phones from Craigslist (Mr. Tako’s phone). We don’t purchase mobile internet plans because we don’t need them.
Frankly, those plans are overpriced…
The Mobile Internet Addiction
I don’t need to tell you that in the last 8 years, the world has become completely addicted to mobile phones and mobile internet access. Instead of holding their heads up and looking around at the world, every spare second of human life is now spent looking down at tiny little screens. It reminds me of drug addicts, always looking for the next hit.
Chiropractors must wake up every morning and think they’re living in some kind of dream world.
Much of the developed world is addicted to mobile internet access. Don’t think you’re addicted? Try giving it up. Oh yes, I know…you can’t live without it for a million reasons. I can hear the excuses from here.
You know what? You don’t need it!
I’ve never had a mobile internet plan and I’m far happier because of it! Let me explain further…you might just change your mind!
Devices of Consumption Not Creation
First off, mobile phones and associated mobile internet plans are mainly devices of consumption, not creation. Have you ever write a novel on your phone? How about programming the next killer app? Composing music? Building a website? Designed a building? Probably not.
Besides a few emails or photos, mobile phone usage is about consuming media. Things like music playback, streaming video, web browsing, and playing silly games on the toilet are its most common uses. That’s just entertainment!
Now ask yourself, are you really willing to give up $360 a year ($30 per month) for even more entertainment?
Is your financial freedom worth so little? For $30 a month, I can use wifi instead. If wifi isn’t available, I can wait one hour (or two) until I do have wifi.
I saved that money and invested it instead! Mrs. Tako and I have done this for 15 years now. That money, compounded at 7% for 15 years amounts to over $19,000.
I already spend too much time on computers. I’d rather have $19,000 than a few more minutes of web surfing or checking emails.
The World Has Changed
Some people might argue that the world is now more connected, and we need mobile internet service plans to keep us connected….
I totally agree that the world is more connected now, and the internet is a fantastic resource for…well…all kinds of information! But there’s absolutely no reason we need to be constantly connected to it.
In most first world countries, the vast majority of the population is going to have wifi at home. If you work in an office, most workplaces now also have wifi. Those laptops used for actual creation need wifi. So right there you already have wifi internet access for 21 hours of your day — roughly 87.5% of it.
If I go to the library, the airport, a coffee shop, the hospital or numerous other institutions there is already free wifi available.
Do we really need to be connected 100% of the time? Is it really necessary?
I get it, I really do. Smart phones are pretty cool. I love using mine to take pictures of the kids, or use the calculator app to do some quick math. Having so much computing power in such a small package is fantastic, but I don’t need an internet connection all the time.
As Mrs. Tako and I have found, there are lots of ways to get by without a mobile internet plan. Here’s a few alternatives that we use:
Navigation — Offline navigation is actually really good these days and it’s built right into the Google Maps application. We used it extensively on our Hawaii trip and frequently around town. Assuming you download the map data ahead of time, there’s absolutely no need to have a mobile net connection for navigation. It’s free!
Price Comparisons — A lot of people will use their mobile phone to do price shopping comparisons while actually inside the store. You know, you see a good price in the store and think, “I wonder if it’s cheaper online?” You know what, 90% of the time Amazon or Ebay is going to have a cheaper price than a retail store. There’s a reason why brick-and-mortar retail sales have been so shitty lately — ecommerce might just have a more efficient business model.
Most of the time impulse purchases are a bad idea anyway. Without a mobile internet plan, we just wait until we get home to do price comparisons. This is actually a great way to stop unnecessary spending — remember my Tools For Temptation? Patience will save you more money than paying for a mobile internet connection.
Music — I know music services like Spotify, Last.fm, or Pandora are very popular now…but in the old days people still managed to have music on-the-go without paying for a monthly service. However did they manage that? Do yourself a favor — skip the music service and skip the mobile internet. Even more savings!
Notes and Lists — One of the best list and note taking apps we use is Google Keep. We frequently synchronize notes and lists between devices and people. The best part is – it’s free. The service works offline too. A quick sync when we have wifi is enough to keep all of our notes and lists in sync.
And Many More — There are work-arounds for almost every possible situation! If you’re into financial independence like us, finding alternatives to over-priced mobile plans is actually something you might enjoy!
An Unpopular Idea
The blog trolls are probably going to disagree with me in the comments. I don’t mind! They just prove my point! Denial isn’t just a river in Egypt!
I fully expect this post to be pretty unpopular — it’s a good thing I don’t write posts to gain popularity! (I don’t try to optimize for search engine traffic either!)
Breaking an addiction (or dependence) is a very difficult thing to do. Much of society is completely addicted to their mobile phone plans. They would rather suffer in wage slavery than give up constant internet access.
My counter argument is actually a question – If mobile phones with internet plans are so fantastic, then why are productivity growth rates declining?
In the past, as new technology has been introduced to society, we have seen great productivity growth that boosts the output (on average) of every worker.
At roughly the same time as the mobile phone hit critical mass, statisticians began seeing these declines in productivity. Are people so glued to their phones they get less done? It’s a possibility. There’s a lot of good theories. Right now, no-one truly understands why this is happening.
The pace of technology advancement has continue unabated for the past 8 years, and yet we’re not producing much more.
Maybe we should try removing what we don’t need instead…
[Image Credit: Flickr]