2 reasons why the latest base model iPhone 11 will cost you AUD$3,516.09/USD$2,462.30
A dollar is not really a dollar.
It’s that inflation shenanigan innit? Yeah not really. It’s something worse. Something almost everyone unequivocally hate to pay yet is privileged to pay. 💰 Taxes 💰. When you buy something, what you’re really doing is purchasing it with after tax dollars. For example, the base model iPhone 11 costs AUD$1,199.
How much do you think you would have had to earn to buy the iPhone? AUD$1,199? Not quite. Let’s say your tax rate is 30%, you would’ve had to earn AUD$1,712.86 in pre-tax dollars, let the government take its piece of the pie (AUD$513.86) before you take home AUD$1,199. 😱 Think paying AUD$1,712.86 for the base model iPhone 11 is bad enough? Let’s take a look at the next reason.
Opportunity cost.
A lot of what we do in life is an exchange of our most valuable resource: time, for things. Should I watch Netflix or work out? Netflix. Should I buy portable trebuchet or save the money? Err. Tough call. Should I buy an iPhone or invest in Apple? 🧐 Maybe invest?
Let’s say you’ll baby and keep your iPhone 11 for around 3 years. As I’m not a time traveller and I presume neither are you, let’s use the Apple stock price from 3 years ago for comparison sake. Had you invested AUD$1,199 in Apple (AAPL) as of the 1st of January 2017 at USD$117.91/AUD$155.82 per share, you would’ve gotten 7 shares with some spare change for a really nice meal. Apple’s stock reached a meagre USD$300.35/AUD$428.89 per share as of the 1st of January 2020.
That’s a lot of numbers, what does that mean?
That means that the AUD$1,199 that you invested on the 1st of January 2017 would be worth AUD$3,002.23 as of the 1st of January 2020, more than double what you invested. Now not all companies are like Apple and the stock market does not behave like this on a regular basis however this is incredibly important to illustrate a point: what you think you pay is not really what you pay.
That AUD$1,199 that you thought you were paying for your iPhone? You actually paid AUD$3,516.09 for it.
FML.
Unfortunately, this does not apply to iPhones alone. It applies to practically everything you spend your money on. Think you’re getting a massive deal from a sale? Think again. 👆. This post isn’t to discourage spoiling yourself from time to time. Everyone has their vices. Some obsess over the latest iPhones 🙋🏻♂️. Some like to travel. Some enjoy the odd <censored>. We’re not here to judge.
What this post encourages is for us to actively think of how much value we are getting from our purchases before we make it. Is it worth the true dollar amount that we’re paying for it? If it isn’t, maybe think twice before you make that purchase. If it is? Boy oh boy, go nuts and enjoy it!
“You can afford anything, just not everything” — Paula Pant from Afford Anything
