3 ms·
Every time this topic comes up I wonder about the role of delayed gratification. For example, not signing a 2 year cell phone agreement and saving up to buy one
by matt_wulfeck 10y ago
Every time this topic comes up I wonder about the role of delayed gratification. For example, not signing a 2 year cell phone agreement and saving up to buy one in cash.
That kind of mentality might not make you wealthy, but it surely won't make you poor.
- dpark 10y agoThat's a poor example. I switched to buying my phones in cash and overall I'm now paying more when I total everything up. Not buying on credit would be a more useful example. But to answer, I don't think it matters much at all. Saving can certainly increase your wealth. It won't do much for your income unless you're already quite wealthy. Earned income is the biggest factor for economic status. If you're poor, your income is low. If you're wealthy, your income is almost certainly quite high.
- crpatino 10y agoThis is correct if you live in the US, where interest rates are artificially low. If you try to live like that in a country with double digit mortage rates, and credit card rates in the ballpark of 30% for people with an established good record, then you are setting yourself for debt servitude regardless of your eventual income.
- dpark 10y agoI'm really not sure what your point is. Whether or not saving to buy vs buying on credit is the smarter option has very little to do with whether you're in the top income quintile or the bottom.
- matt_wulfeck 10y agoThe GP was about delayed gratification. How much does a new iPhone cost? 1 year old model? 2 year old model? 3?
- dpark 10y agoYou didn't say anything about buying an OLDER phone. That's not really delayed gratification. That's just being frugal. And none of this is relevant to income inequality, which is what the article was discussing. If your income is $15k/year, you're still in the bottom quintile regardless of how much you save. You said you wonder about the role of delayed gratification. The answer is that there is no role. If you earn nothing, you're still poor even if you wait to buy stuff. You might be less poor than your neighbor who buys on credit, but you're still poor.
- scarface74 10y agoWhat's the benefit of paying $600 for a cell phone up front instead of paying $600 over two years on an interest free loan? Most cell phone companies have moved away from subsidies to interest free payment plans. That being said, you can get a perfectly acceptable unlocked Android phone for less than $100.
- matt_wulfeck 10y agoI see your point, but subsidies are invariably offered on extremely expensive plans and that cost must be calculated as an overall expense. Compare with buying the phone outright and using a pay-as-you-go alternative.
- scarface74 10y agoI have T-Mobile, but I think most of the major carriers work the same. My bill is simple to calculate -- phone plan + payment plan. If I bring my own phone, there are no extra fees. If I buy a phone on a payment plan, my bill is my phone plan + (phone cost/24).