I’ve had the same cellphone for five years, and I will probably attempt to keep it one more year. Why? It still works fine.
I bought my Samsung Galaxy S8+ in July 2017 when my family and I left mainland Japan. I kept it through my tour in Pensacola, FL, and then for two years in Okinawa, Japan.
I finally left Okinawa (July 2022) with the intent to upgrade to a Samsung Galaxy S22 Ultra as soon as I got settled. But, things change.
The In-Debt-ured Servant
Welcome back to the Inflation Ate My Paycheck series (101, 102, 103, 104, 105, 106), where we discuss how to counter the effects of inflation.
Take a look around. The world is much different than in July 2017. Inflation has crippled the markets, and we have no idea if a recession will take hold.
For our part, my wife and I have continued to add income streams to our earned income jobs. We invest for dividends and have roommates and rental properties. I have an online business and blog; she learned how to do nails on the side.
To be honest, we are bringing in a fair amount of income. So, why am I hesitant to upgrade to a new shiny phone? Let’s do the math.
Create Daily Content
Math for income. I was all in on buying a new phone as I entered the Verizon website. My wife upgraded to the Samsung Galaxy S21 Plus earlier in the year; she is harder on her phones than I.
I looked at my dream phone, the Samsung Galaxy S22 Ultra. I love that it comes with a stylus, just like the Galaxy Note series.
I read the $33.33/month price tag and said, “That’s not so bad,” aloud. It’s $33/month for three years. Wow.
I immediately reconsidered. Yes, there is no annual percentage rate to extend the total over three years, but dang. When I bought my phone in 2017, there were only two-year options.
Real Estate is IDEAL: Income
Now, they want me to spend $1,200 on a cellphone. That’s a tough call for someone who doesn’t use their phone much.
How can you invest $1,200? So, how can you invest $1,200 instead of buying a cellphone? Or, can you invest in something that will pay you $33/month? Therefore, your asset is paying for your phone. Let’s look at some ways to invest.
Income Investing. My favorite way would be to put this money in high-yield income products on the stock market.
If I invested $1,200 into my favorite closed-end fund, PIMCO Dynamic Income(PDI), at a 12.84% yield, it would be amazing. That would pay me $12.84/month for the rest of my life.
Employment in the Metaverse
If I reinvested this income over three years, I would finish with a total of $1,724. I would MAKE $500 instead of spending this money.
Dividend growth investing. I could start a small dividend growth portfolio with this cash. My first five stocks would be the Total Market Index Fund (VTI), Abbvie (ABBV), Altria (MO), T. Rowe (TROW), and AGNC (AGNC).
This mix would give me a good amount of yield and growth. I could invest the entire portfolio into an M1 Finance pie. From there, the dividends would keep growing my pie over time.
YouTube channel. Now is the perfect time to start a YouTube channel. You can buy a GoPro camera and lights. Also, you can take an online course for under $1,200.
4 Years of Content Creation vs. 4 Years of College
From there, you simply start the passive income grind. You can make over $33/month in a year if you grind hard enough by producing daily content.
Start a blog. When blogging, it may take two years to earn $33/month, but it’ll come in more passively. Blogging costs roughly $200/year to maintain the site and other subscriptions.
I have the series for you if you don’t know which route to take between YouTube or a blog. It is called Blogging vs. YouTube (#1, #2, #3, #4).
Start a garden. With $1,200, you can start a large garden or herb garden. The products from your garden can earn you more than $33/month quickly.
Dividends vs. Military Retirement
Take your money seriously. For many of us, upgrading our phones is a non-issue. It’s just a way of life. However, we need to take our money more seriously.
Life is not about “being able to afford something.” It is more a question of how we can afford what we want. I’ll give you an example.
My books earn roughly $100/month on Amazon and about $5-10 on Draft2Digital. I could say I will buy a phone when my Draft2Digital royalties reach $40/month.
That way, my passive income from Draft2Digital is paying for my new phone. That motivates me to continue my grind and allow my books to do my work.
Passive Income from Creativity 106: Writing
How long can your phone last? I remember changing phones every year, but that is no longer the case. Phones are becoming more powerful, lasting longer, and updating less each year.
How long will your current phone last? Do you need to upgrade in 2-3 years? These are questions that you should ask yourself now.
Prepare for the worst. I am preparing for a deep recession. Whether it arrives or not, I am arranging my life as if it is already here.
I look at each bill or payment with a scrutinizing eye. I don’t like paying $33/month for three years. Paying off your phone in two years is a great accomplishment—waiting for the third year will be a chore.
Your First Home: Investment Property or Dream House
Phone payments have turned into the new car payment. People are now financing cars over six or seven years. Hopefully, phones do not extend out that long.
Conclusion. It’s your money, but it’s also your future. If you want fancy things, like new phones, ensure your passive income pays for them.
Don’t know where to start when it comes to passive income? Read my article “3 Steps to Live Entirely on Passive Income.” This article will help you understand how to convert your earned income into passive income.
You have much to learn if you think $33/month is not worth all the trouble. Every dollar should have a mission to set you free. How you spend your dollars is a reflection of your future. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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