I ran a simple simulation: what if, instead of buying a new iPhone every year for each of the last 10 years, you only bought a new iPhone every 3 years and in the two years between each purchase, you bought a new iPhone worth of Apple stock (AAPL)?
Based on the value of AAPL in November 2020, you would have accumulated over $9,000 worth of Apple stock! This takes into account the trade-in value of your iPhone each time you upgrade.
The basic idea of this simulation is that in early November of each year, you would either purchase the iPhone released that year or you would purchase an amount of AAPL stock worth the value of the year's latest iPhone less the trade-in value of the previous year's iPhone. The simulation begins in 2011 with you purchasing the iPhone 4S and then for each of the next two years you would purchase AAPL stock instead of buying a new device. This process would repeat over the ten years from 2011 to 2020.
Here are some assumptions used in the model:
My main takeaway with this little simulation is that there is great power in replacing a bit of consumption with investing that compounds over time. Over the last 10 years, you still would have been able to enjoy Apple's cutting edge devices like the iPhone 4S, 7, X and 12. But squeezing some extra life out of each iPhone would have left you with over $9,000 in Apple stock that cost you only $2,000!
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