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Is having the latest model phone the best investment you could make?

While I was travelling today back from work, I noticed that a couple of college students had the latest model branded phone that would have definitely been high priced. I was shocked that they could afford something like that at an educational phase of their life. They were also talking to their friends that it has high quality and would be a good investment. It got me thinking to how many people think the same.

It has become a common perception that high branded and high priced items are the best investment to make. Investment is based on what you could afford and benefit from long term and not on what is the best thing that the market has to offer.

It has become more than an investment decision and has now crossed into the societal status limits. If you have a high branded phone or the latest smartwatch, you automatically reach a high societal status. This is also one of the reasons most people think branded items are the way to go.

Think about it for a minute. Most families heavily rely on EMI facility & credit cards these days. Buying a latest branded phone could cost around 70K-80K. Financial institutions averagely charge around 6% - 12%. Customers tend to end up paying an excess than the loan amount in the form of interest. However, if you could plan the expense in advance and save for it, you could even end up earning some interest yourself.

If you are unable to save or are in urgent need to buy the product, you could try a few tips to ensure you spend appropriately.

First of all, research the products in the market and decide on which features you would definitely want. Check the ratings and reviews of the product, Most salesmen tend to push you towards their high commissioned products, so unless you are sure of what you want, you might end up deviating and overspending.

The ideal rule for choosing your price range for such products would be that the price of the phone should not exceed 50% of your salary. This would ensure you don't fall into debt or borrow more than you could pay.

Instead of upgrading your phone to the latest model every now and then, try to utilize your products as much as possible. Every product has an effective life time after which you could buy a new one.

Take some time to rethink your purchase choices and try not to buy on a whim.


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