Owning an iPhone X: is it really that difficult?

It has been more than a decade since the first iPhone was launched by Apple. Recently, the company launched its next flagship model – the iPhone X.

The updated version hasn’t disappointed many people, thanks to its sleeker features. For example, iPhone X has 5.8″ OLED display, faster A11 Bionic processor, glass body, Face ID, edge-to-edge display, wireless inductive charging, Animoji and much more. However, the sleeker look comes at a cost: Apple’s latest smartphone has been priced at an eye-popping Rs 1.15 lakh. Its exorbitant pricing has spooked many people in India. But, is it really that difficult to buy an iPhone X?

Are short-term goals unachievable?

Let’s consider the pricing of iPhone X (Rs 1.15 lakh) as your short-term financial goal. Now, there are two ways to go about achieving this goal — take a loan or invest. If you take a loan, you can buy the phone right away. But, you need to keep in mind that you will have to pay an interest on the loan amount.

On the other hand, investing in a mutual fund scheme can help you buy the phone in a few months’ time. To top it, you wouldn’t have to pay any interest. In fact, you would be earning an interest. This is what Albert Einstein meant when he said: “He who understands it (compound interest), earns it; he who doesn’t, pays it.”

The numbers

Say, you buy an iPhone X on an EMI. Your EMI amount would be approximately Rs 10,235 for 12 months at 13% interest rate. The total cost of the phone would be around Rs 1.22 lakh.

But, say, you take the systematic investment plan (SIP) route to invest in a debt mutual fund. A monthly investment of Rs 10,000 in a debt fund has the potential to fetch you Rs 1.25[1] lakh at the end of 12 months.

Investing in equity mutual fund could be even more lucrative. If you invest Rs 10,000 in an equity mutual fund through an SIP, you could earn as much as Rs 1.33 lakh[2]. Therefore, mutual funds can be a good idea for wealth creation.

Mutual funds for iPhone X

Mutual fund investment through SIP can be very effective when it comes to achieving your short-term financial goal. As the aforementioned calculation suggests, investing in a mutual fund scheme can be more prudent than if you get impatient and take a loan.

So, if you have a year or more to achieve your goals, you can opt for equity mutual funds. If you need to achieve your goals within six months, it is advisable that you choose to put your money in short-term debt funds.

Also, say you have the money to buy the 64GB version of iPhone X. Instead of buying it right away, you can choose to invest the amount in liquid funds. You can then choose a systematic transfer plan (STP) to equity mutual funds, wait for a year and buy an upgraded iPhone X with 256GB memory. Therefore, by being patient, you can choose to buy the upgraded iPhone X version in a few months’ time.

To sum up

While buying an iPhone X could be an expensive affair, it doesn’t need to be an unfulfilled dream. You too can own the coveted gizmo through mutual fund returns. Mutual Funds Sahi Hai! Even for buying an iPhone.

Know more about Goal Based Financial Management and live your dreams!

[1] As on September 29, 2017, the category average annual returns of debt mutual funds were at 7.61% according to the AMFI-Crisil performance report Source

[2] As on June 30, 2017, the category average annual returns of equity mutual funds were at 19.83% according to the AMFI-Crisil performance report Source

Author: Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles by others on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com