Here this is how it is: Because we're getting Hotspot, you have EVERY feature. That means unlimited internet, unlimited text messaging, unlimited free calling to the five people you call most, free email and instant messaging. The works.
In other words, you're only limitation is the phone you get. The one I showed you can do everything above, and is free.
You can also get a phone that does everything above, for $100. The only difference is it does it $100 better.
So it will have a bigger screen, keypad, better music player-- It is like a BMW vs a Ford. They both can do all the same things but the BMW does it better.
Personally I'm going to get the free one because I'm cheap and it does everything I need.
But if you want to buy a $100 or $200 Smartphone, you can and there are a bunch of cool ones there. And it is a killer deal because if it was not a family plan you would be paying $100 a month for all the features you're getting for free. So from an economic perspective it would pay for itself several times over.
But then again, if a free phone does all you need, and even if a $200 smartphone is a better deal, wouldn't you rather pocket the $200?
$200? That is what, 2/3 of a X-Box 360. Put it in the bank and let someone other than pop manage your money and you can get 10% on that easy. You should know that you studied econ.
So, let us say you take that $200 right now and invest it in a mutual fund. 10% later in a month you will have $240. The next month, $264. The third month, $290. Fourth month, $319.44. So you understand this concept of compound interest, right?
So go further. At one year, you would be looking at $684.75. Two years, $2149.03. Five years: $66,432.36. Ten years: $7,798,551.13. Twenty years: $97,698,918,139.35. Check the math I hope I made a big mistake because that is a lot of money.
OK, so you're about 20 now. This would be a good time to study the stock market. I attached a graph of the US stock market from 1926 - 1999. The average return over those 70 years was 11%. That has not really changed, and as long as aliens do not take over the earth it probably will not for another 100 years.
People like Pop will tell you it is too risky and tell you about the stock market crash of 1929 and about "Black Thursday" or "Black Tuesday" and how the stock market lost 90% of it's value in one day because of a myriad of untimatley completely irrelevent factors that people spent their entire lives studying.
But the fact of the matter is this: If you invest in a solid and extremely diversified mutual fund right now, today, July 9th, and have the patience and understanding and most of all disipline, nothing you do matters.
Tomorrow, July 10th, could be "Black Wednesday". The greatest stock market crash of all time, only this time the market loses 95% of it's value and your $200 is now $10.
If you following my advice and put that $200 where I told you to, and one day later you only have $10, what are you going to do? If you are like 99.999% of people, you are going to get pissed and take your remaining $10 and buy a used video game.
But if you realize that this stock market crash like every other one will fully recover in 10 years, 10 years later your going to be back to $200. And then because of these things with names like math and history and statistics, in the next 10 years the opposite thing is going to happen and the market is going to make huge gains and all of a sudden instead of seeing losses of 90% in ten years you're going to see gains of 90% in ten years.
And then maybe you will realize that as incredibly complex as economics are, you will have gained around 11% just like the graph says. Without lifting a finger.
But you might get cancer and die tomorrow, or meet the girl of your dreams and move to another country or develop bipolar disorder and reckllessly throw all that hard earned money away.
But as long as you have patience, discipline, and remember that it's only $200 we're talking about, you win.
Remember those billlions of dollars you will inevitabily make only cost $200. So get extra job to buy your fiance a ring instead of touching that money. Put it in an IRA, and put that IRA in Al Gore's lock box, and don't touch it until you're 59 and a half years old. Because at that age, all those potentially billions of dollars of money you made that would have required billions of dollars of taxes to the government, is yours tax free. It's like a billion dollar gift from the government for reaching the age of 59 and a half.
If that isn't a good reason to quit smoking I don't know what is. Hope to see you all at my 60th birthday party, because I think it is going to be one of the more memorable ones.