Come September 16, the latest reiteration of the iPhone – the iPhone 7 – will hit stores here. And as with previous iPhone debuts, you can expect very long queues, the quintessential breaking of piggy banks and for some, even the selling of kidneys.
For enthusiasts, the iPhone is not just a phone, it is a symbol status and a must-have fashion statement, even if it costs more than 1/3 of their take-home salary.
In Singapore, prices of an iPhone 7 range from S$1,047 to nearly S$1,600! Meanwhile, the average post-tax salary here sits at roughly S$4,230.83.
Here is a full-list of iPhone 7 prices in Singapore:
Sure, owning a brand new iPhone gives you some bragging rights, but before you fork out for that 256GB iPhone 7 Plus, check out these seven options where you can put your money into good use and actually earn some cool returns!
1) Clear your credit debt
Credit card interest rates in Singapore hover at an average of 26% per annum, so even a small amount of debt could snowball out of control in a matter of months!
So if you have outstanding credit card debt of about S$1,600 for example, you should aim to clear it as soon as possible to avoid paying a ridiculous amount of interest.
For instance, if you set out to pay off a debt amount of S$1,600 over a six-month period (with an interest rate of 26% p.a.), you will have to make a monthly repayment of S$242.40, and pay an overall interest of S$145.28.
In comparison, if you pay off the same amount of debt in 12 months – you pay less in monthly repayments at S$152.85, but end up paying significantly more in interest, at S$234.18.
2) Put that money into savings bonds
Why put nearly S$1,600 on a smartphone that depreciates in value every month, when you can make the same amount of money grow and grow?
For instance, if you put that money in Singapore Savings Bonds, you stand to earn up to 1.75% effective return per year. Here’s how much you stand to make with an initial investment of S$1,500.
Source: Singapore Savings Bonds website
For SSB, application and redemption requests must be made in multiples of S$500, and using cash.
Normally, bonds have a set interest rate and investors can lose any returns earned if they cash out too early.
The good news is, you will not have this problem with SSB. One of its key features is liquidity. With SSB, bondholders can get their money back in any month, with no penalty imposed.
3) Invest in unit trust funds
You can get the same amount of money you plan to spend on an iPhone to work harder for you by investing in unit trusts.
The beauty of this is, you can start investing in these funds with as little as S$1,000. Also, when you invest in unit trusts, a fund manager will take care of your investment and you earn profit periodically. Returns will vary depending on your portfolio risk and your contract with your fund manager.
Example: The Allianz Dynamic Asian High-Yield Bonds fund has a YTD bid-to-bid return of 13.7% (as of September 4, 2016), and a six-month return rate of 11.12%.
So if you put in S$1,600 a year ago, your returns would come up to S$219.20 today. Meanwhile, if you’d invested the same amount some six months ago, your return would come up to S$117.92 today.
However, it is worth keeping it mind that unit trust investments are generally recommended for long-term, so you might want to consider putting your money in a fund for a longer period.
4) Invest in real estate
Property is crazy-expensive, but you can claim a stake of the property market and earn returns with Real Estate Investment Trusts (REITs).
For instance, Capitaland Mall Trust (C38U) has an annual dividend yield of 5.40% in 2015, and a trailing twelve months (TTM) yield of 5.45%.
So if you’d invested S$1,600 in the fund a year ago, you would have made a cool S$86.40 in just 12 months. Meanwhile, your brand new iPhone would have lost a huge chunk of its value the second you open its box.
5) Buy gold
Instead of getting an iPhone 7 in gold, why not go for the real deal instead?
Gold has traditionally been a safe haven for investors during times of volatility. The year 2016 is no different – according to Bullion Rates, the value of gold has gone up by some 15.17% from the beginning of the year till September.
Source: Bullion Rates
So if you’ve bought 49.19 grams of gold worth S$1,530.05 in early January 2016, by September, you would have earned a cool S$232.10 return!
6) Equity crowdfunding
You could even help to kick-start the next big thing with the money you would have used to pay for an iPhone with equity crowdfunding.
For starters, equity crowdfunding lets people (i.e. the “crowd”) invest in an early-stage unlisted company in exchange for shares. So, a shareholder will have partial ownership of a company they invest in. The shareholder also stands to make profit should the company do well.
A popular success story when it comes to equity crowdfunding would be the case of Uber. The ride-sharing giant, which started in 2009 with US$200,000 in seed funding, is estimated to be worth over US$50 billion today.
According to Fortune, early investors of the app would have seen a 2000x return on their initial investments by 2014! The rate of return suggests that even a small investment of US$1,600 would have been worth at least US$3.2 million today.
However, investing in unlisted businesses do pose a set of risks, and it is important that investors understand this. That said, a reputable investment crowdfunding platform will be able to not just list start-up businesses, but also to regulate portals that sell these crowd-funded shares.
7) Look into buying public stocks
Everybody knows that share trading is risky, but the chances of you getting a return is still better than buying an iPhone 7.
If invested wisely, shares can be a lucrative source of short-term income. Of course, high returns also entail higher risks, and your risk appetite will determine how much risk you can take on.
Younger investors with a higher risk appetite can consider taking on riskier stocks. Moreover, if you buy stocks of your preferred company and if the value of it increases over time, you will get a dividend.
Aside from receiving dividends, you can make a buck by selling the stocks at a higher price at a later date. So if you bought 500 shares of a company at S$1.5, and sell it at a later date at S$1.6, you make a profit of S$0.10 per share. If you had 500 shares, you would make a profit of S$50.
So here you go, if you’re not particularly keen on splurging money and chose to save instead, you can start growing the S$1,600 and start earning returns soon!