The $2,000 iPad

WSJ ^ | 3/31/11 | Brett Arends

[harpu]

When someone asks me if I've changed my mind yet and now want one of Apple's new iPads, I tell them: "Well, even if I did, I probably wouldn't want to spend $2,000 on one."

They generally looked at me, baffled. "What do you mean, $2,000? I thought they started at $500." But I figure $2,000 is the minimum that Steve Jobs's new toy is going to cost me.

How come?

Simple. If I don't spend that $500, I'll invest it.

Historically, the stock market has produced average long-term returns of maybe 5% a year above inflation. (More on this below.)

At that rate, in 10 years' time my $500 will have grown to about $800. That's in today's dollars—after inflation. In 15 years it'll be about $1,000, and in 30 years, $2,000.

I figure I'll be retiring in about 30 years, which is when I'm going to need lots of capital. I can have the iPad now, or about $2,000 then.

Thanks, but I'll take the $2,000.

(If I were younger the iPad would cost me even more. If you're 30 or younger and you just bought one, congratulations: It probably cost you about $3,000.)

Yes, I typically do these mental calculations, at least in the back of my mind, for most things. I typically come back from the mall with no bags, gleefully clutching my future millions. (Warren Buffett, as Jason Zweig reminded us over the weekend, takes a similar view.)

[tacticalogic]

I would have gotten another iPad 2 if I didn't need to access and work on my work computer.

That's right in line with my original observations. If it's purely for entertainment, you can probably replace a laptop with an iPad. If it's for work, not likely.

[Domandred]

$2000 in thirty year? I’ll take the Ipad now thanks.

[Gun142]

Less than 1% of folks really need an Ipad, Ipod, cellphone, laptop, or any of the other wizbang gadget that have a 3 year life cycle.

.....without all these “look at me, I am important” toys.

Every person I know who had to get an iPad 'first' now all claim they're great dust collectors. Loyal customer base (some call "fanboys") bought them up but not that many people actually use them for day to day [anything].

Which is the point of the article - think about what you're buying; what it costs now and what it's worth to your future.
(I work in an office, which requires some travel during the week, with at least a dozen rather vocal\overbearing (typical) Apple consumers. They claim iPad is a toy. Not useless but not that productive. Money better spent on something else? Yes! Guns!)

[buccaneer81]

So when your ‘78 Datsun B210

I actually owned one of those. I taught myself how to drive a manual transmission with that car in the early '80s.

[smokingfrog]

A ‘78 Datsun B210 with 642,000 miles on it?

I’ll have some of whatever you’ve been drinking.

[Revolting cat!]

Toy. Buy it, I own the stock!

[harpu]

Duhhh...the story has nothing to do with (regarding its value or its worth to its user) the iPad other than using it as an example because it’s ‘hot’!

[harpu]

"Not BS at all."

AMEN

[buccaneer81]

$2000 in thirty year? I’ll take the Ipad now thanks.

Me, too. Even if inflation stays the way it has for the past 30 years, $2000 thirty years from now will equal $650 today. Whoopee. That'll get you a nice night out on the town in NYC...after living without for 30 years.

[buccaneer81]

Agree for the most part, but cell phones save lives.

[ThomasThomas]

If you buy the WSJ at the newsstand it would cost $595 a
year. You need to buy a new one every week. It cost $119 a year with a subscription but must own or rent a house to have it delivered to. Houses are very expensive. So if you want to retire rich. If you skip buying the WSJ and live on the streets you can afford an iPad. That is if I understand. His logic. Maybe this is why I don’t buy starbucks coffee?

[USNBandit]

My brother is one of the evil rich, selling software for a mobile tech company. He uses his iPad all the time for business presentations. It can’t replace a laptop if you really need a laptop. There are a lot of people that have laptops than don’t really need them however. i think most of the sailors that worked for me didn’t really need a laptop. They may need one now because so many Navy sites require CAC cards, but if you are just surfing the net and managing your media it is a nice piece of gear.

[tacticalogic]

I bought my son a Kindle for Christmas. He’s a “glow-worm bubble-head”. He loves to read and it’s perfect. Holds a ton of books, last weeks on a charge, and doesn’t take up much of the half a cubic foot of personal storage space you’re alloted on a sub.

[BreezyDog]

That’s funny I had a friend who taught me to drive a stick in a blue B210 in the early 80’s. I managed to get it stuck in a ditch. His parents weren’t happy. My friend Chip passed away last year. I miss him.

[spetznaz]

Thank you Lazlo! Couldn’t have put it better.

[babyfreep]

Nearly every person I know who has an iPhone, iTouch or iPad has them in their hands all the time.

I’ll admit - I probably wouldn’t buy one, but if I can win one, I won’t turn it down. :-)

[Tainan]

Asus eee Slate EP121

[Tainan]

[FightforFreedomCA]

ok, I’ll ask, what’s a “glow-worm bubble-head”???

[buccaneer81]

They were a great utility car. It was what it was, very easy to drive, great in cities (Boston) and cheap to run.

Now, I can't say I would have wanted to drive it coast to coast.