I was talking to my neighbor about upgrading my internet service recently and learned that he, like me, is a tech geek. This led to a conversation about cell phone service. He told me he uses Visible. It’s an MVNO that uses Verizon’s network and it has a unique “party plan” that makes it dirt cheap for unlimited talk, text and data.
I’ve wanted to change my cell service for quite sometime. I had Airvoice wireless for years before I went on the road. It was $20-$25 a month for talk/text/ and 2 GB of data. That worked well for me and my wife.
I had to leave Airvoice when I went on the road out West because it relied on AT&T’s network. Out West, Verizon had the best coverage so I reluctantly switched to an expensive Verizon postpaid plan. Coverage, reliability and availability were more important than savings. My plan was ~$100/month.
As soon as I left the road and settled into Raleigh, I switched to a Verizon prepaid plan for $50/month. I looked at alternatives several times since then, but all would cost $40-$50/month and my Verizon plan came with 16Gb of data so it wasn’t worth switching.
Still, it bothered me to pay $50 a month when I only talk to a handful of people a week and most of my data use is when I’m home and accessing WiFi through my home Internet provider. I don’t need 16Gb and never used much of it.
Based on my neighbor’s recommendation, I checked out Visible and made the switch. My monthly cell service fee just dropped from $50 to $25.
Saving $25 doesn’t sound like much until you frame in terms of income generation and investments.
To have investment returns pay for my Verizon service into perpetuity, without depleting my investment, I needed to have roughly 25 times the annual cost in the market. (Google the 4% rule for a detailed explanation).
Verizon Annual cost is $50/month x 12 months = $600 annually.
Investment required to pay for Verizon service is $600 x 25 = $15,000.
I just cut that in half.
Visible Annual Cost is $25/month x 12 months = $300 annually.
Investment required to pay for Verizon service = $300 x 25 = $7,500.
Before I lived solely off of investment income, I would do quick math on purchases to calculate how much I had to work to pay for something.
Back when I was early in my career, I made $18k/year and my hourly “take home” pay was ~$5/hr. I bought a Honda Civic and made payments of $300/month on it. I had to work 50 hours a month just to pay for my car! And that didn’t take into account the increased cost for insurance and maintenance. In hindsight, I couldn’t afford that car. I should have driven my paid off Stevemobile until it fell apart.
As I moved up the career ladder and became more speedy and eventually more frugal, I’d think about spending in terms of what I made in a day.
In my best earning years, I made $500-$1000 a day. Wow. When thinking about that, saving $25/month seems almost inconsequential.
It wasn’t though because when I was in these peak earning years, I plowed every spare cent into paying off debt, building an emergency fund and then investing.
I never reached 25x my annual expenses in investments.
Before I could, I lost my job. I hadn’t intended to retire because I knew I couldn’t afford the lifestyle my wife and I lived with my investment returns. I had worked extremely hard for decades to ensure my wife and family would be taken care of for the rest of their lives, no matter what.
But then my wife was diagnosed with lung cancer. Eight months later she died.
My living expenses dropped significantly since then and I have never returned to work. I am not worried about running out of money because I have a plan if I do.
Somedays I think about returning to work. I even peruse job listings. But nothing seems interesting enough to give up the life I have today.
So instead, I have designed my life to save $25 a month.