$138,860.74 | The Long-term Cost of Smartphones

Pictured above:  My running mates before a late dinner at the 2014 Bourbon Chase, a 200-mile relay race through the heart of Kentucky.

The Spend | Smartphone

When it comes to communications, the smartphone is the best invention EVER! Of course, these little pieces of magic will set you back more than a couple Benjamins, as the latest, greatest renditions routinely sell for more than $600.

Fortunately, Verizon, AT&T, and the like have taken a play out of the rent-to-own playbook and setup contracts with monthly payments to make these devices easier to purchase. At present, Verizon lists the top-end Samsung Galaxy S7 Edge at $33/month on a 2-year contract.

Now, you can just as easily purchase a pretty decent smartphone at a fraction of this price. Attractive alternatives can be had for as little as $8/month, a difference of $25/month.

The Opportunity Cost | Retirement

While $25/month doesn't seem like much, over the course of a year, that amounts to $300, and over the 2-year contract, that comes out to $600. And, while most electronics go down in price with time, smartphone prices have remained remarkably steady at north of $600 for a top line phone.

So, what would it look like in retirement if you bought the second-tier phone instead of the top of the line?

Here are the numbers:  $25/month could be saved for retirement. That $25/month turns into $300/year. That $300/year invested for retirement on a pre-tax basis turns into $429.06/year. With a fifty cents on the dollar match from your employer, that becomes $643.59/year.

In other words, if you skip the latest, greatest smartphone, you can add $643.59/year to your retirement. $300 is the after-tax spend, $214.53 from your employer's matching, and $129.06 from tax deductions.

The Long-term Opportunity Cost | 30-Year Value

Still not convinced that smartphones are expensive? Let's say that you make this trade, as I do - you buy second-tier phones instead of the best smartphones. If you invest this money each year for the next 30 years, you end up with $138,860.74.

That's ONE HUNDRED THIRTY-EIGHT THOUSAND EIGHT HUNDRED SIXTY DOLLARS AND SEVENTY-FOUR CENTS.

That's for one phone. If you're married, you can double that amount to $277,721.48 - more than a quarter million dollars more for your retirement.

Spend Smart | Feature Shopping

When you're shopping for a phone, do yourself a few favors. First, shop by what you need rather than simply buying what's shiny and new. Top-end smartphones have a multitude of features that most will never use. Second-tier phones are optimized for specific features - a better camera, bigger battery, etc. Get what you need.

Second, don't buy phones on contracts. Many who are all too happy to make fun of rent-to-own stores happily sign-up for the same deal with their phone carrier. Pay cash for your phone and be done with it.

Finally, when you select a phone that suits your needs and pay cash for it, increase your retirement plan contributions. This will capture the money you're saving on your smartphone purchase and set you up for retirement. Get started when your next contract expires - better still, set a reminder in your calendar and get it done.

[click here to see the numbers]