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Have you ever seen or perhaps experienced having friends and acquaintances whose salaries we know are probably not much, just enough, and maybe stuck at the minimum wage, but their iPhones are always the newest, or even at some moments we see them being able to pay installments for luxury goods that seem impossible if we calculate their income. We often see this phenomenon, and our first reaction, and the reaction of people around us, is usually to judge. "Basic materialist slaves, prioritizing appearance over wallet contents, just to look rich when they're actually poor." It's as if their choices are simple because they are stupid, can't manage money, or just want to show off. We often stop there, labeled as stupid and lazy. But what if I told you the problem is much deeper than just pride? What if I told you that behind the flexing of iPhones, there's a psychological burden, social pressure, and even a way an economic system bullies our minds in silence? Today, we will try to uncover the hidden reasons why middle-class poor people sometimes appear irrational by choosing luxury. Welcome to Psychology of Finance by 1%. Enjoy. Welcome to psychology of finance. One problem with poor people is that their brains find it hard to think long-term. To understand this, we need to get into their heads first. There's a concept called "Scarcity" written in a book you can see on the screen. The point is, a state of lack or scarcity, whether it's a lack of money, time, or social connections, fundamentally changes how our brains work. For people lacking money, they become very good at managing small amounts of money to last for a week. They know exactly how to, for example, dig a hole and fill it. And they even know how to find the cheapest food places. But they can't think long-term. As soon as they get a bonus from the office, like THR, they immediately think about paying installments for an iPhone. This flexing or showing off luxury goods can seem more rational. Why? Because when your mental capacity is completely drained by the stress of poverty, the fleeting psychological boost and social validation you get from buying expensive items feel much more valuable than saving for the future. Not to mention, owning an iPhone is a source of pride in itself. According to this book, an iPhone can be a symbol of social status because its price is too high compared to the actual value of the phone itself. It's like this, many phones actually have better specs than iPhones and are much cheaper. But why is an iPhone ultimately bought? Because the goal isn't to buy a good phone, but rather to buy a phone that everyone knows is expensive, and that can be a source of pride, as if signaling to society, "Look, I can afford expensive things." This is why decisions that seem foolish from our perspective, who might be well-off, make perfect sense from the perspective of those who are middle-class poor. So, don't be surprised if many poor people use loan apps, take out loans, and immediately buy a new phone even if they have to pay in installments. Because all these instant rewards they get feel more important than the abstract interest costs that exist in the future. Their capacity to think about long-term consequences is gone. They can no longer think about that and their focus is only on the short term. The next question is, is an iPhone really worth buying? We will try to discuss this in the next section. I will discuss it from two perspectives: visible value and actual value. From a visible value perspective, the iPhone is a strong symbol to represent the upper class. Why? Its classy design, its price which is a symbol of success, and Apple's super exclusive ecosystem. So, when you buy an iPhone, you're not just buying a phone, you're also buying a set of intangible values that can indicate your social and economic class. Apple is also smart; they don't advertise the main specs, but they emphasize their products as a lifestyle. This condition is further strengthened by how Apple advertises its products. They show how good-looking, creative, and successful people who use Apple are in their ads. There's even an iconic photo of Lady Gaga using a MacBook. This photo indirectly signals that people like Lady Gaga use Apple, and it's creative people who ultimately use Apple. However, from the perspective of actual value, buying an iPhone might not be that worthwhile. Even for iPhone 17, 16, 15, it might not be worth it. Why? Because the upgrades given are actually mediocre. For a better understanding, you can try looking at this table. [Music] Here we can see from iPhone 7 to iPhone X, the innovation was big and massive, like the home button was removed, the all-screen display and OLED technology for the first time, and also the introduction of Face ID technology, which if you can see the design here, I'm showing it on the screen, from iPhone 7 to iPhone X, the design is vastly different. But if you look from iPhone X to iPhone 16, the appearance is still quite similar. Maybe the only difference is in the notch. Like this notch even disappeared in newer series. But apart from the notch, there are no major updates like the update from iPhone 7 to iPhone 10. Actually, on the iPhone 14, there's the Dynamic Island feature. But this is more of a feature, not a really big innovation. And also, at the iPhone 17 launch, we can see another significant design update, but actually, the material was changed from titanium to aluminum, which is cheaper, and you can also see the controversy of scratches on the back, there are marks of scratches. And from this table, we can see that what was actually worth upgrading from iPhone 7 to iPhone X was a great technological leap compared to upgrading from 16 to 17, which is mediocre. Although there are upgrades, often parts are sacrificed. Besides that, instead of forcing yourself to change iPhones every year, it's better to wait a few years to buy an iPhone. Why? Because the price of iPhones depreciates every year. Based on the data I found here, iPhones can drop in price by 20 to 25% in the first year and 40 to 50% in the second year. With such mediocre feature changes like the 15, 16, and 17, it's better to just wait until the price of the iPhone drops. So the value for money will be more worth it. By the way, 2 years ago, 1% discussed how Apple manipulates consumer psychology so that we always feel FOMO to buy and change iPhones every year. For those who want to watch, just click the link in the top right corner. The next question is, when is the right time to buy an iPhone? Okay, guys. Before we continue, I want to give you some information if you're feeling confused, feeling stuck with life lately. Whether it's about career, education, relationships, family, marriage, or other personal matters, 1% now offers Premium Psychometric Tests. Within Premium Psychometric Tests, there are various test options designed to help you understand yourself better so you can make better life decisions. These psychometric tests combine various types of professional psychological tests. So every time you buy, you will get several psychometric tests combined into a report of tens of pages for accurate and personalized results. You can read these tens of pages. And the coolest part is, if you don't understand or have questions, you can get further insights through a consultation with an expert from 1% directly based on your test results. Just visit 1.bio/psikotespremium for more information. The right time to buy an iPhone is when you are truly able. Not just when you want it. Able here means you buy an iPhone with your "cold money." Imagine money that if you lose it now, you can still eat and pay all your bills tomorrow without worry. Not money from loans or maxed-out credit cards. The problem is, waiting to be able to afford it sometimes feels very long. Meanwhile, temptations might come every day. Here's where we need strategy, not just desire. And I will give you three strategies you can use to buy an iPhone so it's more worthwhile. Strategy one: create a pride fund. Instead of fighting the desire, it's better to try to manage it. Try, for example, in your budgeting, create a new budgeting category. Let's call it, for example, a pride fund. For instance, if you want an iPhone worth Rp24 million, challenge yourself to save Rp2 million every month for a year specifically for this phone. This way, you have a clear saving goal and also give yourself time to think whether I really need an iPhone or am I just visually hungry. Pride strategy two: master the art of buying quality used items. Throw away the stigma that buying second-hand items is bad. Because specifically for iPhones, buying used is one of the best smart moves. Besides what I've explained earlier about iPhone price depreciation, Apple provides very long software update support, 5 to 6 years. This means an iPhone that is 2 to 3 years older still feels relevant and fast in these times. You can get the pride at a price that might be only half of the new price. The important thing is to be thorough when checking the battery health, aim for above 85%. Ensure all parts are still original. You should also check your IMEI on the Ministry of Communication and Information website to be safe from blocking. You should also check the seller's reputation. Don't be tempted by prices that are too low below market price. Now, if you want to level up, there's another even better way: buy a used iPhone in Japan while on vacation. There's a very famous used electronics store in Japan called Janpara. You can also check their website, janpara.co.jp. Their advantage over Indonesia is that they are super transparent. On their website, you can see the physical condition of the iPhone is given a grade. For example, there's grade A which is very smooth like new, or grade B with minor scratches, complete with photos. So you know exactly what you're going to get. How to do it? First, you can check the Janpara website from Indonesia. Try to reset which model you want to buy and its price. Second, you can choose your destination city. Try to see which branch has the stock you're looking for. For example, if it's in Shinjuku, Tokyo. Then you can plan your vacation destination to Shinjuku. Third, plan your vacation. You can try to arrange your Tokyo itinerary and choose one of the cities that has the iPhone you're looking for at a price that also matches your budget. This can be a smart way to get high-quality goods with clear transparency, plus get a vacation experience that isn't too burdensome in Japan. The last and most logical strategy is to change the iPhone from a pride tool to a production tool. The method is simple, just ask yourself, can I use this phone to generate money or not? For those of you working in creative industries, such as content creators, marketers, social media specialists, the answer can be yes. Because iPhones can actually improve the quality of our work, as the visual output becomes better, which in turn can increase cash flow. So in some cases, buying an iPhone can also be an investment if it's used for professional or business needs. But you also have to be honest with yourself. Are you buying this to increase your income, or is this just an alibi to boost your image? At the end of the day, we live in a world that designs us to believe that luxury is a logo attached to an item or the admiration in the eyes of others. But what if we try to redefine luxury for ourselves? What if luxury is being able to sleep soundly at night because there are no notifications from loan apps demanding payment? What if luxury is the freedom to say yes without hesitation when our parents suddenly need financial help? What if luxury is the peace of mind from having enough emergency funds? So that when a disaster strikes, our world doesn't immediately collapse. Or perhaps true luxury is having the choice to resign from a toxic job that drains our mental health. Because we have savings that can back up our lives for several months to come. These are all levels of luxury that cannot be shown off on Instagram stories. But you can feel their impact every second of your life. Ultimately, an iPhone can only impress others momentarily, but financial freedom is a luxury you can enjoy every day for yourself. That's all for today. Don't forget to be happy and don't forget to live fully. Thanks. [Music] [Music]