Awesome Investing Hack

I saw a really interesting article on SavingAdvice.com:

I don’t know a lot of things, but I do know when I see gadgets that I want. I really wanted to get the new Apple 3G iPhone, but I know if I can wait a few months, I will avoid the “early adopter premium” and can get it for a discounted price when all the hype and newness has worn off. It will also give them a chance to work out any bugs that might be there.

What did I do instead? I took the $199 and bought some Apple (AAPL) stock. This little investing hack has worked wonders for me. I consider myself pretty average, so if I’m excited about something, there is a good chance that there are a lot of other people that are also excited about it. I take this as my cue of “invest in what you know” and instead of buying the gadget that I want, I but stock in the company for the amount the gadget would have cost.

So when the iPod came out which I really wanted, I took the $399 price and placed it into Apple stock in October 2001. Even with the terrible stock market we are currently having, that $399 is now worth over $7000 today, a gain of 1700%+ over that time. When the original iPhone was released in June 2007, I wanted it, but instead placed $599 into apple stock. It’s now worth about $840 today, a 40% gain over that time. So when the Apple 3G iPhone went on sale last week, I took my $199 and bought some Apple stock again (even better, I avoided waiting in those horrendous lines).

I think I’m going to try this out. Being a tech geek, I’m often following gadgets. I get this emotional urge to want to purchase many of them. This is betting on the idea that there are a lot of people just like me who want it as well.