Cost of Ownership math - Upgrading maxed out MBPs every 2 years

[PeterJP]

Is somebody trying to justify his purchases?

I bought my 13" early 2014 and it worked fine until early 2020, when the 8GB RAM was stopping me from running VMs, which they imposed upon me suddenly and afterwards turned out to be entirely unnecessary. I used it for software development throughout 2015-18. I wanted to get 4 years out of this 16", but we all know how the leafblowerbook pro screwed up that expectation. So I'm hoping to get 5 years out of my new MPB14", at least. If I do that, my average will be moving in the right direction again.

The good laptops that Apple produces, last nearly for ever. No need to replace them so often, definitely not when they're maxed out.

 

[MareLuce]

Good thing many of us buying these to do actual work on them can make that "actual cost per month" with an hour or less of using the machine.

Yep...

If its more of a want than a need, I suggest just play with it at the store every weekend and settle for a $329 iPad and put that money towards investments for retirement.

That's a great idea; why didn't I think of that.
(!)

What are you doing as work with it to justify the cost of upgrading every two years?

If I needed feedback on my use case vs machine selection, I would have focused a question around that.

I am already pegging current maxed out 2019 MBP in terms of memory pressure and CPU.
My only uncertainty was 4 TB vs 8 TB, but Backblaze logs and Excel helped me figure that out.

However, to your broader point, 100% agree on the importance of retirement goals and investment.

I suggest that everyone reading this go well beyond that:
Every financial decision you make, down to how much should you spend on your next meal, should be made with 1, 5, 10, 15 year financial goals in mind. Fun way to start - any purchase over $100: the Suzie Orman "Can I afford it?" test.

Is somebody trying to justify his purchases?

1 - Her
2 - No. Not justify. Rather, to show the actual cost in hindsight, given Apple's valuation of trade-in within a specific time window. To hear insights from others who have done same analysis.

the clever @AgentMcGeek asked the most interesting related question so far.

The question is, I guess, when should we return the machine to get maximum resale value before it loses too much?

If we resale too early though, the monthly cost will be too high…

i.e., AgentMcGeek is asking, independent of all other considerations, how to find the optimum , Time (Optimum Sale) = x. Optimization decisions are always interesting.

To be clear, this is not my question, but it is a great related question.

The good laptops that Apple produces, last nearly for ever. No need to replace them so often, definitely not when they're maxed out.

Wow. Such an absolute statement reveals a lot about your breadth of experience in the world.

Have you ever completed an actual cost benefit analysis or ROI for a major financial decision?

 

[Mr. Dee]

You seem to have the answers to your questions, why bother asking for assistance?

 

[MareLuce]

You seem to have the answers to your questions, why bother asking for assistance?

What question did I ask in my original post?

 

[PeterJP]

1 - Her
2 - No. Not justify. Rather, to show the actual cost in hindsight, given Apple's valuation of trade-in within a specific time window. To hear insights from others who have done same analysis.
(...)
i.e., AgentMcGeek is asking, independent of all other considerations, how to find the optimum , Time (Optimum Sale) = x. Optimization decisions are always interesting.
(...)
Wow. Such an absolute statement reveals a lot about your breadth of experience in the world.

Have you ever completed an actual cost benefit analysis or ROI for a major financial decision?

Sorry for calling you "him", milady. It was an honest mistake.

Yes, I've done cost-benefit analysis and ROI etc for major financial decisions, for several companies in a diversity of sectors, several orders of magnitude above my own salary. I've also done change management. Frequently, the cost of implementing the change outweighs the possible financial gain. The bigger the investment, the bigger the cost of change. So while sometimes we need to change because we can't reach the goals we want to reach with what we have, sometimes it's better to delay the change because of the impact of the change. Yes, upgrading computers also has an impact. I have one team now that's unable to work because of an upgraded computer that doesn't do what it's supposed to do. They're spending time on debugging the new machine instead of working.

If you're not talking about such large scale implementations, but just your own financials, then here's a calculation for you. I bought my late 2013 13" in early 2014 and used it for 6 years. At a cost price of €2500, the total cost per month was €34.72. Which is a factor of 3 below your ROI calculation. Even if the machine had been €6K, it would still have been below your number.

I have many people in my team who ask for very expensive machines every other year. But in practice, the upgrade is usually fun but unnecessary.

 

[MareLuce]

but just your own financials, then here's a calculation for you. I bought my late 2013 13" in early 2014 and used it for 6 years. At a cost price of €2500, the total cost per month was €34.72. Which is a factor of 3 below your ROI calculation.

No. I did not post a ROI calculation. I posted a simple, tangible Cost of Ownership.

Any kind of ROI, RETURN on Investment, calculation would have included tangible (hard $) benefits actually experienced with my use cases.

I've presented dozens of formal large project proposal ROIs to a Fortune 2xx CFO with no sense of humor.
(Large as defined by a large $ financial clip level.)
All ROIs, RETURN on investments, had to include both tangible and intangible COSTS including opportunity costs, and tangible and intangible BENEFITS.


However, in support of your later point re: downside consequences of any upgrade,
that 2019 upgrade had a huge intangible cost to me that emotionally still impacts me.

It took 3 systems, 3 new 2019 MBPs purchased, before I landed a good one. The first 2 new MBPs ultimately were lemons and had to be returned.

The emotional part: I should have / could have spent that precious holiday time off with 2 family members who died in 2020 instead of with 2 defective new 2019 MBPs in December 2019

It just exhales loudly and dies (16" 64GB, 4TB)

My turkey was moist. Uncle Harry's jokes seemed more tolerable this year. No political arguments broke out. Yet the geek side of my soul had a sad Thanksgiving... My shiny new 16" MacBook Pro with 64GB and 4TB appears to be dead. It tries to boot. Then it gives a loud exhale and dies. Video...

forums.macrumors.com

But in error I chose to pay more attention to the Apple deadline for laptop returns and trade-in return. It just became one big time suck that I emotionally regret to this day, regardless of the very positive tangible returns on the faster system vs the slower system. I should have delayed the purchase into January and just spent holidays focused on family.

 

[PeterJP]

No. I did not post a ROI calculation. I posted a simple, tangible Cost of Ownership.

Thanks for clarifying.

However, in support of your later point re: downside consequences of any upgrade,
that 2019 upgrade had a huge intangible cost to me that emotionally still impacts me.

It took 3 systems, 3 new 2019 MBPs purchased, before I landed a good one. The first 2 new MBPs ultimately were lemons and had to be returned.

The emotional part: I should have / could have spent that precious holiday time off with 2 family members who died in 2020 instead of with 2 defective new 2019 MBPs in December 2019

It just exhales loudly and dies (16" 64GB, 4TB)

My turkey was moist. Uncle Harry's jokes seemed more tolerable this year. No political arguments broke out. Yet the geek side of my soul had a sad Thanksgiving... My shiny new 16" MacBook Pro with 64GB and 4TB appears to be dead. It tries to boot. Then it gives a loud exhale and dies. Video...

forums.macrumors.com

But in error I chose to pay more attention to the Apple deadline for laptop returns and trade-in return. It just became one big time suck that I emotionally regret to this day, regardless of the very positive tangible returns on the faster system vs the slower system. I should have delayed the purchase into January and just spent holidays focused on family.

I'm very sorry to hear that, MareLuce. I had to return one 16" as well in the middle of two major projects and it was hell. I can't begin to imagine what your situation was like. In 2019, we were blissfully unaware of what was about to hit us. Most of us would have done the same thing in your situation. I hope you and your family are safe and healthy now.

 

[haruhiko]

If you’re in a two year upgrade cycle, I don’t think you need to have the maxed out version.

 

[MareLuce]

If you’re in a two year upgrade cycle, I don’t think you need to have the maxed out version.

What is your assessment of my need?

 

[baypharm]

Where is the trade in value of $2120 coming from? According to Apple, my fully maxed out 2019 model has no value except for the recyclers. I am happy with it in every way after upgrading from my 2009 model. The reason I stopped using the 2009 machine was because of circuit board problems which I couldn’t get repaired easily.

 

[vvgogh]

Cost of ownership math on upgrading maxed out 16" MBPs every 2 years.

View attachment 1876595

An alternative to consider is to instead get a 14", 16 GB RAM, 1 TB SSD for $2,500. That's a delta of $3600. Take that delta and put it in Apple stock betting that they'll make some big profits over their processors and advance the technology quite a bit further making many people want to upgrade again. In a simplistic model assuming 25%/y depreciation and 20% stock gains (last year was 25% gain), every month has a narrow net profit, minimum at month 8 at $15 after tax (including 15% depreciation loss to date, $465 stock gain, less long term capital gain tax). At the 2y mark, you've made $241 after capital gain tax and depreciation losses. Wait 4y when extended warranties expire and you've made $1,446 after capital gains tax and 67% depreciation losses.

Of course there will be daily volatility along the way and there's no guarantee of future returns, so there's risk.

 

[dynoto]

i'd wonder what kind of workloads that you're running, are you by chance a videographer / working in media / editing that requires a maxed out macbook?

speaking from my own perspective, i look at my current mac and determine which aspect of the machine that is lacking and therefore forming the requirements of the next gen machine i'm buying rather than following certain upgrade schedules

depreciation rates are not linear for macs at least from my past buying/selling experience, a 4 yo macbook would land you around 25% of the purchase price, 5yo .. 20 ... 6 yo 15 ... (currently on a 2013)

bought my mac refurb (thats 15% savings) at about $2.5k ... so thats about $29.7 per month ... really cheap

 

[pshufd]

i'd wonder what kind of workloads that you're running, are you by chance a videographer / working in media / editing that requires a maxed out macbook?

speaking from my own perspective, i look at my current mac and determine which aspect of the machine that is lacking and therefore forming the requirements of the next gen machine i'm buying rather than following certain upgrade schedules

depreciation rates are not linear for macs at least from my past buying/selling experience, a 4 yo macbook would land you around 25% of the purchase price, 5yo .. 20 ... 6 yo 15 ... (currently on a 2013, moving to 2021 mac)

bought my mac refurb (thats 15% savings) at about $2.5k ... so thats about $29.7 per month ... really cheap

It may be that someone wants to avoid swap. I have a 16 GB mini and it typically runs around 13 GB doing just office stuff. My main workload is on a Windows desktop with 128 GB of RAM. I would like to move it to a Mac and will run experiments to come up with a replacement for the Windows system. I will still use it for development and experimenting with virtual machines.

 

[dynoto]

It may be that someone wants to avoid swap. I have a 16 GB mini and it typically runs around 13 GB doing just office stuff. My main workload is on a Windows desktop with 128 GB of RAM. I would like to move it to a Mac and will run experiments to come up with a replacement for the Windows system. I will still use it for development and experimenting with virtual machines.

you mean memory swapping? i heard thats common issue on a lower end mac but still doesn't warrant a 4TB to 8TB SSD unless one is working with large media files, other than that to me its just poor storage management.
16GB to 32GB ram should be the solution to reduce swapping

 

[NYCVB]

Cost of ownership math on upgrading maxed out 16" MBPs every 2 years.

View attachment 1876595

Same thing here. I have a 2019 MacBook Pro that I'm trading in for $1430 so am spending roughly $1500 to get the new 16" base MacBook Pro. No real need for an upgrade but I'm getting a brand new machine for the cost and run a business off my Mac mini and MacBook Pro so its easy to justify the cost.

 

[jeff127]

Thanks for sharing these calculations, certainly makes the idea of upgrading regularly more managable: even if it's a moot point when I'm currently using a late 2011 13"!

 

[dead flag blues]

My 2019 16" 64gb 2tb trade in value is $1770 towards the 2021 16" base w/1tb that is en route. Interesting.

 

[ctjack]

So in conclusion, it looks like the base models will have the same percentage point sunk cost as higher end, but in terms of money($ value) it will be cheaper than the high end models. Because sunk 50% of 1000 base Air is $500, while $4000 will lose $2000 over the same time.
I guess we need to thank Apple, because in an iPhone world they don't care about storage at all = $1100 Pro max user gets the same trade-in value as $1600 Pro max user.

 

[arche3]

I basically factor the time i save from my life if i have a better machine and if it saves me time and improve any personal time. I have so many costs related to my work a 20k mac pro or 5k macbook pro is a drop in the bucket every two years. I have to factor in software requirements for my attention. Any 3rd party hardware issues that require my attention. These are my main concerns.

 

[NYCVB]

So in conclusion, it looks like the base models will have the same percentage point sunk cost as higher end, but in terms of money($ value) it will be cheaper than the high end models. Because sunk 50% of 1000 base Air is $500, while $4000 will lose $2000 over the same time.
I guess we need to thank Apple, because in an iPhone world they don't care about storage at all = $1100 Pro max user gets the same trade-in value as $1600 Pro max user.

I'm impressed with the trade in value, glad I didn't max out my 2019 MacBook Pro, but the upgrade cost with a direct trade in and not dealing with ebay/craigslist hassle is a no-brainer.

I basically factor the time i save from my life if i have a better machine and if it saves me time and improve any personal time. I have so many costs related to my work a 20k mac pro or 5k macbook pro is a drop in the bucket every two years. I have to factor in software requirements for my attention. Any 3rd party hardware issues that require my attention. These are my main concerns.

 

[jerryk]

We upgrade many of our systems every 2 years. Since it is for a business they are a tax deduction.

 

[ctjack]

I'm impressed with the trade in value, glad I didn't max out my 2019 MacBook Pro

Don't you mind sharing your purchase price and the trade-in value that seems appealing to you? Also the model?
I am thinking about trading in my M1 Air towards base 16 Pro. Now here I am trying to figure out "how much I would lose with that new 16 M1 going forward into the future?".

 

[NYCVB]

Don't you mind sharing your purchase price and the trade-in value that seems appealing to you? Also the model?
I am thinking about trading in my M1 Air towards base 16 Pro. Now here I am trying to figure out "how much I would lose with that new 16 M1 going forward into the future?". $1430 trade in value.

2019 MacBook Pro I9, 1tb hard drive, 16 gigs. I purchased in Feb 2020. Not sure what I paid but probably 3k-3.5k. It makes sense if you are running any sort of business for the same reason I replace a 3 year car lease every 3 years. Reliability is worth cost, downtime is costly. Plus a new toy every few years

 

[rMBP2013]

To OP: I just got the M1 Pro 16" mid-level model with apple care+. After taxes, it cost me $4K and in 2 years, I'm anticipating to sell it for around $2,200 which is 55% resale value (if not better).

In other words, my current laptop will cost me $75 per month which is a screaming deal as I care a lot about my computers as I'm on it all the time.