Once in a While I have to fork out 5/600 Bucks for an off Contract phone. But for the Most part when a GOOD phone comes out that I want then we have a Line avaible that can be upgraded.
Now you ask how can you afford the Data Package on each line.. Well in short we dont. We Then call Verizon or goto the Store and we attach a "Dummy" phone to the line . And then all we pay is $10 bucks a month for the line.
But 2 of our lines My Parents use, but they have just cheap Flip phones.. And when they need a new one I just go buy them a cheap flip phone off Ebay or something. So I guess You can say, that we have 4 lines and 1 Dummy. But it all works out well. Wife and I get the phone we want when we want it.
I am fortunate enough to have a Job to where I get paid very well. So sometime we will forego a longer vacation to get a phone and shorten a vacation trip by a day or 2. There are many different methods of how people flip flop on phones..
Keep in Mind alot of the well known developers get donations to help them purchase the phone.
As for me...I own a business so I hand down my phones, swap the numbers, and my employees get upgrades from their previous phones, so they're happy. In the past couple of years I've had a Droid X, Droid X2, Bionic, Droid RAZR, Droid RAZR Maxx, and now the RAZR Maxx HD. Like I've heard said "It's good to be the king!". Lol
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I really can't afford it, but I decided I wanted the Maxx HD. So, I but the bullet, bought it, and sold my S3. I'm happy.
We have 5 lines on our account 3 with unlimited data and two dummy lines. That is an upgrade about every 5 months.
3 lines are one of myself, girlfriend and daughter. Daughter gets the old phone and I get a new one :) sometimes I pay full retail, but usually I don't.
Also, for those who upgrade each time a phone comes out, they can usually sell their old phone, which is still pretty new, and get a decent price for it, therefore subsidizing the newer phones cost.