Investing vs Consuming

Investing vs Consuming

 

On June 22, 2012 Tesla released their Model S electric car, at the price of $77,400 for the 300-mile version. If you had purchased the car, you would now own a Tesla Model S at its depreciated value. If you had used the same sum of money to buy Tesla stock, which was valued at a split adjusted price of $6.52,1 you would now own 11,809 shares, each valued at $695. Your $77,400 would now be worth over $8.2m. 

These figures show the potential gains if you invest in the companies that you buy from. Consider another example. Amazon shares have risen in value over the last four years from $587 (Jan 2, 2016) to $3,201.65 (December 18, 2016), that’s 445%3. In the same period, Facebook share value has risen from $368.77 to $23,417, that’s 6,250%.4 Apple stock has gone up from $26.8325 (December 21, 2015) to $126.655 (December 18, 2020), a 372% growth.5 Netflix rose from $91.84  (January 1, 2016) to $534.45 (December 18, 2020), 482%.6

When you trust and believe in a brand, and value the service or item it provides, you may consider purchasing its product. This is consuming. But those very same value decisions that led you to buy or use the product, could also lead you to a decision to invest in the company. Buying shares, whether individually or as part of a fund that balances the risk and exposure to a single company, expresses your confidence in the brand and enables you to benefit from its possible growth and success. If you believe that others may make the same consumption decisions as you, then you have reason to consider investing in what you consume.

1 https://finance.yahoo.com/quote/TSLA/history?period1=1340323200&period2=1340409600&interval=1d&filter=history&frequency=1d&includeAdjustedClose=true

2Tesla share value at close of trading December 18, 2020.

3 https://finance.yahoo.com/quote/AMZN/history?p=AMZN

 4 https://finance.yahoo.com/quote/BTC-USD/history?period1=1450569600&period2=1608422400&interval=1mo&filter=history&frequency=1mo&includeAdjustedClose=true

5 https://www.nasdaq.com/market-activity/stocks/aapl/historical

6 https://finance.yahoo.com/quote/NFLX/history?p=NFLX