Here’s a situation, you’ve somewhat finished your studies and landed a job a while back. As you look around, denim jackets are everywhere, some are donning eyes-piercingly bright sweatbands, and right in front of you, the cashier is waiting for you to hand over the cola bottle as he puts your 25 cents away into the registry — welcome to the 80s! *Michael Jackson’s Beat It plays in the distance*
What if you invested in Apple back in those days?
Cut on those Tab Cola and see what you’d be like now, boomers!
As you walk around, people are talking about this ‘hip’ new tech which is said to revolutionize the world. Well… it’s the Apple III, which is sold at a whopping price of $4,500 (that is around $17,413 today).
With an average working person’s salary back then, owning it might be a bit too far off, but why not own Apple — the company — itself, or at least a part of it?
Apple's debut in the public market
Apple first went public in December 1980, with an initial price of $22 per share, but the stock did split five times since its IPO, so the price for each share during the IPO (split adjusted) is only at $0.10. The first split was a 2-for-1 split in 1987, and the next one to come was in the year 2000.
Your debut in the market
Say, you started working your first job right at the beginning of the 1980s. The average starting salary back then is around $1,600 per month (not yet adjusted for inflation), so that’s what you’re getting. As for the cost of living, having just graduated, we’d strike away cars, new houses, and gasoline from your expenses.
So, what would your spending look like? For food, let’s just say here’s your monthly grocery (note: you’re single and just landed a job):
Milk: 1 gallon at $1.59/gallon = $1.59
Apple: 12 pounds at $0.35/pound = $4.20
Corn: 24 pieces at $1.18 for 12 = $2.36
Sliced bread: 4 loaves at $0.50/loaf = $2
Pork and beans: 20 at $0.40 each = $8
Pork chop: 7 pounds at $2.49/pound = $17.43
Potatoes: 10 pounds at $0.20/pound = $2
Tomatoes: 5 pounds at $0.39/pound = $1.95
Turkey: 17 pounds at $0.55/pound = $9.35
Cheese: 36 pieces at $1.47 for 12 = $4.41
So, for the basic food, you spend around $53.28, let’s round it off to around $80 — $100 considering other things that may not be listed.
For rent, you spend around $250 a month. For public transportation, you spend around $20 for the monthly pass. Now we’ve covered food, shelter, and transportation. It all sums up to around $370 for the basic necessities. It’s the 80s though, so let’s throw a few more dollars into the cauldron just to make it up for other things, and round it off to $500.
You’re now left with $1,100 from your salary. Everyone wants a dream car and a dream house, right? At least in the 80s. You save some of those for new house deposits Let’s just estimate the price at $97,204 for when you want to place your deposit of 10%.
Say, you want to place your deposit after 5 years of working, that’d be $9720.4 in 5 years, so you save around $162 a month. For your car, let’s put the price at $10,822, and again, you want it to be done in 5 years, so that’s around $180.40 a month.
In total, you’ll spend around $842.4 in a month, on food, rental, transportation, savings for houses and car — all of it. That will now leave you with another $757, cut it down more for miscellaneous things like fluffy wigs, and let’s just leave with $500.
With the remaining $500, take half of it for your just-in-case savings, and now you’ll have $250 to invest, and let’s just say you only want to invest for five years, because after that you’ll be getting a house and a car to pay installments for.
What happens if you invest in Apple?
We looked back into the past and see how Apple’s shares have been, and along the way, we’ll try to see how much of it can you buy each month upon receiving your pay. Mind you, Apple has split its stock five times, since its IPO. That’s why if you look into now’s historical data, you’d see Apple’s shares near its IPO at only around $0.10, when in fact, its IPO price is at $22 in 1980.
With the $250 you have each month, here’s an estimate of Apple stock you could’ve bought at the time — and we also use the highest monthly price possible, on the assumption that we only buy during FOMO season, so we never miss out on buying Apple’s shares at its highest price of the month.
In total, you would’ve bought around 750 units of shares in Apple if you invested from the beginning of 1981 up until the end of 1985. Is that it? Well, not really. As we mentioned before, Apple has had a few splits coming in the years to come. If you keep your shares until now, your shares would have bred to — bear with us — 168,000 units!
So, how rich should you be by now if you’ve invested in Apple for 5 years back in your days, imaginary boomers? Not much, your worth from your investment in Apple alone would’ve given you a net worth of $30,097,200.
If only you’d cut down on those tab colas, stale coffees, and the time you spend hanging out in front of Wawa — and hold on to the sheer devotion to Apple’s prospects, you’d be a multimillionaire by now, and you might not even have to cut corners on your essentials! Anyhow, this is just an imaginary journey of a time you can never buy again, at least until someone invents a time machine. As far as we’re concerned, the future is still ahead of us, so why not start investing today with whatever little we have?
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