If your grandparents gave you $1,000 for your birthday in 2005 and you kept the money for ten years, that amount would have the same buying power as $1,201 today in 2015. That means, the item you could’ve bought for a thousand dollars ten years ago, you now have to pay twelve hundred dollars for. Your money has declined in value. Not good. Today, interest rates for savings accounts with banks are so low, that if you put $1,000 in a regular savings account with Bank of America (.01 percent. A tenth of a percent.), your $1,000 would become a whopping $1,001 in 10 years. A dollar for an entire decade.
Let’s say you were able to go back in time and tell yourself to invest those $1,000 in the stock market instead. How much would your $1,000 have been worth now in 2015? Below are five stocks you could have invested in, along with how your money would’ve grown (or shrunk).
Apple has been through a lot in the past ten years. The iPod shuffle, for example, was introduced in 2005 and revolutionized the way we listen to music. Its triumph also helped Steve Jobs’ relatively unknown company turn into a household name. A slew of commercially successful products were then released over the years, including the MacBook, the iPhone, and the iPad. Unsurprisingly, the company’s stock skyrocketed along with its popularity.
(The following prices reflect the 2014 stock split.)
January 2005 stock price: $10
January 2015 stock price: $112
Your $1,000 would’ve been worth: $11,200
The restaurant chain technically didn’t have its IPO (initial public offering) until January 2006, but it’s still noteworthy. Funded by an $85,000 loan from his father, Steve Ells has managed to make the brand evolve into something that is threatening the industry giant, McDonalds. It’s very likely that Chipotle’s appeal to millennials has been a huge factor in helping its stock price shoot up over the years. #burritobowl, anyone?
January 2006 price: $42
January 2015 price: $630
Your $1,000 would’ve been worth: $15,000
Ah, Netflix. The one I’m hanging out with as I write this. Believe it or not, our favorite movie companion has been around since 1997, when it was founded by Marc Randolph and Reed Hastings. The idea came to Hastings when he returned Apollo 13 way past its due date, and had to pay $40 in late fees. Eventually, Netflix’s business model featured flat monthly fees and allowed customers to enjoy movies without having to worry about due dates, late fees, and shipping and handling costs. This model proved to be a complete winner over the years, especially when streaming became the norm for so many.
January 2005 price: $11
January 2015 price: $440
Your $1,000 would’ve been worth: $40,000
Of course, not all stocks flourish. Many companies also experience unfortunate demise due to factors they can’t control. Radioshack arguably lost its relevance years ago, as stores like Best Buy, and methods such as online shopping, became more popular. The company has gone through a rollercoaster of events, including a makeover and a bankruptcy filing, in recent times.
January 2005 price: $33
January 2015 price: 14 cents
Your $1,000 would’ve been worth: $4
5) Pharmacyclics Inc.
Stocks of pharmaceutical companies can either be really disastrous or really lucrative. There are a lot of unknowns in the medical field, and the FDA giving the thumbs up or down for a certain kind of drug can make or break an entire company. Pharmacyclics Inc. strives to create “small-molecule drugs for the treatment of cancer and immune mediated diseases.” Although its share price remained stagnant from its IPO in 1995 until around 2010, it has since broken the ceiling and is continuing to soar.
January 2005 price: $10
January 2015 price: $168
*May 2015 price: $255
Your $1,000 would’ve been worth (January 2015): $16,800
Your $1,000 would’ve been worth (May 2015): $25,500
Investing is something that everyone must learn, and it’s even better if started at a young age. As many of my readers are in their late teens and early twenties, know that you have something many experienced investors don’t have: time. Those who started later always wish they had started when they were younger. Pick up a book and start reading about investing, not just in the stock market, but in other areas as well. It’s a great way to safeguard your future.
Disclaimer: I am not a financial advisor and I do not endorse any of the stocks mentioned on this page. Please invest at your own risk.
BONUS: One of my many, many conversations with Patrick about stocks. We get a little too excited sometimes.