The average person in America spends $1100/year on coffee – it’s probably higher if you count coffee at home.
That’s $11,000 spend over 10 years.
Let’s also assume you get a muffin or some other food so your spending on “other things at Starbucks” is also $1100/yr or $11,000 over 10 years
Let’s sum our likely spending up: $11,000 + $11,000 = $22,000 in spending
WHAT WOULD MY GAIN LOOK LIKE IF I SPENT $25K ON STARBUCKS STOCK 10 YEARS AGO ENDING 11/1/17?
A MINISCULE 2.4X GAIN VS THE S&P 500, I PAID FOR MY SPENDING HABITS IN GAINS AND LOTS AND LOTS OF MONEY LEFT OVER FOR RETIREMENT GOALS!
Obviously every brand would not have offered out-performance versus the S&P 500 but even the worst performer of the 20, Chevron offered a gain of roughly $21,600. That doesn’t include the further gains generated if those dividends were reinvested along the way.
But my Chevron gains would certainly take the edge off of my high gas spending over time. At the very least, the gains lower the average cost of gas which is always welcomed!
Let’s not forget about inflation too. Inflation is a silent tax most of the time. It does, however drain purchasing power. Our government does a wonderful job carving out the rising costs of everything we really need and tells us there’s no inflation but investing in stocks, particularly stocks with pricing power, strong moats around their business and those focused on an enormous and persistent theme of consumption, aka BRANDS can absolutely be a nice hedge against inflation over time. Something to ponder as you do your holiday shopping. Perhaps you should add some of your favorite Brands to the portfolio as a spending hedge?
Happy holidays from all of us at Accuvest Global Advisors.
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