Gone are the days when only the rich could afford to invest in the stock market. With the introduction of fractional shares and digital brokerages, investing is now available to the masses and you only need a small amount of cash to get started.
With the power of compound interest, even the smallest amounts deposited into stocks can compile and add up to a sizable portfolio. Don’t believe us? Well, let’s take a look at how much money you could make investing the same amount you would typically spend on everyday products and services, into the stock market.
Exercise is very important for our health and we’re not trying to tell people not to work out, but it is interesting to see how much we could have made if we had used the same amount of money we spend on fitness to invest in Peloton (NASDAQ: PTON) stock. The little-bike-that-takes-you-nowhere was one of the biggest beneficiaries of the pandemic, sending the stock up a staggering 395% in 2020. Given that the average U.S. citizen spends $1,800 a year on health and exercise, you could have made a $7,110 profit from your initial investment as your shares would have been worth $8,910 by the end of the year.
Recent studies have found that U.S. citizens spend on average $2,008 on coffee per year. If we look at how much Starbucks’ (NASDAQ: SBUX) stock has increased in 2020, we see shares have gained just over 20%. Therefore, if you had invested the same amount, $2,008, in buying shares in America’s favorite coffee brand, at the start of 2020, you would have $2,410 by the end of the year — a gain of $402.
On average, U.S. individuals spend $3,300 a year on clothes. If you had invested that sum of money into LBrands (NYSE: LB), a popular American clothing brand, at the beginning of 2020 you would have $7,326 — a profit of $4,026 — by December as the stock went up 122%.
- Online Shopping
Surveys found that the average American spends roughly $1,765 shopping online annually. If you had invested that same amount into Etsy (NASDAQ: ETSY) stock at the beginning of 2020, you could have made a $4,268 profit meaning your initial investment would have been worth $6,033 — given that Etsy shares went up 242% last year.
Some more average spend versus investing in that company stats:
The average U.S. citizen spends $534 on streaming services per year. Had you invested that $534 in Roku (NASDAQ: ROKU) at the beginning of 2020, it would have been worth $1,720 after 1 year (222% increase).
The average American spends $1,203 dining out every year. If you had invested that $1,203 in Chipotle (NYSE: CMG) at the beginning of 2020, it would have been worth $2,057 after 1 year (71% increase).
Read our entire ‘Never Borrow to Buy’ series:
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Financial Writer at MyWallSt
Nicole's favorite stock is Etsy because she loves its original and handmade items. She believes people are going to stop buying mass-produced items and start purchasing ‘one of a kind’ fashions and furnishings. In a world of sameness, Etsy has the advantage.