PFT #94 - Personal Finance Tip of the Week: The Superbowl, Inflation and Compound Interest

Today is 2/11/24 which is the Superbowl with the Kansas City Chiefs vs. the San Francisco 49’ers and this marks the 57th time that this game will have been played.

This is a large amount of years, so we decided to run some math based on the amount at which things are consumed and what they cost.

Let’s start with advertising and the cost for a one minute spot during the game:

In 1967: $37,500. For 2024: $7 million. This equates to an increase 185 times.

To further that, this means gas would be $61 per gallon and the S&P would be at 16,000 - for context today it is at 5,000

As for as food and beverage:

Chicken wings would be $43/lb.

A 6-pack of beer: $340.

A bag of Doritos $18.5.

So needless to say, for most items, they only increase in price and this led us to look into inflation and compound interest. For example, that $1 football square would be $9.18. How about the average house? According to the St. Louis Federal Reserve, it was $24,400 and in February of 2024, it is $492,300

So let’s just put it out there . . It is expensive to be an American. Therefore, the best plan of attack is to budget and live within your means. In unison, the mission is to invest in yourself and build a moat for your future while balancing inflation.
'
For context, the S&P since 1926 has averaged a return of approximately 10% and a 7% return when factoring in inflation.

If we were to emulate that, we can invest in exchange traded funds that closely mimic these returns such as the tickers of SPY, IVV, VOO and SPLG.

For context VOO has returned 9.99% over the last 30 years. According to Forbes, the average American works 42 years before taking retirement, so let’s see how much money adds up over time without inflation and expenses:

At $100 a month, the amount would be $679,602.

At $250 a month, the amount would be $1.69M.

At $500 a month, the amount would be $3.39M.

So this is fantastic and this shows the power of compound interest - and the reminder is that the more that you can invest, the more you make and you let the market do its thing.

So the next question is … will this prompt you to look at your budget and find a few dollars to put away? All it will do is make you money.

Website:
https://www.somethingonmymind.net/

Social Media
https://www.instagram.com/somm.podcast/https://www.youtube.com/channel/UChec5qcZBcGkIhUU3belNDw
https://www.tiktok.com/@somm.podcast?lang=en
https://www.facebook.com/somm.podcast
https://twitter.com/Somm_podcast

Episode Transcript

(00:05):
Hello everyone, I am David,and you were listening to the Personal Finance
Tip of the Week and this week'stopic is on the Super Bowl, inflation
and compound interest. Today is Februaryeleventh, which is the Super Bowl and
this is with the Kansas City Chiefsversus the San Francisco forty nine ers,

(00:27):
and this marks the fifty seventh timethat this game will have been played.
This is a large amount of years. So we decided to run some math
based on the amount at which thingsare consumed and what they cost. So
let's start with advertising and the costfor a one minute spot during the game.
In nineteen sixty seven it was thirtyseven five hundred dollars. For twenty

(00:51):
twenty four, this is an astoundingseven million dollars and this equates to an
increase of one hundred and eighty fivetimes. To further that g ass would
be sixty one dollars per gallon andthe S and P would be at sixteen
thousand. For context, today itis at five thousand. As for food
and beverage, chicken wings would beat forty three dollars a pound, a

(01:12):
six pack of beer three hundred andforty, and a bag of doritos eighteen
dollars and fifty cents. So,needless to say, for most items,
they only increase in price, andthis led us to look into inflation and
compound interest. For example, thatone dollar football square would be nine dollars
and eighteen cents today. How muchwas a house back in nineteen sixty seven,

(01:36):
According to the Saint Louis Federal Reserve, it was twenty four thousand,
four hundred dollars and in February oftwenty twenty four, an astounding four hundred
and ninety two thousand, three hundreddollars. So let's just put it out
there. It is expensive to bean American. Therefore, the best plan
of attack is to budget and livewithin your means. In unison, the

(01:57):
mission is to invest in yourself andbuild a mote for your future while balancing
inflation. For context, the Sand P five hundred since nineteen twenty six
has averaged a return of approximately tenpercent and a seven percent return when factoring
in inflation. If we were toemulate that, we can invest in exchange

(02:17):
traded funds that closely mimic these returns, such as the tickers of spy IVV
VOO and SPLG for context, thevo has returned a nine point nine percent
over the last thirty years. Accordingto Forbes, the average American works forty
two years before taking retirement. Solet's see how much that money adds up

(02:40):
over time without inflation and expenses.At one hundred dollars a month, the
amount would be six hundred and seventynine thousand, six hundred dollars. At
two fifty the amount would be onepoint six to nine million, and at
five hundred dollars a month, theamount would be three point three nine million.
So this is fantastic and this showsthe power of compound interest. And

(03:04):
the reminder is that the more thatyou can invest, the more that you
make, and you let the marketdo its thing. So when biting on
that next chip tonight, will thisprompt you to look at your budget and
find a few more dollars to putaway. All that will do is make
you more money, So that willdo it for their personal finance Tip of
the week Until next time, Iam David