Money Question help?

Question

It’s 1908 and all you need is $400 to buy a Model T. You save like crazy until you have the cash and then a friend says “if I had $400 I’d put my money in the stock market”. So, you say OK – you invest in the stock market and I’ll invest in my Model T. FAST FORWARD. It’s 2008. Now your great grand children are reaping the rewards of your investment. You invested in the Model T – kept it in mint condition and only drove it on Sunday to Church. Your friend invested in a good growth stock mutual fund that averaged 12% per year for 100 years – but never put another penny into it. Who had the better investment? WHY?

Answer 1

Growth stock.

A Mint Model T is not worth that much, but with 12% growth per year, and the 12% built off of the profits from every year (provided they did not get wiped out in the stock market crash), they win by miles and miles

Answer 2

Discounting other factors in this extremely hypothetical scenario, $400 at 12% p.a. compounded over 100 years would surely be worth more in monetary terms than a mint Model T.

Answer 3

Your friend because even a mint condition 1908 Model T Ford would not be worth $30 million.

And it's a Ford so you would have spent millions of big ones just fixing it every 6 months.  But seriously, you spend money on maintaining a car.  Your friend never made another financial contribution to his investment.

Answer 4

The Model T guy.

Taxes and inflation wiped out most of the gains made by the stocks.

Answer 5

There's  one heck of a lot of hypotheticals in your question.

If you were old enough to buy a car in 1908, you'd now be about 130 years old (Congrats!)

Mutual funds were not invented until 1924.

I cannot believe that ANY investment has averaged a return of 12% over a 100 year period.  There are plenty of companies that were considered "blue chip" as recently as fifty years ago that no longer exist.

The guy that bought the Model T married a girl who just loved Model T's.  She was the prettiest, cleverest girl in the State and they raised a family that garnered Oscars and Nobel Prizes and made so much money that the upkeep of the Model T could be afforded.  So in my opinion, the car guy won.

Answer 6

agreed

Answer 7

you did cause you kept your money