Buying Amazon Stock VS Buying a House In Top Cities Of The World

Since my childhood I always saw my parents to be very cautious when it came to spending and even more so when it came to saving. Their opinion resonated with the popular belief: invest in property since its value will only appreciate- it is the best investment one could make!

Around 20 years ago, began their journey towards a shared objective which was to buy a house since it was a high-worth asset. Since then, the value of this house has increased by over 200% and my mother proudly commends how this was the best decision of their lives!

Popular opinion and hefty appreciation in property value led me to believe that this was indeed the best investment opportunity until one fine day I was proven wrong.

I studied hard, graduated with decent results and entered the workforce by joining a reputable MNC- life couldn’t be any better! However, I was faced with a dilemma when I was forced to think about savings and investing for a better, stronger future.

People around me comfortably advised, ‘invest in property, it always pays off, it’s safe and will give you good returns like it always has’ but I wanted to find out and cross check some facts for myself.

housing-prices-vs-stock (Amazon stock, Apple Stock)

By the virtue of the ‘digital age’ we live in, creating content and sharing information has become easier than ever before.

For the purpose of validating this claim, I conducted a small experiment: by holding the investing amount constant, I compared the returns on investment between investing money in Amazon stock versus investing the same money in property in the popular five destinations of the world: UK, US, Singapore, Hong Kong and Canada.

Before we get to the results, I’ll clarify the rationale behind comparing Amazon with the Top 5 cities first.

Amazon v/s Top 5 Cities:

Amazon has grown incrementally over the past few years and is at the forefront of driving technological breakthroughs today- it is the first company expected to hit the $1 trillion mark by market capitalization but it was launched through a humble beginning and only a few saw potential in this venture.

Warren Buffet (the investment and financial guru) on several occasions has expressed his disappointment in not being able to invest in Amazon at the right time as he was quoted to say, ‘I made the wrong decisions on Google and Amazon’.

Amazon Stock Growth:

amazon stock growth 1997 to 2018

So naturally I compared the stock price of Amazon at the time of its launch which was a mere $1.73 in 1998 but today the stock price is worth over $1700.

Analyzing the significant incremental returns on this stock probed a thought- is Amazon an outlier and is the comparison valid? Could it be that Amazon just got lucky and progressed so much over the last few years?

I wanted to be sure, hence I introduced another company expected to hit the $1 trillion mark and it’s none other than Apple Inc. Like Amazon, Apple Inc has also seen phenomenal growth and success but it too started from a modest beginning.

I have added some quick facts about Apple Inc below but if we were to compare the two: clearly, Amazon has appreciated more over the given period compared to Apple and has also experienced several fluctuations which in essence were an indication for buyers to buy more of the stock.

Apple Stock Growth:

apple stock growth 1980 to 2018

Apple’s stock price was $0.51 in 1980 however in 2018 is close to $185- this too represents significant growth in the value of the company’s stock over a period of 38 years.

Looking at the returns from Amazon and Apple prompted me to compare the returns from the two if I has invested $50,000 in either of them in 1997 (by that time the companies had been established, they were operationally stable and also had brand recognition/affiliation).

For $50,000 invested in 1997 in Amazon- it would be worth over $49 million in 2018. Similarly, for the same dollars invested in Apple in 1997- it would be worth over $16 million today.

Looking at the investments made in housing in Top 5 cities during 1997 and projecting the appreciation in value till 2018- the growth is only double and triple digit however, growth in stock valuation for these 2 companies is far beyond that. 33959% incremental returns for Apple and 98108% for Amazon is no joke!

How did I determine housing prices in the 5 countries I chose? It’s simple (but the data was hard to find) and the logic is as follows:

Source:

Following are the sources of Property price for each of the 5 countries:

United Kingdom:

I used House Price Crash Website and converted the figures into dollar.

United States Of America:

This was the easiest one. You put the amount and they give you value. I choose the house price based on some Google research.

Canada:

I took the lowest area price the same as I have taken in Singapore. It give me the price in 2018. I just divided the price with the index in 1997.

Singapore:

I have taken an average HDB Price in a not so premium area. I have divide the price with 1997 index to get the price.

Hong Kong:

I have taken an average price of home and divided by housing index.

Comparison Stocks VS Cities:

Comparison Amazon and Apple Stock VS Singapore, Hongkong, London housing

50,000 Dollar Invested in Property VS Amazon or Apple:

How much Money you had to invest in Amazon to be a Millionaire? What about Apple?

Naturally, the next question I asked myself is how much should I have invested in Amazon during 1997 for me to be a millionaire today? and the answer is- $1020!.

Had I invested close to a thousand dollars in Amazon during its IPO- I would’ve been a rich millionaire today! Similarly, for me to hit a million dollar mark with Apple Stock- I should have invested $2945 in 1997.

Investing in Amazon Stock VS Investing in Property

Apple II VS Apple Stock:

With Apple, there is another perspective- Apple II was launched during 1997 and many people invested in that gadget because it was trendy and tech savvy according to the time.

According to Wikipedia, Apple II was introduced at a price of $1298 for the basic version and $2638 for the upgraded version.

apple-2-vs-apple-stock

Today, Apple II is worth cipher but if the same amount i.e $1298 was invested in Apple stock instead- one could have easily earned close to a million dollars today.

Apple Stock Price 1980:

Apple stock price increase 1980 to 2018

The fact of the matter is the price of Apple has increased 35963% from 1980 to 2018 which is far greater than either investment in property or a fancy gadget (Apple II in this case).

Buying Apple 2 VS Buying Apple Stock 1980

So all those people who have bought Apple II 48 KB of RAM could have easily become a Millionaire by now! That’s a phenomenal ROI for not buying a Computer!

The sole purpose of this analysis is to break common beliefs and challenge an individual to look at the numbers and trends from another perspective. What our peers, elders and parents blindly believed about property is not so true actually if we compare facts and figures- in many cases investing in property is not really a smart investment.

What’s the next ‘BIG’ investment (Stocks, Cryto-currency)?

Personally, I have invested in crypto currency using etoro. It’s a social trading platform which allows one to invest in wide variety of assets.You can assume it as a Facebook for investors.

It allows individuals to follow like minded people who are already investing money in particular asset class be it digital currency, stock, commodities.

You can also see the history of people gains if their profile is public and can copy their trade. They have some great analyst covering the market you can read investment trends and make the smart decision.

My technique is to validate my investment insights with other people on the platform to see if they resonate and I think it will help me opt for more rationale choices.

Happy Investing Y’All!


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Buying Amazon Stock VS Buying a House In Top Cities Of The World

Since my childhood I always saw my parents to be very cautious when it came to spending and even more so when it came to saving. Their opinion resonated with the popular belief: invest in property since its value will only appreciate- it is the best investment one could make!

Around 20 years ago, began their journey towards a shared objective which was to buy a house since it was a high-worth asset. Since then, the value of this house has increased by over 200% and my mother proudly commends how this was the best decision of their lives!

Popular opinion and hefty appreciation in property value led me to believe that this was indeed the best investment opportunity until one fine day I was proven wrong.

I studied hard, graduated with decent results and entered the workforce by joining a reputable MNC- life couldn’t be any better! However, I was faced with a dilemma when I was forced to think about savings and investing for a better, stronger future.

People around me comfortably advised, ‘invest in property, it always pays off, it’s safe and will give you good returns like it always has’ but I wanted to find out and cross check some facts for myself.

housing-prices-vs-stock (Amazon stock, Apple Stock)

By the virtue of the ‘digital age’ we live in, creating content and sharing information has become easier than ever before.

For the purpose of validating this claim, I conducted a small experiment: by holding the investing amount constant, I compared the returns on investment between investing money in Amazon stock versus investing the same money in property in the popular five destinations of the world: UK, US, Singapore, Hong Kong and Canada.

Before we get to the results, I’ll clarify the rationale behind comparing Amazon with the Top 5 cities first.

Amazon v/s Top 5 Cities:

Amazon has grown incrementally over the past few years and is at the forefront of driving technological breakthroughs today- it is the first company expected to hit the $1 trillion mark by market capitalization but it was launched through a humble beginning and only a few saw potential in this venture.

Warren Buffet (the investment and financial guru) on several occasions has expressed his disappointment in not being able to invest in Amazon at the right time as he was quoted to say, ‘I made the wrong decisions on Google and Amazon’.

Amazon Stock Growth:

amazon stock growth 1997 to 2018

So naturally I compared the stock price of Amazon at the time of its launch which was a mere $1.73 in 1998 but today the stock price is worth over $1700.

Analyzing the significant incremental returns on this stock probed a thought- is Amazon an outlier and is the comparison valid? Could it be that Amazon just got lucky and progressed so much over the last few years?

I wanted to be sure, hence I introduced another company expected to hit the $1 trillion mark and it’s none other than Apple Inc. Like Amazon, Apple Inc has also seen phenomenal growth and success but it too started from a modest beginning.

I have added some quick facts about Apple Inc below but if we were to compare the two: clearly, Amazon has appreciated more over the given period compared to Apple and has also experienced several fluctuations which in essence were an indication for buyers to buy more of the stock.

Apple Stock Growth:

apple stock growth 1980 to 2018

Apple’s stock price was $0.51 in 1980 however in 2018 is close to $185- this too represents significant growth in the value of the company’s stock over a period of 38 years.

Looking at the returns from Amazon and Apple prompted me to compare the returns from the two if I has invested $50,000 in either of them in 1997 (by that time the companies had been established, they were operationally stable and also had brand recognition/affiliation).

For $50,000 invested in 1997 in Amazon- it would be worth over $49 million in 2018. Similarly, for the same dollars invested in Apple in 1997- it would be worth over $16 million today.

Looking at the investments made in housing in Top 5 cities during 1997 and projecting the appreciation in value till 2018- the growth is only double and triple digit however, growth in stock valuation for these 2 companies is far beyond that. 33959% incremental returns for Apple and 98108% for Amazon is no joke!

How did I determine housing prices in the 5 countries I chose? It’s simple (but the data was hard to find) and the logic is as follows:

Source:

Following are the sources of Property price for each of the 5 countries:

United Kingdom:

I used House Price Crash Website and converted the figures into dollar.

United States Of America:

This was the easiest one. You put the amount and they give you value. I choose the house price based on some Google research.

Canada:

I took the lowest area price the same as I have taken in Singapore. It give me the price in 2018. I just divided the price with the index in 1997.

Singapore:

I have taken an average HDB Price in a not so premium area. I have divide the price with 1997 index to get the price.

Hong Kong:

I have taken an average price of home and divided by housing index.

Comparison Stocks VS Cities:

Comparison Amazon and Apple Stock VS Singapore, Hongkong, London housing

50,000 Dollar Invested in Property VS Amazon or Apple:

How much Money you had to invest in Amazon to be a Millionaire? What about Apple?

Naturally, the next question I asked myself is how much should I have invested in Amazon during 1997 for me to be a millionaire today? and the answer is- $1020!.

Had I invested close to a thousand dollars in Amazon during its IPO- I would’ve been a rich millionaire today! Similarly, for me to hit a million dollar mark with Apple Stock- I should have invested $2945 in 1997.

Investing in Amazon Stock VS Investing in Property

Apple II VS Apple Stock:

With Apple, there is another perspective- Apple II was launched during 1997 and many people invested in that gadget because it was trendy and tech savvy according to the time.

According to Wikipedia, Apple II was introduced at a price of $1298 for the basic version and $2638 for the upgraded version.

apple-2-vs-apple-stock

Today, Apple II is worth cipher but if the same amount i.e $1298 was invested in Apple stock instead- one could have easily earned close to a million dollars today.

Apple Stock Price 1980:

Apple stock price increase 1980 to 2018

The fact of the matter is the price of Apple has increased 35963% from 1980 to 2018 which is far greater than either investment in property or a fancy gadget (Apple II in this case).

Buying Apple 2 VS Buying Apple Stock 1980

So all those people who have bought Apple II 48 KB of RAM could have easily become a Millionaire by now! That’s a phenomenal ROI for not buying a Computer!

The sole purpose of this analysis is to break common beliefs and challenge an individual to look at the numbers and trends from another perspective. What our peers, elders and parents blindly believed about property is not so true actually if we compare facts and figures- in many cases investing in property is not really a smart investment.

What’s the next ‘BIG’ investment (Stocks, Cryto-currency)?

Personally, I have invested in crypto currency using etoro. It’s a social trading platform which allows one to invest in wide variety of assets.You can assume it as a Facebook for investors.

It allows individuals to follow like minded people who are already investing money in particular asset class be it digital currency, stock, commodities.

You can also see the history of people gains if their profile is public and can copy their trade. They have some great analyst covering the market you can read investment trends and make the smart decision.

My technique is to validate my investment insights with other people on the platform to see if they resonate and I think it will help me opt for more rationale choices.

Happy Investing Y’All!


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