From Road to Riches The Tesla Journey

In what is, in my opinion, a modern day version of the great Aesop fable "The Tortoise and the Hare" the Netflix series called Fastest Car, more specifically the episode called Ludicrous Speed (S2 E6) which I watched over the weekend just gone got me thinking.

In the same vain as the Hare & Tortoise the show pits sleepers against supercars pondered the question..."Tesla stock v Tesla car", which would win?

Now I love these little reflections, so I grabbed a cigar and a wine and started the maths...

Now imagine it's 2010 and you have a chunk of cash in hand, enough to buy the newly released Tesla Roadster, or alternatively, to invest in Tesla's nascent stock. Fast-forward to today, which decision would have driven you down the road of riches?

Let’s break it down:

1. Initial Investment:Tesla Roadster Price (2010): $109,000Tesla Stock Price (June 2010): Approx. $19 (post-IPO)
2. Valuation Now:Tesla Roadster: While some collector cars appreciate, it's not a guarantee. The Roadster might fetch around $200,000 at an auction.Tesla Stock (as of Oct 2023): Approx. $900 per share.

Investment in stocks:

Initial Shares = $109,000 / $19 ≈ 5737 shares

Value Now = 5737 shares * $900 ≈ $5,163,300

Now, let’s delve into some key reflections:

• Long-term Growth: Tesla’s stock has undeniably provided a monumental return on investment compared to holding onto the Roadster. The stock’s appreciation reflects the company’s innovation and market leadership in the EV sector.
• Asset Depreciation: Cars generally depreciate over time, whereas stocks of innovative companies have the potential for significant appreciation. However, the Roadster, being a collector's item, could hold its value better than a typical car.
• Dividends vs. Experiences: Tesla stock doesn’t provide dividends, it's all about capital growth. On the flip side, owning a Roadster might have offered unique experiences and joys of driving a pioneering electric sports car.
• Market Volatility: Tesla’s stock has seen a roller-coaster ride over the years. The journey to wealth could have been stomach-churning, testing investors' patience and risk tolerance.
• Liquidity: Stocks offer liquidity that tangible assets like cars don’t. Need cash? Selling shares is a click away, but selling a collector car can take time and may incur hefty fees.
• Maintenance Costs: The Roadster would have incurred maintenance costs, insurance, and other ownership expenses, further diminishing its financial appeal.

In conclusion, the financial comparison leans heavily in favor of stock investment. Yet, the thrill of driving a futuristic car and being part of the early electric vehicle movement has its own unquantifiable value. Whats obvious in this comparison is that the decision between buying Tesla stock or the Roadster not only reflects one’s financial savvy but also their passion for innovation and adventure on the open road.

Your choice would have defined not just your financial status today, but also the journey you took over the last decade. This retrospective not only sheds light on the financial aspects but also tickles the philosophical chord of material possession versus financial growth.

If this article interests you the point of reflection that could benefit from a complimentary chat about your personal situation please reach out for coffee and chat.