The Day My Family Didn’t Become Rich

On May 13th, 1998, Steve Jobs took the stage at at the Flint Center in Cupertino, California, and introduced to the crowd of mostly Apple employees the world’s first iMac computer.

Ten months earlier, Jobs had triumphantly returned to the company he co-founded after being fired in the mid-eighties. Since his departure, Apple’s value as a company had plummeted. According to the Newsweek article linked above, one of Apple’s board members, Larry Ellison, the CEO of Oracle, described the situation like this: “Apple is like a child who has a drug problem—Steve has come back to straighten her out.”

Like tens of thousands of hopeful Apple users across the world, I thrilled at the return of Jobs and delighted at the introduction of the iMac.

I was twenty years old at the time, living with my parents, and making slightly more than minimum wage working in an Irish-run pizza shop. What little money I had went to supporting my addiction to my girlfriend (lots of movies and dinners), to keeping my Suzuki Samurai running, and to paying my “rent” (my parents’ electricity bill).

I didn’t have any money saved, and working an hourly job, I lived (comfortably, thanks to my parents) paycheck to paycheck. 

My father, however, was a jet engineer for GE and had been gainfully employed in their aviation division for my entire life (and then some). We never talked finances in my family, but we lived comfortably in a wealthy suburb of Boston, so I know (and knew) he had some money to play with.

After watching the introduction of the iMac, I told my dad not only was it time to upgrade our 1993-ish Macintosh Performa, but if he was smart, he’d buy stock in Apple Computers. With Steve Jobs back in charge of the company he founded, an exciting new all-in-one flagship computer, and an assurance from Microsoft that they would continue to invest in Office for Mac for at least five years, Apple was primed for success.

In May 1998, Apple’s stock price was roughly $27 and its total valuation was around $3 billion.

Apple’s stock price (at the time of this writing) is now roughly $467, making it, as of this morning, the first U.S. company in history to reach a valuation of $2 trillion.

If only my father had followed my advice in 1998 and purchased a $1,000 stake in Apple Computers! 

Apple’s stock has split three times since 1998: twice for a 2:1 split, and once for a 7:1 split. I’m not a stock-market guy, but I think that means the following…

$1,000 of Apple stock in 1998 would have netted my father roughly 37 shares. Two years later, the stock split, which would have given my dad 74 shares. Five years later, it split again, which would have given him 148 shares. Nine years after that, it split seven ways, which would mean that, as of this writing, he would have had 1,036 shares of Apple stock.

As I mentioned, today’s price is roughly $467 per share. If my father followed my my investment advice, his shares would be worth roughly $483,000.

That’s a hefty chunk of change.

If only.

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