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Don’t ask me why, but my twisted mind last week thought it would be interesting to equate some of my vices to icebergs.
Here’s my reasoning. I’m told by Google that nearly 90 percent of an iceberg’s mass is below the water line. In other words, an iceberg has a visibility ratio of 1 to 9. When you happen upon an iceberg, you’re only seeing ten percent of it. The rest of it is hidden.
I believe vices have a similar visibility ratio, so I’ve invented the concept of vicebergs, if you will. In other words, only ten percent of a vice’s true cost is visible. The rest of its true cost is hidden.
Testing My Viceberg Theory
To test my viceberg theory, I decided to analyze one of my more infamous vicebergs—drinking.
I had an illustrious drinking career. During my prime drinking years, age 16 to 29, I ruined a lot of alcohol. My guess is that I spent an average of $75 a week during that 14-year span.
I, of course, didn’t spend $75 a week on alcohol while I was in high school. Nor did I spend that much during college. Although I did give it the college try. Once I was out of college, though, and working full-time, I easily spent over $100 a week on booze. And I’m sure there were occasions where my weekly bar tab exceeded $200. Clubbing in New York ain’t cheap. So $75 per week on average during the prime of my drinking career is a fair estimate.
If that’s the case, and I really did spend an average of $75 per week on booze during the prime of my drinking career, that means I spent $54,600 on booze from age 16 to 29. That’s a lot of freakin’ money. And it doesn’t even account for the cost of all that booze to my health, my dignity, and my reputation.
And it’s also only the visible cost of my party animal ways. Now let’s calculate the invisible cost.
During the prime of my drinking career, 1977 to 1990, the average annual return for the S&P 500 was a little over 13 percent. If I invested $300 a month in an S&P 500 index fund rather than booze, I would have had $144,884 in my investment portfolio by the time I reached 30.
Whew!—that’s a lot of money. But it’s not exactly iceberg-like in its visibility ratio. My drinking viceberg had a 1 to 1.65 visibility ratio. For every one dollar in costs that were visible, there were an additional 1.65 dollars in costs that were hiding beneath the surface.
But what would my drinking viceberg’s visibility ratio look like if we allowed my hypothetical investment portfolio to grow naturally from age 30 to age 55, the age I retired along with Mrs. Groovy? We won’t add a dime to this investment portfolio. We’ll just let Mr. Market do all the work.
From 1991 to 2016, the average annual return for the S&P 500 was just shy of ten percent (9.8). My hypothetical portfolio of $144,884 in 1990 would have thus grown to $1,649,902 by the time 2016 ended.
Now we’re looking at a serious visibility ratio. The true opportunity cost of my drinking viceberg was $1,649,902. Of that opportunity cost, $54,600 was visible and $1,595,302 was invisible. That means my drinking viceberg had a visibility ration of 1 to 29.
Wow! That’s quite a visibility ratio. My drinking viceberg defied the known laws of physics. It blows the standard iceberg visibility ratio away. In the words of Donald “Boone” Schoenstein, “A new low. I’m so ashamed.”
Final Thoughts
Thank you, rock-n-roll. Thank you New York State for lowering the drinking age to 18 just before I left for college and for allowing bars to stay open till 4 a.m. And thank you most of all to Hollywood for such cinematic gems as American Graffiti, Meatballs, Slap Shot, Airplane, Caddy Shack, Stripes, Porky’s, and Animal House. Without your help, it never would have dawned on me that being a drunk, broke loser in my youth was something to strive for.
Ah, the power of culture.
Okay, groovy freedomist, that’s all I got. What say you? Does my theory that vices are like icebergs in terms of cost visibility ring true? I think that’s some pretty darn good critical thinking, right there. But you may think otherwise. You may find my theory of vicebergs to be rather pedestrian. Well, let me know what you think anyway when you get a chance. Peace.
Once again, you have absolutely blown me away with a concept that is easily intelligible to the greatest financial moron among us.
I’m realizing the reason nerds come out ahead as adults has little to do with cosmic justice or academic performance, but rather has more to do with savings on alcohol.
I think your big year deep writing experiment is clearly working, and I am enjoying the results.
Fondly,
CD
Crispy Doc recently posted…Frugal Weirdos In Love
I smoked for a long time. I’d like to do the same calculations on that.
Smoking is a killer viceberg today. I think the cost of a pack in NYC is now around $13. At that cost, a one-pack-a-day habit will cost $4,745 annually. Ouch! I was very fortunate growing up. None of my close friends smoked. I’m sure if they did, I would have smoked too. Glad you conquered that viceberg, Katie. And if you ever do the calculations on the true cost of that viceberg, let us know. Cheers.
SPOT. ON.
Now my drinking days were from 2009-2017, and yeah, being a native NYer – those years were THE MOST expensive years of my life. Accounts for which that humongous hidden ‘berg is still being bumped into to this day.
And that power of culture? correctomundo. It’s not my fault – it’s my naïveté.
Hey, Joojoo. Congratulations on ending your drinking career five years sooner than I did. Yes, you created a fairly large viceberg from 2009 to 2017. But if you kept the drinking going to 2022, the viceberg would have been substantially larger. To paraphrase an old financial saw, “The best time to stop a vice was ten years ago. The second best time is now.” Thanks for stopping by, my friend.
Great one, Mr G!
Sheesh, I’d hate to go back and calculate the cost of my booziness back in the day. I think anyone who is spending an inordinate amount of money on booze, fashion, hookers, etc. should read this post!
By the way, Bill Murray seems to have had a bad influence on you.
It should read, “fashion, hookers,…”
Sorry we missed your comment. How the heck are you and the Mrs?
Mrs Groovy recently posted…NAAFM: The National Association for the Advancement of Financial Morons
We are doing well and loving the FIRE life!!! Hello to Mr. G. We will get to your part of the country one of these days!
Looking forward to it, my friend. Just let us know when you’re in town. You and Mrs. G are always welcome at Groovy Ranch.
Got it. Made the correction.
“That’s a fact, Jack!”
And I forgot to include Meatballs and Ghostbusters.
I think the term “viceberg” means that it has to work because it’s just too great a word not to.
I definitely spent a lot of my 20s drinking, but I went to a dive bar where drinks were $6 and so strong that I only needed 2 for the entire night (I’m a bit of a lightweight, but mainly… man, those drinks were strong!). So I suppose I avoided a lot of the missed opportunities. But I was also broke a for my 20s, so spending much of anything on alcohol was probably a bad financial choice. Ah well, too soon old, too late wise.
Yeah, I’m really surprised some financial guru has made “viceberg” a part of our financial lexicon. Glad to hear you’re a lightweight in the drinking realm. I don’t have scientific evidence to support this, but it seems to me that lightweights are always more financially polished and astute than big drinkers. If I had to do it all over again, I would have definitely been a lightweight when it came to drinking. It would have been much better for my liver and my finances.
Ouch. That is a freaking painful amount of money. And then there’s all the health related negatives to vices too. I don’t consume near that amount of alcohol, but it makes me wonder what kind money I have poured down the drain with less than ideal habits. Thankful I’ve never been a smoker either 😉
Angela @ Tread Lightly Retire Early recently posted…Women’s Personal Finance Wednesdays: Week 21 Roundup
Yeah, drinking and smoking are big wealth killers. Thankfully I never smoked. If I had, I seriously doubt I would be financially independent now. It was hard enough digging out of the hole that drinking put me in. I suppose every man needs a vice. But no man I know needs two or more vices. Thanks for stopping by, Angela. And don’t forget to check out my post on Wednesday. It’s a massive 8,000-word manifesto and you’re kindly mentioned in it.
Yeah, but when you were that young you didn’t HAVE the money to invest in the market…right? Right?
Now I shall share this with our VT Choose FI group. Thanks!
So true, my friend. I once had that limiting belief in my young, stupid head. I really was a financial moron. If I was just half a lush and invested half my drinking money, I’d easily be $500,000 richer today. Sigh.
For what it’s worth I think it all worked out in the end 😀 But to continue the thought experiment you could guess if that time boozing cost you any career advancement and see if you could further work that into the equation.
Tag recently posted…The Crop-Lien System: The Good, the Bad, and the Ugly.
Excellent point. My excessive drinking most certainly did impede my career advance. I know for a fact that some of my supervisors didn’t take me seriously because I was such a big partier. I know this because they told me so years after I changed my besotten identity. Hmmmm. Quantifying to what extent my excessive drinking held back my career is a worthwhile exercise. Let me think about that. It might be fodder for another viceberg post. Great comment, my friend. Thanks for stopping by. Cheers.
Man you have a way with words Groovester. Your experience with excessive drinking is pretty much the same as mine, although I extended mine well into my early 30s. I have a post about this on Friday. I just wish I was smart enough to come up with the word “vicebergs”
Thank you, sir. I’m reading your Friday post tonight. I’m sure it’s going to be a doozy. Or should I say, “boozy”?
Interesting concept. If I apply it to my less-than-healthy dietary choices and factor in what it’s cost me in medical expenses, I’ll bet you’re right on the money.
Gary @ Super Saving Tips recently posted…Money F.I.R.S.T. – Financially Intense & Responsible Strategy & Tactics
Agreed. Fastfood was a big vice for me. One of my particularly embarrassing vices was Jack-In-The-Box monster tacos. I used to down several every week–even though I had no idea what meat they contained. Yep, nothing quite like the taste of mystery meat fried in turgid oil. Thanks for stopping by, my friend. Cheers.
Wow. I love the novel concept of Viceburg. That is amazing when you sit down and calculate financial opportunity cost over all that time. Certainly puts the latte factor to shame.
Another vice thankfully I don’t have is cigarette smoking. I can’t believe how much a pack costs and how quickly a big time smoker can go through. That plus the health impact is a double whammy
Xrayvsn recently posted…The Seven Deadly Sins FIRE Edition: Luxuria
Excellent point, Xrayvsn. I did a lot of stupid things in my youth, but I never smoked. Part of that has to do with the fact that I find cigarettes genuinely repulsive. But a bigger part has to do with my friends. None of my friends smoked. If they had, I probably would have had another viceberg to grapple with. Thanks for stopping by, my friend. Cheers.
Ahhh, we all have our vicebergs. And the funny thing about them is that you can crash into them again and again and still never see them coming. 😉
My problem has always been food and shopping. It’s so hard when you use things to comfort yourself, or when they become a regular part of your life.
“Ahhh, we all have our vicebergs. And the funny thing about them is that you can crash into them again and again and still never see them coming.”
There’s a lot of wisdom in those two sentences. Does Mr. PP know how brilliant you are?
Good word.
I too had a viceberg or booze. And a lot of other stupid crap.
Luckily the booze helped snag me a wife, which… might be the best investment of all!
Happy V-Day Guys!!
That’s awesome, my friend. I love stories in which something tawdry or foul actually leads to something good. For instance, I wasn’t a reader in high school. In fact, I was under the impression that reading was only something you did if your teacher told you to. But in my freshman year of college, one of my floormates was a collector of Playboy magazines. He had every copy of Playboy from 1960 to the present (1979). Anyway, I actually became intrigued by an interview with Milton Friedman in one of the issues. In this interview, Friedman’s latest book “Free to Choose” was mentioned. I went to my college’s library the next day and took it out. I was a reader from that point on. I thus owe my intellectual renaissance to Hugh Hefner. Great comment, my friend. Would you care to elaborate in a post someday how booze brought you and the lovely Mrs. WoW together?
Ironically a glimpse was in today’s post… “There was even a point in time when I was cooking for a large group of people, like 15-20 every Wednesday night. I did it for 6 months straight and never cooked the same thing twice.
The admission price was a bottle of wine. It’s actually where I met the Mrs. the first time, or so she claims, I don’t remember it 15 bottles of wine tends to do that to people.”
BTW – Playboy is definitely a go-to for Economics… HA!!!
And I have to imagine you owe more than your intellectual renaissance to Hefner RIP.
Haha! Indeed I do. If it weren’t for stealing Femlin’s ribald jokes, I wouldn’t have been near as sought after on the party circuit as I was. Yes, it’s amazing how polished one can get by actually reading Playboy.
Perhaps another thought to add to the Viceberg theory is the negative externalities associated with health. I’m not a paragon of health, by any means, but a lot of things we do or don’t do have negative impacts with our health, which ultimately costs us money later in life.
Definitely. I like the idea of vicebergs and I have plenty of vicebergs to analyze. I’m thinking every few months or so I’ll feature one of the vicebergs from youth. Health will surely be a big one. You’re the best, Kevin. Thanks for stopping by.
Vicebergs sinking the FI-tanic. I bow down to both you and Fritz. I cannot “top” either of you 🙂
Susan @ FI Ideas recently posted…Maybe It’s Time to Stop Your WINE-ing
You’re too kind, Susan. Viceberg was okay. Fitantic was brilliant.
So, can we conclude that we should, “Beware The Viceburgs, they’re capable of sinking the FItantic?
I was driving to our walking path and all of a sudden I heard an uproarious cackle come from the passenger seat. Mrs. Groovy had read your comment! Damn, the sinking of the Fitantic is brilliant. I love the way your mind works, my friend. I don’t know exactly how, but the Fitantic needs to be pursued. Definitely a post, but quite possibly a t-shirt. You got me thinking, Fritz. Hope all is well at the World Headquarters. Talk to you soon. Cheers.
Me Likes. 😉
Wow, that’s a lot of money. However, I don’t think we should compound it that way. If you didn’t spend it on alcohol, you’d spent it on something else. I spent money on drinks, dates, and electronics when I was in my 20s as well. We all did, right?
Agreed. I just wish I had known the true ramifications of my actions back then. I no doubt still would have done foolish things. But there’s a part of me that thinks I would have been half a drunkard rather than a full drunkard. Oh, well. I think you put into perspective rather well. The 20-something brain isn’t a great forward-looking tool–especially when it’s in a male body. Great comment, my friend.
I love your twisted word creations 🙂 This one is totally legit. I hope all twenty-somethings see this and will learn the lesson. But honestly, I highly doubt they will. After all, the mistakes we make help us become the persons who we are today. If only I had my current knowledge 15 years ago… Not a thought experiment I really like to do often 😀 But sure thing, a healthy amount of sanity and frugality won’t hurt–independently of one’s age.
[HCF] recently posted…Financial Freedom Book Review
What would the FI community be without twisted word creations? But to tell the truth, I really didn’t think “viceberg” was all that clever. I mean, am I really the first one ever to associate the true costs of a vice to an iceberg? I googled viceberg and I could only find only one other use of it. A blogger who blogged about the Catholic religion and church used the word in a series of posts back in 2005. So I guess I didn’t coin the term. I’m just reviving its usage. Thanks for stopping by, my friend. Always a pleasure hearing from you.
I want my 20s back due to several vicebergs to mostly get that time back but also the money spent on alcohol and nasty restaurant food—oh the joys of bachelordom.
One of the now-retired people I supervised told me “Opportunity is wasted on the youth.”
I chuckled at the time but I know what he means now.
Josh recently posted…Generation: Freedom–A Business Documentary for Teens and Adults
Oh, man, thank you Josh for reminding me about restaurant food. When I was in my 20s and 30s, most of my meals were surely restaurant food. Here’s the typical day. Breakfast: bagel and Snapple from The Bagel Boss. Lunch: either pizza at Mario’s or burgers at All-American Burgers. Dinner: take-out from a diner or microwaved burritos at home. I easily spent $15 to $20 a day on restaurant food. The cost of that viceberg is staggering–even more staggering than alcohol. Thanks for stopping by, my friend.
You forgot White Castle you vicebag.
Brian recently posted…The Unexpected Cost of Things
Vicebag!
LOL! Best comment of the year by far. Yes, I feel total shame for failing to mention White Castle. My favorite White Castle of all time was the one on Hempstead Turnpike in Levittown. Not only was the food dependably greasy and shady, but so also was the clientele. In the mid-80s, I was there one night at about 2 in the morning. The counter area was jammed with people. And, then, out of nowhere, as if an angel was looking over me, a brawl erupted in the parking lot and everyone fled the counter area to watch. I stepped up to the counter, ordered my ten belly bombs, and happily supped in peace as the crowd cheered on the combatants. I wept when they closed down that White Castle. On a brighter note, though, Mrs. Groovy and I used to dine at White Castle in Valley Stream for Valentine’s Day. It’s the one right next to the LIRR, and it attracts a lot of strange looking critters. Ah, memories. You’re a brilliant man, Brian. Thanks for stopping by.
LOL. Glad to contribute in a small way. Just to let you know, all of the White Castle Valentine’s reservations were booked solid this year. I was checking for a friend.
Brian recently posted…The Unexpected Cost of Things
Haha! I love it. We heard on one of the radio stations down here that White Castle was taking reservations at a number of locations. It’s about time. It’s so campy it’s fun. Who knew that Mrs. Groovy and I were such trend-setters.