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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.
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