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A Small Initial Investment

Posted by TestOut Staff on

Legend has it that, in 1626, Peter Minuit and a party of Dutch colonists acquired Manhattan Island, the site of present-day New York City's Manhattan borough, from the indigenous Canarsie, a constituent tribe of the Lenape, for trade goods worth 60 Dutch guilders. That's the equivalent, as most familiar with the legend have no doubt heard, of $24 in ... well, not "today's" currency. In 2014, historians estimated that Minuit's trade goods would be worth between $2,600 and $15,600.

Cruz Bay on Saint John Island

The $24 amount is the legend, however, and you know what they say about when the legend becomes fact. We're thinking about purchased islands today because exactly 103 years ago — roughly a month after the birth of still-living actor and Hollywood legend Kirk Douglas — the United States closed a deal with Denmark on Jan. 17, 1917, to purchase what today we call the U.S. Virgin Islands. The price tag was $25 million then. The 2020 equivalent: a cool $553.8 million.

The point is that small investments can accrue in value across time. What sounds like a decent-size chunk of change today — as $25 million surely must have in 1917 — can become worth a whole lot more down the road. When Mark Cuban bought the Dallas Mavericks from H. Ross Perot Jr. in 2000, he paid $285 million. As of Forbes magazine's 2019 NBA team valuation report, the Mavericks now generate $223 million in revenue per year and have a total value of $1.9 billion.

The numbers game that we played with both Manhattan and the Virgin Islands is simply converting the original purchase prices into modern currency. That's fun, but not necessarily illustrative of our point. The real focus should be on Cuban's Mavs, an investment that now generates an amount of revenue every 12 months that is nearly equal to the original purchase price. That's a rate of return that would make anyone proud.

When it comes to investing in your own future, think long term. It may sound like a lot of cashola to pony up $79/month for access to TestOut CE training. And we get that: Everyone has their own budget, and yours might need to stretch a little for that number to be realistic. In as few as two or three years, however, that investment in training could bump up your annual income substantially. It's not the only reason to get certified, but it is a pretty compelling one.


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