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Video: What “Free” TV Really Costs

Written by Gary North on October 31, 2015

TV viewing time is not free. It is expensive.

I teach a course, “Introduction to Business,” for the Ron Paul Curriculum.

One of the most important aspects of this course is to teach teenagers the power of reinvested profits in a personally owned home business. To teach this, I use a financial calculator posted on the website of the U.S. government’s Securities and Exchange Commission. You can see it here.

In the RPC program, the fifth lesson in a week (Friday) is devoted to a review of the week’s lessons. The students do not read any new material on day 5. Instead, they write a short paper in the humanities and social science courses.

Here was the challenge in lesson 30: calculate the cost of watching TV at $20 per hour for 45 years. Assumptions: a student starts a business at age 15. It gets profitable by the time the student turns 21. So, at age 21, the student’s TV time reinvestment process begins. He retires at age 66 and sells the business. What extra value did his “no TV time” contribute to the net sale value of the business?

One student concluded that his TV viewing time would cost him $127,000. He said he thought this would be worth it.

He made an error in computation. I prepared this screencast for the other students on how much his TV viewing time would cost him. You may want to show this to your teenagers or to your grandkids. It might motivate a teenager to stop watching as much TV and instead start a little home business. The business might not remain small for 50 years.

Here is my screencast.

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