Amazon Prime or Amazon Stock? Here’s What That $139 Annual Fee Could Be Worth if You Invested It Over 10 Years
Written by
Nicholas Morine
Edited by
Zuri Anderson
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Amazon has been making headlines for a variety of reasons as of late, having recently expanded its annual Prime Day sale from two days to four, and even more recently giving early holiday shoppers a second swing at a bargain with Prime Big Deal Days, spanning Oct. 7 and Oct. 8.
But the perks of having exclusive access to those deals does come at a price — precisely $139 per year. And while Amazon Prime members do enjoy a variety of other benefits, including Prime Video, most notably, consumers can always opt to park their dollars elsewhere: Perhaps by investing in Amazon itself.
So, how much wealthier would one be if they started buying $139 in Amazon stock each year, starting in 2025? Let’s find out.
Investing in Amazon Stock Versus Paying for Amazon Prime
To keep things straight-forward, first we’ll establish a baseline price for Amazon stock as of Jan. 2’s market close — at $220.22, that’s only less than Oct. 7’s closing price of $221.78. It looks like you’ll be opting to buy fractional shares.
In the end, no matter what the stock price rests at, the more important figure here is Amazon’s established compound annual growth rate (CAGR).
According to FinanceCharts, Amazon’s CAGR over the course of the past decade rests at a rather impressive 23.55%. That far outpaces the broader S&P 500’s 10-year CAGR of 11.6% (sans dividends), or 13.6% CAGR, including dividends.
Fidelity’s growth calculator, although unable to calculate 23.55% growth precisely — requiring a rounding up to 23.6% — predicted the following figures if one were to invest $139 per year in Amazon.
The total projected value of your investment would stand at $5,330, representing $1,390 invested, $1,804 in simple earnings, and $2,135 in compound earnings.
On the other hand, Amazon itself claims that Prime members saved over $500, on average, on shipping costs in 2024 while availing of free shipping attached to the membership. That’s an easy enough calculation: At $5,000 in assumed value, plus the benefits of an including streaming service comparable with Netflix (standard ad-supported accounts being charged $7.99 per month, or a little under $100 per year) valued at ~$1,000, and the Prime membership could be worth more than a stock pick.
There are a few caveats to consider, however: If streaming doesn’t matter to you, or if you’re going to order enough product from Amazon in each session to qualify for free shipping even without a Prime membership, the point is somewhat moot.
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