From the Guardian:
Cruise and Hanks: from golden boys to wasted
talents
The two Toms are the last 80s
superstars still able to open a movie on their name alone. But movies such as
Inferno and Jack Reacher confirm their descent into dependability
Statistically speaking, there must be some people
who are desperate to see Inferno, the third Ron Howard film to star Tom Hanks
as a “symbology” professor who saves the world by misinterpreting paintings. By
the same token, some people must be counting the days until they can watch Tom
Cruise breaking strangers’ limbs again in Jack Reacher: Never Go Back –
an eyebrow-raising subtitle for any sequel. But are these airport-paperback
adaptations, both released in October, really the most productive use of their
stars’ time? Given that Hanks is now 60 and Cruise is 54 – and that they
wouldn’t need any more money if they lived to 1,000 – shouldn’t they be doing
something more worthwhile than prolonging a couple of second-rate action
franchises?
What can we do with this?
The part that caught my eye is the “wouldn’t need any more money if they
lived to 1,000”.
I suggest we model/explore this in increasingly
sophisticated ways. (You might want to
focus on just one of the Toms rather than both.)
Version 1:
Assume that the cost of living stays the same as it is now
and work out how much people need to live over 1,000 years. Work this out for a ‘subsistence level’ and
for a ‘luxury level’ of living.
Version 2:
Factor inflation into this.
Assume different values of inflation.
Version 3:
Look up the worth of Cruise/Hanks and consider the effect
that different values of interest rates on their bank account and inflation
will have.
Version 4:
How much money do you need to have in 2016 to ensure not
only that you never need to work again but that your great-grandchildren don’t
need to work? What about your
great-great-grandchildren (g^2-grandchildren)?
What about … g^n-grandchildren?
Information that might be useful (although you may want
students to search for this themselves – and the values will change over time):
The exchange rate is currently £1 = $1.21
Inflation is currently at 1% in the UK.
The average salary in the UK is £26,500
Possible answers
Version 1:
Cruise is worth about £400 million and Hanks £290 million
(we need to round off after dividing by 1.21).
At the average UK salary of £26,500 this gives 15,000 years for Cruise
(TC) and 11,000 for Hanks (TH).
If you want the money to last for 1000 years (from now – I won’t
quibble over the current age of the actors) then that gives £400,000 (TC) and
£290,000 (TH).
If you want £100,000 per year then 4000 years (TC) and 2900
(TH).
Version 2:
If we factor inflation into this we find that the
compounding factor makes things worthless before 1000 years is up. If we start with £26,500 and increase it by
1% each year then after 1000 years the total will be £56 billion. I used a spreadsheet to keep track of
this. After 473 years TH would run out
of money and TC would last for 505 years.
Version 3:
Clearly, if they can get exactly the rate of inflation in
investments then the first scenario will hold true. If they can get a return that is better than
inflation then things will be fine.
Version 4:
If we assume that everyone has two children at the age of 25
and lives to be 75 years old, then ensuring everyone had £100,000 per year
would mean the generations up to and including the great-great-grandchildren
(of which there are 16) would need a total of £310 million.
A spreadsheet is a good plan for this …
