$200k for a coffee and sandwich?

I'm reading "Playing with FIRE" by Scott Rieckens. He realised he could save a 6-figure amount just by not having a sandwich and coffee on his way to work each day.

Traditionally Scott would buy an coffee and a sandwich on his way to work. It was "only" eight dollars so it seemed like an easy purchase.

Even with free coffee at work, eight dollars seemed a small price to pay with a sandwich included.

Doing the Math

Then Scott crunched the numbers. Eight dollars each workday came to $160 a month. $1,920 per year.

Continuing this habit for 30 years of work would cost him $57,600.

If he invested that $160/month instead, he would accumulate $133,161 (invested at 5%).

Translating that into Australian dollars it's $194,765.27 (to be precise).

How the little things add up

It is amazing how even little things add up if we do them a lot. $8 doesn't sound much - until he realises he's buying 7,200 coffees and 7,200 sandwiches.

Are we getting value?

This is not to say don't ever buy anything. It's about working out whether we're really getting value from our purchases.

Repeat purchases are particularly in question - for two reasons. Because we do them often, the cost really adds up (like the coffees). We also know that the longer we have something the less we enjoy it.

So how much does stuff really cost?

Good question. I developed my own little calculator for this (grab a copy).

I tried an example of a $14 lunch each workday. It came out to cost nearly quarter of a million dollars.

Download your own copy and you can try it out for different expenses, whether they occur each workday, every day, week, month or year.

I'm not picking on coffee drinkers. It might be buying clothes you don't wear, having a gym membership you never use, or cable TV that you don't need.

By finding out the true cost you can decide whether it's providing good value, or whether you'd be better off with the cash.

Comments

Don't dump on charities

Netflix causes mass dumping. Here's an alternative. January is usually a big month for physical donations to charity. In 2019 it's been over-the-top (literally) as charity donation bins have been overflowing with items. The Netflix series "Tidying Up" by famous declutterer Marie Kondo (see her book ) has inspired many to declutter their homes. But in the process they've cluttered the streets. What's so bad about donating? When the bins overflow the extra items are thrown away. Having been in the weather, the rain and on the ground, they are classified as contaminated and cannot be sold. To make it worse, much of what fills the bins is not good enough to sell, and is also dumped. Bad donations hurt charities 13 million dollars. That's how much it costs charities to deal with all the junk we dump on them - 60,000 tonnes a year. Lifeline says half its stores have stopped accepting donations. We might think we're helping, but that's a lot ...

This could all be yours

This cartoon kind of happened to me on the weekend. Joking about death My dad has his own unique sense of humour. Flippantly he joked that when he passes away, the first thing I'll need to do is get a rubbish skip (maybe two) and jam it full with all the junk from the garage. I was reminded of Marie Kondo, who says in her book that we have to deal with items either now or later; so it might as well be now. For people who have retired, I guess there's a third option: Ignore it for a few more decades and let descendants deal with it. Don't get me wrong - my dad has plenty of years left yet. But from his joke I'm guessing he's reasonably happy to let it all sit there while he enjoys retired life. Why not deal with it? I can kind of understand. It's an overwhelming task (even to look at). There's also the "I might need that" factor. Which is fair enough, but even if an item is needed, is it findable in amongst everything else? About half the ...

Are cooktops a waste of space?

Who has ever had four saucepans cooking at once? So why do we have four hotplates on cooktops? Back in the day of all-in-one units, four hotplates were a nice fit on the top of the oven. These days the cooktop and ovens are usually separate but we've stuck with four hotplates. In many homes and apartments it's worth re-thinking. Is this is a wise use of bench space? Two-saucepan cooktops are making an appearance and freeing up some bench space in smaller kitchens. Aldi are taking it a step further with the Induction Cooking Plate . It's a stand-alone single-hotplate device that can be packed away when not in use. Aldi says it has 8 temperature settings, 5 preset cooking functions, a timer, touch controls and overheat protection. Could this be the future of smaller kitchens? Cost-savings in building. More bench space. Less energy consumption with the efficiency of induction cooking. Another great example of less is more. I don't mean this to be an ad, but...

But wait... there's less!

Search This Blog