How coffee can destroy your financial freedom

Ok I know the tittle is a little harsh! but it does has some truth to it. I myself am a coffee addict, I love the taste of coffee and the first thing I do in the morning is make sure I get one.

Cold Brew is currently my favorite but many mornings the traditional hot coffee is required! Remember I work as an engineer so sleep is defiantly optional in the engineering field.

But before you run to the closest Starbucks and fork over that $5 to get your favorite drink Id like you to think about how much you truly are spending! Ill run through an example I used when I quit buying coffee from the local Starbucks and Tim Hortons and began brewing my “black gold” at home!

Lets take $5 a day on coffee or at the coffee shop. That’s really only one drink at Starbucks. So because i’m an engineer I needed to run the math on that (I was going everyday I might add). So $5 a day for 30 years ($54750)  $54,000 on coffee you say. (Begin making excuses that: “I don’t go everyday”, “I don’t spend $5 each time” etc…) You get the picture the point is that you are likely spending alot of money on coffee that you can either make at home or is provided at work!

So lets step back and really think about this $54,750 that’s not enough to retire on, you are right there is no way you could retire on $54,000, but how much would that money make in that amount of time.  Assume 10% ROR on investment and Lets check with the help of excel in 30 years slurping down that $5 drink everyday you could have lost out on about $340,000…

1 $1,800.00 $100.54 $1,800.00 $100.54 $1,900.54
2 $1,800.00 $299.55 $3,600.00 $400.10 $4,000.10
3 $1,800.00 $519.40 $5,400.00 $919.50 $6,319.50
4 $1,800.00 $762.28 $7,200.00 $1,681.78 $8,881.78
5 $1,800.00 $1,030.58 $9,000.00 $2,712.36 $11,712.36
6 $1,800.00 $1,326.98 $10,800.00 $4,039.34 $14,839.34
7 $1,800.00 $1,654.41 $12,600.00 $5,693.75 $18,293.75
8 $1,800.00 $2,016.14 $14,400.00 $7,709.89 $22,109.89
9 $1,800.00 $2,415.74 $16,200.00 $10,125.62 $26,325.62
10 $1,800.00 $2,857.18 $18,000.00 $12,982.80 $30,982.80
11 $1,800.00 $3,344.85 $19,800.00 $16,327.65 $36,127.65
12 $1,800.00 $3,883.58 $21,600.00 $20,211.23 $41,811.23
13 $1,800.00 $4,478.72 $23,400.00 $24,689.95 $48,089.95
14 $1,800.00 $5,136.19 $25,200.00 $29,826.14 $55,026.14
15 $1,800.00 $5,862.50 $27,000.00 $35,688.64 $62,688.64
16 $1,800.00 $6,664.86 $28,800.00 $42,353.50 $71,153.50
17 $1,800.00 $7,551.24 $30,600.00 $49,904.75 $80,504.75
18 $1,800.00 $8,530.44 $32,400.00 $58,435.19 $90,835.19
19 $1,800.00 $9,612.17 $34,200.00 $68,047.36 $102,247.36
20 $1,800.00 $10,807.18 $36,000.00 $78,854.54 $114,854.54
21 $1,800.00 $12,127.31 $37,800.00 $90,981.85 $128,781.85
22 $1,800.00 $13,585.68 $39,600.00 $104,567.53 $144,167.53
23 $1,800.00 $15,196.77 $41,400.00 $119,764.30 $161,164.30
24 $1,800.00 $16,976.55 $43,200.00 $136,740.85 $179,940.85
25 $1,800.00 $18,942.70 $45,000.00 $155,683.55 $200,683.55
26 $1,800.00 $21,114.73 $46,800.00 $176,798.28 $223,598.28
27 $1,800.00 $23,514.20 $48,600.00 $200,312.49 $248,912.49
28 $1,800.00 $26,164.93 $50,400.00 $226,477.42 $276,877.42
29 $1,800.00 $29,093.23 $52,200.00 $255,570.65 $307,770.65
30 $1,800.00 $32,328.15 $54,000.00 $287,898.80 $341,898.80

Again that’s still not enough to retire, but that isn’t the point. It is the small things, things we can easily do without that are sabotaging  our financial freedom so I recommend you do the same as me brew your cup of coffee at home! It costs a fraction of the cost of going out, you can get some great fresh coffee beans and its all part of the experience. Plus look at all the money you will save over the years! you could be well on your way to a nice retirement and financial freedom by just skipping the coffee shop everyday.

This article was quite entertaining to write but it is very truthful, don’t let the small things ruin it for you! Keep on track and in 20 years maybe we will be lying on a beach in Mexico sipping coronas in our early retirement.

 

Leave a Reply

Your email address will not be published. Required fields are marked *