You may say, ‘Well, that’s a really small expenditure, this book that you are talking about. It doesn’t make a big difference.’ I guess looking just at the one instance, you are kind of correct. But, extend this thought process to all your purchasing decisions over your entire life. I guarantee you, it makes a big difference. A $25 book, not bought, and instead invested for 35 years @ 7% = $267. Still not impressed? I guess you are right, $267 isn’t all that big of a deal, when you are talking about retirement money. BUT, (#1) – make one $25 ‘not buying’ decision like this every week during those 35 years. Now you have $180,000. Now some of you are starting to get it, and you are thinking: ‘$25/week, that’s not a problem. I could also:
- (#2) – Cut my own hair ($2.30/week) – (Assuming a $20 cut every 2 months. It’s not hard, my 9 year old daughter cuts mine!)
- (#3) – Get rid of my expensive wireless plan ($13.85/week) – (Assuming reducing your bill $60/month)
- (#4) – Cut cable TV ($13.85/week) – (Assuming eliminating your $60/month bill)
- (#5) – Quit eating out so much ($20/week).’ (Note: I have even made my own sushi!)
Now, you have $539,000 in 35 years. Some of you have momentum now, and you are thinking ‘I’m not done yet, what if I:’
- (#6) – Save on utilities: Installed LED bulbs (free from my power company), insulated my attic and installed low flow showerheads and faucets ($23/week). (I know, there are some costs here, but they are quickly paid for, and I am trying to keep the math simple)
- (#7) – Biked to work, and sold the car ($70/week) – (Don’t forget there is: cost to purchase, insurance, registration, maintenance/repairs, and gasoline! This $300/month would probably be low for you, you would probably save more!)
Now, after 7 simple changes, you have $1,208,000 in 35 years. You are investing $728/month. This is a lot of money, but it’s exactly the amount you saved following the 7 steps above. I am sure many of you are assuming that making some of these 7 changes would go against the whole point of the previous post, and make your life worse. Nope. I have been doing these things for 3 years now (better late than never). My life is not worse, my day to day life is actually better (For example: my wife get’s to eat sushi, this makes her happy!) and I have ~$28,000 invested I would not have.
Let me repeat this: My life is not only better, I have $28,000 saved too! 3 years.
How much is your junk worth? Drop one $25 purchase every week, and 35 years later you have $180,000.
Make some small changes, the future you will thank the present you!