Brew Your Coffee Make a Million Dollars

In my early working years, not only was I buying lottery tickets, but I was also stopping for coffee daily on my way to work. Going to a Tim Horton’s in Canada seems like a right and responsibility. I spent about $150 a month on coffee and those chocolate glazed donuts, not to mention the extra on the odd lunch or coffee driving home.

But taking last week's advice, let’s say someone shared the Investment Calculator with me, and I decided to brew coffee at home and put the money I saved into an investment.

Let’s say it costs me $40 a month for coffee beans. I already had a coffee maker at home and a cheap bean grinder, so I didn’t have to buy those.

I am now 67 years old. I would have been putting in $110 a month for 42 years.

If I did that, let’s see what happens when we use the investment calculator.

I type in $100 as my starting amount. I enter 42 in the second box for the years I do it.

I continue with a return rate of 12%.

I add the $110 every month and do it at the beginning of the month.

If I followed that advice today, I would have 1.67 million dollars.

But let’s play for a minute. How much would I have in 30 years?

Changing the number from 42 to 30 years means I have just $352,185. In the final twelve years I would have made an additional 1.3 million dollars.

What if I just added another $25 a month to my contribution?

In 30 years, I would have $431,000 and in 42 years, 2.055 million dollars.

What this exercise makes simple is that the more time you have, the wealthier you will become.

Let’s say you have a child or grandchild who is two years old. You decide to set up a fund that starts with $100 and adds $100 a month until the child is 57. Using our calculator, we came to the value of 7.25 million dollars. Doesn’t that seem doable? 

If you look at the calculator printout, you will see that just $66,000 was money put in over the 57 years. The remaining 7.179 million dollars came from “Lazy Money”. Money you didn’t have to do any work to get. Next week, I’ll discuss Lazy Money and how you earn it while snuggling on the couch. Simple.

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