All The Small Things

in investing •  2 months ago

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I've been looking at ways to have more money available for investing and one thing that stood out for me is the friction of day-to-day living. This is the cab to work or daily pick-me-up coffee that we buy. Over the course of a year, boy do these things add up!

Lunch

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We all need to eat, don't we? I usually grab what call here, 'mixed rice' or 'economical rice' for lunch. Consisting of rice, 2 vegetable dishes and a meat dish, it usually costs between $3.10 and $3.50. Pretty affordable.

But if i were to pack a sandwich from home for lunch, that would cost me $0.50 instead, saving about $2.50 per day. Over the course of 252 working days, that's $756 saved a year that can go towards investments.

Daily coffee fix

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Coffee here isn't cheap. Even the one at the local coffee shop sets you back around $1.50 for a cup of iced coffee. Hot coffee is cheaper but the weather here is so damned hot i don't know how people can drink hot coffee if it isn't raining.

Again, $1.50 doesn't sound like much, but if you were to grab one a day, over the 252 working days, that adds up to $378.

Compounding

So just by scaling back on lunch and cutting out the coffee, that saves over a thousand dollars per year. Pretty neat in and of itself but i think where the magic really happens is if we invest this money.

If we were to invest this $1,000 every year for 25 years in a large cap ETF. Assuming a 6% average rate of return, at the end of 25 years, we would have $60,000. In 30 years, it snowballs to $85,000. Nothing spectacular but it's a pretty safe investment.

I was also thinking of using a portion, say $100 for more aggressive investments. Let's say you have an investment that gives 3% daily. Are there any out there? I was thinking of bets on heavy favorites in sports matches. Some luck and good money management is needed but if you were able to compound and get an averaged out 3% daily return on $100, at the end of a year, you would have $4.8 million.

I've clearly oversimplified things (book limits, loss during a streak etc.) but this is just a thought. Either way, the money saved presents you with options and it never hurts to have a bunch of good ones.

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Reminds me of a recent tweet storm by Naval Ravikant titled "How to Get Rich (without getting lucky)". Someone reposted it as a PDF here. Two important aspects you touch on are passive income and compound interest.

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Thanks for the links! Some really good quotes and things to think about in there.

It so difficult to be disciplined and avoid unecessary expenses. The toughts of making myself a swandwich and/or my own coffee every morning already makes me tired :-)
I guess lazyness could also be applied.

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Hahaha or you could skip lunch and coffee. I've heard there are good health benefits to intermittent fasting :)

The best to get rich(er) is to spend less than what comes in. And yes, small things add up!
Just the same here on steem. Every little bit of dust that we receive and power up, makes the account stronger, which will bring in more curation rewards.
When your vote gets more value, more people will become interested in you and so on.

Maybe you should follow @getonthetrain both of you share some financial ideas! Not only a great guy, but also has a lot of tips, to save money in the daily live!

Cheers,
Peter

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Well said, Peter. It's not how much we earn (although earning more definitely helps!) but how much we spend. Yeah those cents on the comments can add up to quite a bit when you're not looking :)

Thanks for the good recommendation. Just followed @getonthetrain.

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Your welcome! It is what we all should do, connecting people!

Life is a balance. It's great to be prudent but if you don't treat yourself once in a while then you will go crazy and become a horrible penny pincher...Go on, have yourself a donut dude!

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Haha good point... you don't want to end up a miser like Henrietta Green.

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For sure... treat yourself once a week!

I saved about 50 dollars this week not eating out. I can definitely see it adding up. Thats also a conservative estimate.

Your post had been curated by the @buildawhale team and mentioned here:

https://steemit.com/curation/@buildawhale/buildawhale-curation-digest-06-11-18

Keep up the good work and original content, everyone appreciates it!