VANILLA LATTE's OR 1 MILLION DOLLARS
VANILLA LATTE's OR $1,000,000
In this post I wanted to see just how much money an individual could make if they invested all the money that they spent on Starbucks coffee. The result is pretty ridiculous.
There are a few factors that I assumed in this test;
1) The beverage being used is Skinny Vanilla Latte (Venti) because it is one of the most popular drinks at Starbucks. This drink costs $4.65.
2) It is assumed that this person will buy coffee every single day from Monday to Friday, every single week.
3) It is also assumed that for the investment they will invest it in an S&P 500 Index fund, which tracks the 500 largest U.S. companies.
4) The average return of the S&P 500 throughout history has been 9.8% yearly, and so that figure will be used as the yearly return of the investment.
6) The individual will contribute to the investment from the age of 18-65 years old. It is at this age that the majority of people drink coffee for both school and work. This means it will be conducted for over 47 years.
5) All calculations are made in US Dollars.
Now, let's calculate.
Cost of Coffee x Number of times per week x number of weeks in the year
$4.65 x 5 x 52
= $1209
The yearly contribution to the fund is $1209.
Now, using an online calculator the results are ridiculous!
By the time you retire the investment will be worth $1,100,000. That's pretty crazy to think.
All you need to do to become a millionaire is not drink Starbucks every day. INVEST it.
In the graph below you could witness the compounding effect of investing. Hardly any of the money was invested out of pocket, most were made through INTEREST. This is exactly how investors like Warren Buffet got so rich.
The growth of assets in this graph is exponential. If you kept investing your Starbucks money until the age of 75 (hopefully we all live that long) the amount would be $2,700,000.
Doing these calculations hopeful shows you that you do not need that much money to invest, and make a ton of money. In this example, you would only have to invest about $100 a month to end up with a million dollars at retirement.
Little investments and sacrifices like giving up your vanilla latte every day can make a huge difference. SO SMARTEN UP, SAVE, AND INVEST!
Thanks for reading this through. I hope you found this enjoying and informative! If you have any questions or want to contact me email me at icsoares02@gmail.com.
In this post I wanted to see just how much money an individual could make if they invested all the money that they spent on Starbucks coffee. The result is pretty ridiculous.
There are a few factors that I assumed in this test;
1) The beverage being used is Skinny Vanilla Latte (Venti) because it is one of the most popular drinks at Starbucks. This drink costs $4.65.
2) It is assumed that this person will buy coffee every single day from Monday to Friday, every single week.
3) It is also assumed that for the investment they will invest it in an S&P 500 Index fund, which tracks the 500 largest U.S. companies.
4) The average return of the S&P 500 throughout history has been 9.8% yearly, and so that figure will be used as the yearly return of the investment.
6) The individual will contribute to the investment from the age of 18-65 years old. It is at this age that the majority of people drink coffee for both school and work. This means it will be conducted for over 47 years.
5) All calculations are made in US Dollars.
Now, let's calculate.
Cost of Coffee x Number of times per week x number of weeks in the year
$4.65 x 5 x 52
= $1209
The yearly contribution to the fund is $1209.
Now, using an online calculator the results are ridiculous!
By the time you retire the investment will be worth $1,100,000. That's pretty crazy to think.
All you need to do to become a millionaire is not drink Starbucks every day. INVEST it.
In the graph below you could witness the compounding effect of investing. Hardly any of the money was invested out of pocket, most were made through INTEREST. This is exactly how investors like Warren Buffet got so rich.
The growth of assets in this graph is exponential. If you kept investing your Starbucks money until the age of 75 (hopefully we all live that long) the amount would be $2,700,000.
Doing these calculations hopeful shows you that you do not need that much money to invest, and make a ton of money. In this example, you would only have to invest about $100 a month to end up with a million dollars at retirement.
Little investments and sacrifices like giving up your vanilla latte every day can make a huge difference. SO SMARTEN UP, SAVE, AND INVEST!
Thanks for reading this through. I hope you found this enjoying and informative! If you have any questions or want to contact me email me at icsoares02@gmail.com.
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My daughter loves her Starbucks treat! I wonder what her move will be after reading this.
ReplyDeleteThanks for reading! It definitely shows how small things can really go a long way.
DeleteThis mentality will change lives. Small, good decisions over time add up to make a huge difference. Everything compounds. Great perspective shift.
ReplyDeleteThanks! Glad you enjoyed it.
Delete