Paying for college

rocketman08
Sun, 20 Jul 2008 12:21:28 +0000

GroovyGeek, that’s all very good advice.

I also suggest that people spend a few minutes playing around with savings calculators on the various websites out there.

For example, find something in your life right now where you could save $3 a day… say for example bringing your own coffee into the office in a thermal mug vs stopping by the Starbucks next to the office. If you manage to do something like that and save $3 a day then you’ll have saved $90 by the end of the month. So let’s say you continue your $3 a day saving activity from the time you’re 30 till you’re 60. Each month you put the money saved from brewing your own coffee into a Roth-IRA invested in a diverse market portfolio. At the end of that period you will have (assuming average historical returns)… wait for it… $139,300.

So simply for brewing your own coffee each morning, you can essentially write yourself a six figured cheque towards retirement. Also remember that this simple calculation doesn’t consider the inflationary increases in the cost of coffee so the actual amount you save would be even more. Now $139,300 isn’t enough on its own to fully retire on, but it’s a good start towards a nice nest-egg.

I often hear people say “Oh, I can’t afford to save for retirement now” often said while holding a $5 Starbucks in their hand… I just smile.