We’re going to tell you a secret: with what you spend when you go for a drink you could invest in the stock market and secure a golden retirement . Do not you believe us? You do good. With the hoaxes that run on the Internet, your disbelief is more than justified. Luckily, we can prove it to you. Spending on drinks is stealing a brutal opportunity.
A very common mistake among is not to give importance to small expenses . What if a coffee here, if a few rods over there, that if a whim because I deserve it … These small and insignificant expenses add up to a gigantic expense at the end of the year .
The difference between saving (and investing) this money or spending it can mean (and assumes) the difference between a dream
How will you get rich if you stop spending on drinks
In our case we will start with a weekly expense in glasses of 60 dollars , which is not nonsense.
Since there are 52 weeks in the year, the equivalent annual investment would be 3,120 dollars. The time horizon we will consider will be 40 years, for example, from 25 to 65 years.
If we save the cups for 40 years we will accumulate a capital of 124,800 dollars . Even without investing it, it is an important saving. We can affirm without fear of making mistakes that few people manage to reach their retirement with this amount of money saved.
But as you’re about to check, .
If instead of saving that money in a checking or savings account , invest it in the stock market, assuming a return of only 3%, when you turn 65 you accumulate 242,309.5 dollars . Almost double!
Surely with that money you could enjoy a quite placid retirement , right? And that we have considered a very conservative annual rate of return. Let’s see what happens if we are more aggressive.
If we made the numbers aspiring to a return of 5%, much more in line with the reality of the market, the 60 dollars per week of spending on glasses would become a capital of 395,740.18 dollars when we retire .
And if we are more optimistic and we make calculations with an annual interest of 8%, our portfolio of shares would have a value of 872,916.72 dollars .
Come on, if you stop spending on glasses and get a return of 8% you will reach your retirement with a capital of almost one million dollars .
It is to think twice before leaving rods , right?
The unquestionable advantages of investing instead of spending on glasses
Let’s summarize the different cases that we have analyzed:
|Annual savings||Annual profitability||Capital after 40 years|
|3,120 dollars||0% (we do not invest)||124,800 dollars|
|3,120 dollars||3%||242,309.5 dollars|
|3,120 dollars||5%||395,740.18 dollars|
|3,120 dollars||8%||872,916.72 dollars|
It is fair to point out that for these calculations we have not taken into account the effect of inflation , which as you know is responsible for the money is less with the passage of time.