The real cost of goods – compounding expenses

I like making the suggestion to people to assume the cost of a product as it’s ultimate life long compunded value. Being young, it’s therefore a greater expense to purchase an item because of then the lack of future earnings potential from that money spent. Let’s just say for example you purchase a $5 super speacial Starbucks cup of coffee when your 24 years old. If instead you withheld that expense and invested it into any good reasonable effort giving you a 4% annual return on that $5 you would then have $30 when your 70 years old. So therefore you can conclude that one cup of coffee actually cost you $30 over your life. Maybe minor, but add up the other expenses you really don’t need, compounded over 30 years. WOW.  Therefore being stingey with your money is much more critical when your young versus when your old. The potential of your wasted income will be a huge devestation when you are older. The best way to become truly wealthy is to make money work for you. Think about it, next time you make a stop at McDonalds for a $30 meal. (That will be $30 from your retirement, have a nice day!)

Hello world!

Thanks for stopping by my Blog. Here you can find the latest happenings, thoughts, and idea’s going on in my world.