At Quo Money we talk a lot about the power of consumption, looking at the things we buy frequently and considering their true cost.
It’s a discussion that delivers mixed opinion, some people see its merits, others see it simply patronising with one person described to me at a conference as being “an utterly boring existence” 🤪.
So what am I talking about when I say “the true cost”?
Take a cup of coffee from a high street chain like Caffe Nero, Costa or Starbucks.
The average cost for a regular latte is £2.50. You buy a coffee every day on your way to work, spending £900 a year give or take on coffees. Now take that money and instead of buying the coffee’s, take one with you and put it in a Stocks & Shares ISA, in say the MSCI World Index (not a recommendation, used purely as an illustration), which since 2006 has seen compounded returns of 4.89%.
Now take the difference between your age and your desired retirement age to understand the number of years you’ll be saving for. Say you are 30 and want to retire at 65, you’ve got 35 years to save.
Some rudimentary sums shows that (not accounting for inflation and the cost of buying coffee from a supermarket and taking it with you!) would be able to save £82,245 by the age of 65. Why not do some sums to see what you could save, it can work with lots of simple lifestyle changes and make a big impact.
- Not buying lunch, but taking it with you – £121,968
- Reducing from 2 to 1 takeaways a week – £146,025
- Shopping at Lidl or Aldi rather than Waitrose – £365,063
- Stopping smoking (assuming 10 a day) – £198,164
There’s nearly a million quid right there!
We’re about to create a super intelligent calculator that will work this out for you! Watch this space as we’ll be launching it as part of Quo Money very soon. We’d love to hear from you if you have any life changes that you feel are easy to change but can make a big difference.
DISCLAIMER: I am writing this post whilst in Caffe Nero…we all need a caffeine hit sometimes! 🤫