Coffee Talk – BYOC

Grab a nice hot mug because we’re about to talk about coffee.

What do you mean, this is a blog about finance and stuff… (please hold).

One of my favourite things in the world is waking up to the smell of a fresh pot of coffee wafting through the air, hot and ready to drink. It didn’t used to be though. 7 :45 AM pulling into the parking lot and ordering a Tim’s coffee, truly Canadian, medium, two milk. $1.75. I gladly would hand over the loose change, or sometimes the twenty dollar bill in exchange for that comfort and went on my way. I loved, loved, loved coming to my desk with a fresh hot coffee to sip as I started to skim through all the e-mails that came in post 4 PM clock out.

Sip.

Scroll.

Sip.

Scroll.

You get the point. I’m sure you’ve heard it a lot, about the difference bringing in your own coffee can make on your wallet. And unfortunately, I am not here to tell you otherwise.

Bring Your Own Coffee (BYOC). Is something that is going to make a difference. I read an article recently of some millionaire stating that the money you save from your daily latte or coffee isn’t going to make you rich. I don’t really believe a word he says.

Will it make you a millionaire ? No, probably not. Will it get you that much closer to your financial freedom and retirement ?

Yes, it can if you let it.

I’m not one to tell you how to spend your money (well that’s kind of not true, I am stating a bunch of different things you SHOULD do with your money but anyway). I want to put in perspective of crunching the numbers because millennials, that is what makes me tick and makes you react.

Let’s take a look.

My daily coffee indulgence at Tim Horton’s cost me a total of $1.75 a morning.

$1.75 x 5 = $8.75

$8.75 x 52 = $455

Give or take a little for holidays, we’re sticking with $455 because that’s the calculation for the year.

If you’re not a little stunned by that, this next one might get you.

One of my favourite things on the internet is the compound calculator. There are a few online if you Google. You can pick any link and they will all do the same thing. Play around with it, it will give you a general idea of what your money can do for you. I generally use Money Chimp because it’s the first return result on Google.

Here’s the question I had the other morning at 5 :30 AM revolving around coffee.

What would be the outcome of my daily coffee cash if I invested it instead of indulged?

Pulls out phone to money chimp site.

If we put the current principal as $0 for the sake of this example.

Annual addition : $455 – coffee

Years to Grow : 40 – because lets be real retirement is a ways away for a lot of us.

Interest Rate : 7% – Just a guess.

Compounds 1x annually at the start of the year.

Calculate.

Future Value : $97, 192.35

Compound interest is one of the most beautiful things in this world. If you use it right, it will repay you. Crazy, a mere $1.75 a day can go a heck of a lot further than your morning pick me up.

That being said, you don’t have to invest that $455 into a future that is decades from now (although smart) it’s important you move that money where you see the value. Maybe it is investing and leaving it for 40 years, maybe it’s putting it towards a plane ticket to get out of a cold winter and to a nice beach, or buying yourself a new car OR paying off that student debt, mortgage, credit card…

No matter what it is, coffee, teas, lunches with coworkers – check out your weekly spending on those types of things and re-evaluate a little. If you can’t give up all of your Tim’s coffee’s in a week, can you cut it to 3 ? 2 ? Maybe in time, you’ll be making it yourself and having a thankful wallet for it.

Just my coffee thoughts.

KB.